I always love reading blogs about other investors’ investment income. Watching other people’s investment income rise is my second favorite thing (the only thing better is watching MY investment income rise!)
Here is our investment income for May, 2020. This report includes income from dividends, interest, mutual funds, and rental properties.
Overview
May was a slightly disappointing month for our passive income, primarily due to some repairs and improvements on our rental properties.
However, the good news is that all of our properties were rented and all of the tenants paid their rents. This is a bit surprising, as one of our tenants said he might have a problem coming up with the rent, but ultimately he was able to pay the full amount.
Without further ado, here’s what our investment income looked like for the month:
Dividend & Interest Income
Total dividend income for the month was $2,562.15. This is up 5.1% from last May. For some reason we received significantly less interest income from our cash (about $150 less) – I’ll need to look into what’s going on here.
Although our dividends for the month are up slightly, our cumulative dividends for the year through the end of May are still up 16%.
We plan for our dividend income increasing by 10% per year, so we are ahead of schedule so far.
Overall, a good month for our dividend income.
Rental income
This category includes net income from the 6 rental properties that my wife and I own, plus 50% of the income from 4 rental properties that we own with my mom. This number does not include appreciation of the properties or the decrease in the mortgage balance (those numbers show up in the net worth report).
However, this income is net of all mortgage, tax, and insurance payments. That is, this is a true cash flow report for our rental properties.
February was a pretty poor month for our rental income. Total rental income for the month was just $587.54. This is down a whopping -84.37% from last May’s income of $4,125.48. We had about $400 in repairs on one of the properties (somebody ran into the brick wall and drove away), $600 in improvements on another (new windows – the old ones were drafty), and $987.37 in property taxes for another of the properties. However, despite all those expenses, we still managed to be cash-flow positive, which is impressive.
Our average rental income for the last 12 months is $2,005.18, which is the down about $263 from where it was last month.
As you can see in the table above, our rental income started strong in 2020 but our pace has slowed considerably.
Unfortunately, June doesn’t look to be any better, as one of the properties is vacant and requires ~$2,000 in repairs and upgrades to make it rentable. That, combined with lost rent for a month, means our rental income for June will be down at least another $3,500.
Total investment income this month
Total (dividend + rental) income = $2,562.15
Our trailing 12-month income dipped slightly to $103,875. This means we are 86.6% of the way to our short-term goal of passive income of $120,000/year.
In the table above you can see that our cumulative total passive income through the end of May was up 16% over the same period in 2019. The growth has been slowing down over the course of the year, primarily due to our rental income issues.
Looking at our trailing 12-month total income, you can see that our passive income has dipped a bit, breaking the overall trend of up and to the right.
Right now we are NOT on track to hit our goal of $115,000 in passive income for 2020.
Changes
No changes to our portfolio this month. We are still holding $300,000+ in cash, waiting for an interesting investment at a reasonable valuation.
I’d like to deploy another $200k, leaving us with about $100k in cash. I’d like to keep $100k in cash at all times just out of an abundance of caution.
Recap
May was a decent month considering the circumstances (global pandemic, record unemployment, general fear and concern from everybody).
The good thing is that next month should be much better, as the last month of each quarter is always our best (at least from a dividend perspective).
How did everybody else do with their investment income this month?
Are there any investments out there trading at reasonable valuations that I should be looking at?