July 31, 1999
QUARTERLY REPORT TO THE LIMITED PARTNERS
OF DSI REALTY INCOME FUND VI
DEAR LIMITED PARTNERS:
We are pleased to enclose the Partnership's unaudited financial statements
for the period ended June 30, 1999. The following is Management's discussion
and analysis of the Partnership's financial condition and results of its
operations.
For the three month periods ended June 30, 1999, and 1998, total revenues
increased 2.3% from $693,141 to $708,947 and total expenses increased 2.0%
from $431,201 to $439,887. As a result, net income increased 2.7% from
$261,940 for the three-month period ended June 30, 1998, to $269,060 for the
same period in 1999. The revenue increase can be attributed to an increase
in rental income as a result of higher unit rental rates. Occupancy levels
for the Partnership's six mini-storage facilities averaged 84.3% for the
three month period ended June 30, 1999, compared to 87.7% for the same period
in 1998. The Partnership is continuing its marketing efforts to attract and
keep new tenants in its various mini-storage facilities. Operating expenses
increased approximately $4,000 (1.1%) primarily due to an increase in main-
tenance and repair expense. General and administrative expenses increased
approximately $4,700 (6.6%) primarily as a result of an increase in Colorado
State Taxes, partially offset by a decrease in legal and professional expenses.
For the six month periods ended June 30, 1999, and 1998, total revenues
increased 4.4% from $1,350,230 to $1,409,915 and total expenses increased
4.1% from $816,372 to $850,248. As a result, net income increased 4.8% from
$533,858 for the six months ended June 30, 1998, to $559,667 for the same
period in 1999. The reason for the increase in revenues is the same as
discussed above for the three-month period. Operating expenses increased
approximately $28,500 (4.3%) primarily due to increases in maintenance and
repair, real estate tax, security expenses and property management fees,
partially offset by a decrease in salaries and wages. Property management
fees, which are based on rental revenue, increased as a result of the increase
in rental revenue. General and administrative expenses increased approximately
$5,400 (3.7%) for the same reasons as discussed for the three-month period
above.
The General Partners plan to continue their policy of funding improvements
and maintenance of Partnership properties with cash generated from
operations. The Partnership's resources appear to be adequate to meet
its needs. The General Partners anticipate distributions to the Limited
Partners to remain at the current level for the foreseeable future.
The Year 2000 issue refers to the inability of certain computer systems to
recognize a date using "00" as the Year 2000. The Partnership has implemented
a Year 2000 program, which has three phases: (1) identification; (2)
remediation; and (3) testing and verification. The Partnership, as well as
the property management company and the Partnership's warehouse facilities
have completed those phases. Computer programs have been upgraded and tested
to function properly with respect to the dates in the Year 2000 and thereafter.
Year 2000 compliance costs are nominal and have been expensed in the regular
course of business. The Partnership provides no assurance that third-party
suppliers and customers will be compliant. Nevertheless, the Partnership
does not believe that the Year 2000 issue will have a material adverse effect
on its financial condition or results of operations.
We are not enclosing a copy of the Partnership Form 10-Q as filed with
the Securities and Exchange Commission since all the information set
forth therein is contained either in this letter or in the attached
financial statements. However, if you wish to receive a copy of said
report, please send a written request to DSI Realty Income Fund VI,
P.O. Box 357, Long Beach, California 90801.
Very truly yours,
DSI Realty Income Fund VI
By: DSI Properties, Inc., as
General Partner
By___\s\ Robert J. Conway_______
ROBERT J. CONWAY, President