Welcome to the second vacation rental report for the year for Emerald’s Corner. Honestly, I am not looking forward to writing this report. For starters, February is still the slow season. Moreover, because of how I do my accounting, I expect to earn zero income for February, despite the fact that I rented to snowbirds the entire month. Additionally, my expenses for this unit are super high. So, I am not looking forward to seeing what the year-to-date loss is going to be. But, we have to get through this. The busy season starts in March and really picks up in April and May. So, I’ll be excited to write next month’s report. But, of course, we have to get through this month’s report. So, without further adieu, let’s see whether I made a profit or loss for Emerald’s Corner.
Vacation Rental Profit/Loss
Let’s see whether I made a profit or incurred a loss in February 2024 at Emerald’s Corner.
A. Vacation Rental Income
During the month of February, I earned $0.00 in income broken down as follows:
A bit of explanation is in order. I did have snowbirds in the unit. However, they rented the unit from December to March. They indicated that they had to leave early and so they left at the end of February. They already paid for their entire stay back in December. So, that income, because I received it in December, was reported in December. Accordingly, January to February 29, 2024, I will report zero income because it has already been accounted for. I decided to give them a refund for March 1-15, 2024, since they are not staying in the unit.
B. Vacation Rental Expenses
During the month of February, I incurred $7998 in expenses broken down as follows:
Believe it or not, I’m ok with the expenses. Notably, the expenses were less in February than in January. Additionally, part of the reason why the expenses neared $8000 was because I had to give over $1000 refund to my snowbirds because they left 15 days early. This turned out to be a blessing in disguise.
These snowbirds rented the 15 days in March at the snowbird rate of $2500 per month. So, those 15 days were prorated at that rate. After I refunded the snowbirds, because they decided to leave early, I was able to rent out the unit in March at the non-snowbird rate. I will be making several times the income I would have made for those 15 days. So, that’s a good thing.
Additionally, I’ve already worked it out with my snowbirds that I will only be renting to them for January and February next year, so that way we don’t have a repeat of what happened this year. They were fully understanding. It was also part of the reason why I decided to give them a refund for leaving early.
The point is that I can’t wait to post my vacation rental report for March!
C. Profit/Loss Statement
Based on the fact that my expenses exceeded my income, my loss for February was $7998.
As shown below, my year-to-date loss is $17,727
This is a massive loss, although it’s not totally unexpected. The goal is to start chipping away at this now that we are entering the busy season.
Although I’ve indicated that the busy season starts in March, in actuality, March, April and May can more actually be described as shoulder months for the really busy June and July months, followed by the shoulder months of August and September.
The goal is to make enough money in the busy season to help cover the cost in the slow season. It’s going to be really tough to end the year at a profit, and I will have to continue to use my personal funds to help keep this condo afloat. But, I knew that going in. Right now, I’ll be happy if the losses incurred for this year is less than the losses incurred last year. Only time will tell.
Annual Income and Expenses
April 2023 was my first year owning at Emerald’s Corner, and May 2023 was the first time I was able to generate income. So, I don’t have any income or expenses to compare it to. This section will make a lot more sense come February 2025.
A. Annual Income
Let’s see how the annual income at Emerald’s Corner look from one year to the next.
Here is the raw data:
I doubt earning zero for the month this will change in future years based on my accounting practices, but you never know.
B. Annual Expenses
Let’s see how the annual expenses at Emerald’s Corner look from year to year.
Here is the raw data:
Again, having to give that refund brought my expenses higher than otherwise. But, I’m not complaining because it worked out in the long run. Finally, it’s also good to see that my expenses were less in February than they were in January.
This section will make a lot of sense in 2025 when I am able to make an annual comparison.
Final Thoughts
Well, just going by the numbers, this is a dismal report. I’m starting the year with over $17,000 in losses. But, despite all this, I am optimistic. I am hoping to start chipping away at this loss starting in March. Even if I don’t make a profit for Emerald Isle at the end of the year, I am really trying to incur less of a loss than I did in 2023.
For what it’s worth, the massive loss in 2023 did NOT include January to March, because I only purchased the property in April. So, it’s going to be really tough to beat 2023 numbers. However, I will also be making an April to December (or more accurately a May to December) comparison to see how well I do.
Finally, I am waiting to see if interest rates will come down low enough for me to refinance the property which hopefully will help with that massive mortgage that I have to pay every month. The struggle is real, as the saying goes.
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