DATE: March 8, 2018
TO: Members of the Housing & Redevelopment Authority
FROM: Janine Atchison, Housing Coordinator
Title
2017 Rental Property Expense Report
Body
SUMMARY AND ACTION REQUESTED:
The Housing & Redevelopment authority (HRA) is asked to review the income and expense reports for the HRA owned rental properties.
BACKGROUND:
The HRA owns 4 rental properties containing 5 rental units. The properties are:
• 517 Washington St S - 2 dwelling units. Leased to Community Action Agency for Homeless Transitional Program.
• 2330 Elianna Dr. - 1 dwelling unit - Private lease
• 2334 Elianna Dr. - 1 dwelling unit - Private Lease
• 2007 Hidden Valley Rd - 1 dwelling unit - Leased to Ruth’s House of Hope for Women in Transition Program.
ANALYSIS:
517 Washington St S - Built 1900
Rental Income per unit is currently $600/month. The total income, based on current rents, is $14,400 annually. The total income in 2017 was $13,476. There were several factors for the lower income in 2017 including 4 months vacancy and lowered monthly rent.
The income exceeded the general expenses for the property by $3,158. However, there were significant repairs and capital improvements at the property costing an additional $17,941. It should take approximately 6 years for the HRA is able to recoup these additional expenses at the current rate of annual profit.
2330 Elianna Dr - Built 2007
The 4-bedroom dwelling rents for $945/month. The HRA paid an annual associations fee of $2184 and $2500 for taxes. The tenant pays their own utilities. Mowing and snow removal is provided by the association. Repairs/improvements were less than $100 for the year. The HRA has a net gain of $5,872 in 2017 at this property.
2334 Elianna Dr - Built 2007
The 4-bedroom dwelling rents for $945/month. The HRA paid an annual associations fee of $2184 and $2536 for taxes. The tenant pays their own utilities. Mowing and snow removal is provided by the association. The 2017 repairs/improvements were $729. The HRA has a net gain of $5,184 in 2017 at this property.
2007 Hidden Valley Rd - Built 1986
This 3-bedroom rental is one side of a twin home and rents for $1,136/month. The HRA pays the utilities, taxes, insurance, mowing and snow removal. The total expenses in 2017 were $4,281. The HRA has a net gain of $9,866 for 2017.
The HRA purchased the tax-forfeited property from Rice County in 2015 for approximately $36,000. In 2016, the property was rehabilitated at a cost of approximately $73,000. The current assessed value is $172,000.