July 2012 Monthly Expenses

by FI Fighter on August 12, 2012

in Monthly Expenses

July was a busy month as I was focused on closing escrow on my first rental property. As a result, there were some additional costs associated with closing. The appraisal and credit report totaled $461 and the HO6 insurance was $340. Title transfer fees, and other various closing fees came out close to $3000. Since buying an investment property is not something I foresee doing on a monthly basis (wouldn’t that be nice?), I’ve decided to omit these charges from the standard Monthly Expense Report.

Without taking into account for the new property, my total expenses were in-line with what I would usually expect to save. Gas expenses went up a bit this month as I was forced to drive around a lot (to the title company, bank, meetings with real estate agent, etc). This expense will likely increase even further in August when I start visiting the rental on a regular basis to make repairs and do installations to ensure it is move-in ready by September.

Food expenses were kept to a minimum this month as I was able to make week long business trips and expense most of my lunches and all of my dinner meals. I won’t have this luxury moving forward, as I have since resigned from this company. The new company probably won’t have me travelling quite so frequently either.

Total savings for this month were about ~75% of net income. I am pleased with the results, and I am hoping to increase this percentage next month. I received a boost in salary by ~20% by taking on a new position, and again, I have no intentions of inflating my lifestyle. Expenses should be roughly the same, so the savings rate should only increase.

Dividend income this month was low, as Coke (KO) was my only holding to payout. Year to date dividend income is over $300.

On a last note, I have met with a tenant, and we’ve agreed to terms on a 1-year lease on the rental. Monthly rent will be $2100. Based on my calculations, this will net ~$400/month in semi-passive income. These calculations assume a property tax value of $3600/year, or $300/month, which I am hoping are over-estimates of the actual costs. Exciting times!

 

Rent $750.00
Utilities $15.00
Internet $15.00
Food $125.69
Gas $192.51
Phone $50.00
Other / Fun $117.74
Total $1265.94
Expense Ratio 24.62%
Savings Ratio 75.38%

 

Here is an update on the dividends received this month:

7/2/2012 KO $17.97
Total $17.97
Year to Date $317.84

 

{ 4 comments… read them below or add one }

1 Dividend MantraNo Gravatar August 13, 2012 at 6:00 pm

Another stellar month, and I’m glad to see that everything is going smoothly so far with your first rental property. Sounds like that is going to be a great passive income generator for you. Best wishes with that.

I find the $1200-1300 expense range to be my sweet spot and it looks like that is also true for you. I find that if I keep my expenditures around that level all my needs are met, I get to have a little fun and I also save a ton of money.

Take care!

Reply

2 FI FighterNo Gravatar August 13, 2012 at 11:49 pm

DM,

Thanks for the kind words! I have my fingers *crossed*. The tenant doesn’t officially move in until September, so time will tell. Hope for the best, but plan for the worst… I believe is what they say.

Yeah, it’s been difficult for me to reduce my expenses below the $1200-$1300 range. Hence the need for more passive income streams! And I agree, we’ve all got to make room for some fun in our lives. A lot of us early FI seekers are future oriented, but we have to remember to also live in the moment as well.

Glad to see your blog is back in the swing of things. Looking forward to your updates!

Cheers!

Reply

3 Compounding IncomeNo Gravatar August 15, 2012 at 2:22 am

Looks good. The rental property should be even better than $400/month semi passive income because you’ll build equity too. Outstanding savings rate, you’re a machine!

Reply

4 FI FighterNo Gravatar August 28, 2012 at 10:56 pm

CI,

Thanks for the encouragement! Yeah, $400/month in semi-passive income sounds nice on paper. Hopefully there won’t be too many additional expenses that come up that I didn’t account for.

Reply

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