Third Quarter is in the books. Mine showed record income, along with high expenses. Hopefully you have your data available at your fingertips. The accounting function of a business is not the sexist part of the business, but it a critical part.

I couldn't imagine doing things by feel. Now a days, you would be feeling squeezed by expenses. We typically sorta forget about income part of the business. Why? I believe is because that huge stack of money that comes in gets tossed in to so many expense piles. It is a tough nut to crack for me so I keep up on it. I only have 7% credit utilization at this point, I could not even imagine being heavily leveraged facing some downward pressure in the housing and rental market.

For those of you who stayed up on your business, you are about to be rewarded the next few years. For those whose ship isn't that tight, it might be a bumpy road ahead. Having metrics available helps me stay grounded.

What did Q3 look like for you?

We lost steady income during the renovations of our three studios, so about $2500 per month gone since May. Significant expenses as well, not just with them but multiple places needing physical plant replacements: septic and roofs, hot water heaters and HVACs, flooring and more. Even a bulkhead at our place (insurance does not insure dirt, if anyone was wondering.) Also trees - did I mention trees? Lots of trees.

It was a fun year.

But luckily we could rob Peter to pay Paul and kept our head above water on the remaining, all-performing-well properties.

Jason, that's simply amazing!

You go man!

JS

I take it that you are looking at things quarterly like a corporate business does?

How are you keeping track of it?

Like a profit and loss sheet?

"For those of you who stayed up on your business, you are about to be rewarded the next few years."

What do you mean by that?

How will they be rewarded?

What will cause this reward?

I only do the books at the end of the year so I usually don’t know anything until February.

Most accounting software allows you monitor your business in set intervals or any interval you load up. I use QuickBooks. It is a bit clunky, but it does what I need to - determine, what the cost of owning a place actually is in real life in near real time.

I can't imagine looking at profit on a quarterly basis. It's consistent until you have the big surprise CapEx.

We have one property that performed great for three years. Then we needed to redo the siding on most of it. The next year was a roof. This year we found out that the sewer line is bad and the tenant didn't tell us about a leak that ruined the kitchen floor. (My bad--we were busy dealing with a collapsed basement in a different state and didn't do routine inspections like we should have.) So that property has been a black hole for a couple of years. But like Jason said, after this year it should be gravy.

How do you factor in non-recurring expenses that only happen once in awhile, Jason? Like this year we took out 13 trees at one property. Not CapEx but non-recurring hopefully.