Finance Struggles

It’s not all roses here in my blog land. I am struggling with finances like anyone else. Last month the return from my rental properties was a huge $1500 lower than normal. A couple of routine repairs, water and sewerage costs at both sites and strata costs took the bulk of that. What’s left is approximately $1200 short for the month’s mortgage payments. This is very stressful and I’ve had to divert funds from Vanguard and savings to make up the shortfall. I’ve now made only one payment in a month to my Vanguard account and it’s languishing well behind where I had hoped it would be.

Even focusing on my spending hasn’t really helped. There are still things I have to repair / replace and the money has to go out for this. I’ve really had to stop and reflect on whether or not now is the time to be trying to smash cash into my savings or if paying debts is more important. I have a sense of honour about these things, so debts being paid is critical. But this doesn’t help my feeling of disappointment when I look at the balance sheet at the end of the week and see a whole lot of zeroes. What hurts more is that shortly both my rental properties are potentially going to be empty. That is, one is out of lease and the chap is moving out, and in my flat the guy just left. He has since been back to sort it out, but only 8 weeks into a 12 month lease and I have to re-advertise and let it again. It’s very disappointing.

Now I’m back to rebuilding my focus on finances and having a very hard look at whether these investment properties are worth having. While they may be running at a loss and can be negatively geared which is quite tax effective, I’m left with a capital shortfall in the meantime. Which in normal speak means I’m asset rich and cash poor. And cash is king. I’m consoling myself though – in time things will get better. My incoming money will increase, the loan costs will decrease and I’ll find good tenants. It’s just the short term that I’m struggling a bit with. The long term I’m fine with (I think!). Perhaps a good break over Easter will help bring some clarity.

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