The monthly update for the Houston apartment complex arrived today. Things continue to go well. Occupancy has increased to 96%, making this the fourth straight month of increases. Occupancy has gone up every month since we took over the property and I don't expect it to rise any further.
The damage caused by Hurricane Ike came in at around $25,000, which is less than the insurance deductible, so we will not be making an insurance claim. Payments will be made from regular operating funds.
This report is the first one to include comparisons between budgeted numbers and actual numbers. Nothing shady was going on prior to this. It's just that when initially taking over a property, there are lots of one-time expenses and utility deposits that have to be made, so the numbers for the first couple months do not accurately reflect the normal day-to-day operational costs. Even so, there are still some numbers that are out of whack this month due to some errors. The local water company had our billing start date 22 days later than it should have been, so we had almost an additional full month of water and sewer charges. There was also a procedural issue with the payment of leasing commissions going back to when we took over the property, so this month also saw four months worth of commissions paid out, increasing the payroll number. Even with these charges, the property cashflowed a positive $14,000 in September. Adjusting for the errors, the cashflow was almost $22,000.
As for the budget vs. actual comparison of monthly numbers, things look pretty good. Gross rent was right on target, We are under budget in four areas: Loss / Gain to Lease ($383 under), Vacancy ($784 under), Bad Debit ($1,318 under), and Employee Apartments ($200 under). We were over budget on Rent Concessions ($4,867 over), and the previously mentioned utility and payroll areas. Overall, the property was $1,508 over budget for the month of September, meaning it turned a $1,508 smaller profit than budgeted. Rent concessions, as mentioned last month, were high, but they were cut back during the month and the decrease won't be seen until next month's numbers. It also is looking like next month's revenue numbers will be $6,000 higher than this month, which will increase the profit.
I continue to be happy with the performance of this investment!