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Protecting Rental Properties with Umbrella Insurance

7 Oct

The following is based on my own experience and understanding, but I’m certainly no expert on the subject. Please be sure to consult with an insurance professional when contemplating your options. Best of luck!

After purchasing our 3rd duplex in May of last year, we felt the time was right to get an umbrella policy – and we’re finally getting around to pulling the trigger.

How Does Umbrella Insurance Work?
An umbrella policy picks up where your other policies’ liability ends. For example: if your auto insurance has $300,000 in liability coverage, a $1,000,000 umbrella policy provides a combined total of $1,300,000 in liability coverage in the event of an auto insurance claim.


(photo by Andreas Schalk)

I also believe our particular umbrella only extends coverage that is already granted by the underlying policies. For instance, if pit bulls were a restricted breed on our homeowners insurance, I wouldn’t expect the umbrella policy to cover that liability instead.

Do I Need Umbrella Insurance?
Not necessarily. This was a personalized decision that took into consideration our assets, lifestyle, and risk-tolerance. My general philosophy is that insurance shouldn’t cover inconveniences like cell phones and windshields – but the really big, bad, life-changing stuff that could take you down financially.

Some people are relatively judgement proof (i.e. there’s not much to take, or what you have is protected in retirement accounts) so the consequences of a no-good-really-bad-day aren’t as extreme. On the other hand owning multiple rental properties probably makes us a greater target for litigation – in the event of an auto accident, it wouldn’t take a personal injury attorney long to find our real estate via public records.

Why Not Use an LLC Instead of Umbrella Insurance?
My (somewhat uneducated) impression is that an LLC is a little overkill for us at this point. I see an umbrella policy as the next step of an asset protection continuum, with LLCs offering greater protection and privacy in exchange for greater cost and hassle.

I also wonder if LLCs are better suited for paid off properties… I’ve read about investors who move mortgaged properties into an LLC with no issues, but I also know a Realtor who had a client get their mortgage called for the same reason.

Shopping Around for Umbrella Insurance
For most carriers we asked, each duplex counts as 2 properties – which means our liability exposure effectively boils down to 2 vehicles + 7 residential properties (which includes the apartment we live in). This exceeded the underwriting limits of many household name carriers, and we ultimately had better luck finding compatible umbrella policies via independent agents.

Often the insured is required to have an auto or homeowners policy with the same carrier, but there are “stand-alone” umbrella policies too. I found the combined offering a little more affordable, but I also wasn’t eager to consolidate our insurance under a single carrier. Agents were much less enthusiastic to work with me once I expressed an interest in stand-alone policies, so I imagine the commissions aren’t as enticing for them.

Comparing Umbrella Insurance Quotes
The odds of paying out are pretty slim, so insurers can offer substantial coverage for a few hundred dollars. We received 4 quotes for $1,000,000 umbrella policies:

  • $200/year (required another policy)
  • $257/year (stand-alone policy)
  • $327/year (stand-alone policy)
  • $460/year (stand-alone policy)

There was also a fair bit of variance in the underwriting requirements that wasn’t apparent until we received the applications. Each policy had around 3-15 questions that acted as pass/fail criteria – some of which could be deal breakers depending on your situation. For example, one policy disqualified locations covered by subsidized housing. Another policy required no construction or renovation in the previous 12 months and the next 12 months.

Our Umbrella Insurance Policy
We selected the $257/year stand-alone policy after taking into consideration cost, flexibility, and the application criteria. I’ll report this expense on our Schedule E and set aside $21/month from our excess cash flow to cover the annual premiums moving forward. If we choose to in the future, we can also increase the coverage in $1 million increments up to $5 million.

This policy counts 1-4 family units as 1 property each, so on paper we represent 4 properties (including our apartment). We can acquire 2 additional properties with similar terms at a higher cost, but 7-10 properties will cap our umbrella coverage at $1,000,000.

I suppose that would be a good problem to have. 🙂

Minimum Liability Requirements
Before we could finalize the umbrella, we had to update the underlying policies to meet the liability minimums:

  • Auto – $250k/$500k bodily injury & $50k property damage
  • Renters – $300k personal liability
  • Homeowners – $300k personal liability

These requirements will vary by policy and carrier. There were also some relatively trivial costs associated with adjusting the individual policies.

Considering this process was a bit more difficult than I was initially expecting it to be, I’m very content with the price and terms of the policy we found – and pleased that it should serve our needs for the foreseeable future.

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Monday Mixed Bag – Flooding, Appraisal Protests, and Prospecting Letters

10 Aug

I hope everybody is staying cool out there! We’ve been keeping plenty busy this summer – I recently got back from a trip to South Padre Island to pre-celebrate my sister’s wedding.

South Padre Island Beach

For the most part our rentals have been blissfully business-as-usual, but I do have a few notable highlights worth sharing:

Memorial Day Weekend Floods
You may have already seen this on the news: Central Texas experienced some extraordinary rain and flooding over Memorial Day weekend. On one hand we could use the rain, but things got a little cray cray there for a bit.

My cousin in central Austin!

My cousin in central Austin

Luckily our properties were not affected, but it did give me reason for pause at the time. We have homeowners policies but nothing that covers flooding – should we have a flood policy? Then again, this was a pretty darn good stress test and the properties passed with flying colors, so we ultimately decided to keep our current coverage.

On a related note, many moons ago an insurance agent shared this nifty website that estimates flood risk using a map interface. I don’t know how legit it is, but it might be worth a peak when considering a new property.

2015 Appraisal Protest Results
After last year’s unbridled success, Corey tried his hand at protesting our tax appraisals again. The proposed year-over-year increases were… steep.

Property 2014
2015 Proposed
% Change

Duplex #1 $179,362 $239,473 34%
Duplex #2 $149,488 $164,749 10%
Duplex #3 $151,313 $191,984 27%

Good-ness. But compared to our latest comps (and the appraisal district’s) the proposed values were reasonable – we simply didn’t have a lot of contrary data points to work with this year.

Corey still managed to knock a few thousand off the appraised value and saved $157 in taxes. Once that is applied to our mortgage pre-payment goal we’ll save another $255 in unpaid interest for a total savings of $412.

Reducing Competition in a Seller’s Market
As you’ve probably deduced, our real estate market is really hot right now. You might recall we were competing against multiple cash offers when we purchased duplex #3 last year.

We were recently the recipients of some crafty prospecting letters that were attempting to find duplex sellers BEFORE the competition can get involved:

Dear [Name], My wife and I live in the [city] area and we are interested in purchasing a duplex on [street]. If you ever consider selling your duplex, please let me know.

Would have been a little more convincing if there wasn’t a 2nd letter in our mailbox asking about a different duplex and claiming they live in a different part of town. 🙂  4 months later we received another letter (just one this time) from the same couple, with a refined message:

Dear [Name], My wife and I are interested in purchasing a duplex in [city] and came across your property on [street]. We are pre-approved with a local Austin lender and can close within 30 days of contract. Minor repairs and issues do not represent a problem for us. Please contact us if you have thoughts about selling.

Little white lies aside, I do wonder if there’s any merit to this tactic. It would be easy to recreate if you had a few neighborhoods in mind, and then cross-referenced those addresses against the county appraisal district’s website to get owner addresses.

Looking Forward
We’re gearing up for 2 vacancies in September and October. For the first time ever we’re going to let our property management company handle the majority of the make ready work, but I’ll still take a day off to inspect things for myself and tidy up loose ends. I find vacancies a LOT of work, so I’m looking forward to seeing how this higher cost/less hassle trade-off treats us.

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Investment Property Balance Sheet – 2015 Edition

23 Jun
Duplex Balance Sheet

(photo by frankieleon)

Our annual look at rental income and expenses, averaged across 12 months. We own duplexes so these numbers represent 6 units across 3 properties, purchased between 2011 and 2014.

We also perform this analysis when seriously vetting a new rental property to help spot unexpected surprises (property in a flood plain? outrageous HOA dues?) and verify cash flow.

Duplex #1

  • Total cost: $181,350, latest comp $245,000 (Feb 2015)
  • Down Payment: $45,350 (25%)
  • Mortgage: originally $136,000, currently $127,830
  • Estimated Equity: $117,170

Duplex #2

  • Total cost: $144,000, latest comp $189,000 (Apr 2015)
  • Down Payment: $36,000 (25%)
  • Mortgage: originally $108,000, currently $93,223
  • Estimated Equity: $95,777

Duplex #3

  • Total cost: $201,000, latest comp $216,000 (Apr 2015)
  • Down Payment: $61,500 (30%)
  • Mortgage: originally $139,500, currently $137,395
  • Estimated Equity: $78,605
Revenue Duplex #1 Duplex #2 Duplex #3 Monthly Total
Unit A $1,025 $975 $1,050  
Unit B $1,095 $950 $1,050  
-$41 -$37 -$40  
Total Income $2,079 $1,888 $2,060 $6,027
Principle & Interest $699 $531 $738 $1,968
Taxes $352 $365 $365 $1,082
Insurance $69 $76 $63 $208
$150 $150 $150 $450
Carpet Fund ($800/5yrs.)
$13 $26 $26 $65
HOA $50 $0 $0 $50
Property Mgmt (10%) $212 $193 $210 $615
Leasing & Releasing (30%-60%) $80 $72 $79 $231
Umbrella Insurance $12 $13 $13 $38
Tax Prep
$12 $12 $12 $36
Total Expenses $1,649 $1,438 $1,656 $4,743
Cash Flow $430 $450 $404 $1,284

Some Highlights & Observations:

  • Stagnant Cash FlowLast year I predicted our cash flow to slowly increase past our typical $400/property/mo. average because I thought most expenses had been accounted for – but we found a few more. 🙂 Technically it has risen because we got property #3 to market rate, but we also added additional protections and conveniences like umbrella insurance and tax preparation fees. Maybe next year!
  • Rent Appreciation – While cash flow remained stagnant, property #1’s rent has increased 27.5% since our first balance sheet in 2011 – bringing in $457 more income (the cash flow equivalent of having a whole other duplex). Unit A is currently under market rate, so if you assume $1,095 for both sides that would be a $527 increase!
  • Average Cash Flow vs. Actual – Since spending tends to have peaks and valleys, I’ve been charting my actual monthly cash flow throughout 2015 so I can share that perspective in the future. The $150/property/month is really a best guess… some months are SURPRISE! and others months nothing remarkable happens at all – cha ching!
  • Umbrella Insurance – I was hoping to have an umbrella policy setup by now, but no dice – so this is merely a conservative estimate using the most promising quote I have at the moment. I’m guessing insurance agents must not make a lot of commission on umbrella policies, because they sure don’t seem eager to provide quotes for them.
  • Tax Prep Fund – This was the first year I realized we could deduct a portion of our tax preparation fees on our rentals’ Schedule E. Previously we’d been applying it as a miscellaneous itemized deduction… fat lot of good that did us. Oh well, live and learn. I cringe paying a professional for something I used to do myself with online tools, but I still don’t feel reasonably qualified to handle rental tax details like cost basis calculations, depreciation schedules, and improvements vs. expenses.
  • Vacancies & Leasing/Releasing Fees – A guestimate that assumes 1 unit from each property will be vacant for 2 week a year. Using these same vacancy assumptions, I budgeted one renewal fee (30%) and one releasing fee (60%) per year, per property.

Previous Statements:

“Plan specifically so you can implement flexibly.”  – Dallin Oaks

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Protest Alternative: Hiring a Property Tax Consultant

28 May Property Tax Appraisal Protest

Note: the information below is definitely Texas-specific, and possibly county-specific – so please take caution when applying it to your local area!

It’s that time again – property tax appraisal season.

Last year we shared Corey’s first-timer experience protesting our property tax appraisals (and saving $1,454) for two rental properties:

  1. Received Appraisal Notice, Reasons to Protest
  2. Filed Notice of Protest, Requested Appraisal District Documentation Letter
  3. Compiling the Evidence
  4. Informal Meeting & Outcome

A recent article by the Austin American-Statesman analyzed Travis County’s 2014 tax season: 74% of all protests resulted in reduced appraisal value, but once you account for withdrawn protests then 97% of those who completed the protest process saved money.

But I also accept that some property owners simply aren’t going to represent themselves. Maybe you’re busy, intimidated with the process, or don’t think the hassle is worth the benefit.

Property Tax Appraisal Protest - Agent vs Self Representation

Fair enough, but the good news is that many of you probably have access to a convenient and cost-effective alternative – hiring a property tax consultant.

What does a property tax consultant do?
A coworker told me about a service that handles his protests on a contingency basis – i.e. he only pays if they save him money. I’m sure the average homeowner is capable of doing it themselves, but consultants have the time, expertise, and data to navigate the protest system for you.

Call me naive, but I didn’t even realize this industry existed. I did a little research and found if they do lower your appraised value they get a cut of the tax savings – I’ve seen anywhere between 33-50% depending on location. That might sound like a lot, but remember you were going to pay more than that in taxes if you didn’t protest at all.

Property Tax Appraisal Notice

Using last year’s numbers as an example, we would have saved $1,454 in taxes and paid $480-$727 to the consultant for a net gain of $727-$974. That’s no chump change. Of course if you ARE willing to protest your own taxes you can pocket that consultant fee, but it’s a win-win either way.

Find one by searching your city or county name + phrases like:

  • Property Tax Counselor
  • Property Tax Consultant
  • Property Tax Consulting
  • Property Tax Professional
  • Property Tax Representation
  • Property Tax Appeal Service
  • Property Tax Service
  • Property Tax Agent

Sometimes the property tax consultant saves my coworker money and sometimes they tell him he doesn’t have a good case this year – either way he doesn’t pay anything unless they get a reduction.

If you’re tempted to try this for yourself, don’t delay – I know the deadline for our county is June 1st, which is right around the corner!

“A penny saved is worth two pennies earned . . . after taxes.”  -Randy Thurman

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Laminate Floor Water Damage & Mid-Lease Replacement

23 Apr

Since I tout the benefits of rental property, it’s only fair that I also share when things don’t go according to plan. This is totally one of those times.

Last spring a leased washing machine overflowed, destroying the laminate floors in one of our rentals. Our tenants had already contacted the appliance company, who agreed to cover the damage (via their insurance). Now we needed to replace the flooring… while the tenants were still living there.

Water Damaged Laminate Floors

I suspect I could give this scenario to 5 different landlords and I’d get 5 different opinions on next steps. Here’s how it went down for us:

  • It took months for (1) the appliance company to file a claim with their insurance and (2) the insurance company to send an appraiser to inspect the damage. When insurance denied the claim the appliance company decided to pay us directly while they appealed the decision – a darn classy move on their part.
  • We requested two 2 flooring quotes – one for laminate and one for ceramic tile. The less expensive laminate estimate was provided for insurance purposes with the expectation that we’d add some money of our own to replace the floor with tile instead.
  • Movers helped us reallocate the tenants’ belongings to the kitchen, garage, and a rented storage pod. The next day, the flooring company began the process of removing the laminate and installing tile.
  • Meanwhile our tenants camped at a nearby hotel. It annoyingly took a day and a half longer than originally estimated, but at least the flooring company discounted the bill to compensate for the extended hotel stay.
Tile Floor Installed

We paid a little extra (~$300) to have the tiles installed diagonally – looks great!

What an ordeal. Our floor replacement costs:

  • Moving Help – $235
  • Storage Pod – $329
  • Hotel (3 Nights) – $519
  • Tile and Installation – $5,136

$6,219 Total – $4,864 Reimbursement = $1,355 Out-Of-Pocket

Some silver linings:

  • I never particularly cared for that laminate flooring in the first place, but it was already installed when we purchased the property and we couldn’t justify replacing it for aesthetics alone.
  • All things considered, $1,355 is a great deal for new ceramic tile flooring. I dare say we came out ahead, especially since we were probably going to upgrade the flooring to ceramic tile someday.
  • Could we have gone after the tenants to recoup some of these costs? Probably. All-in-all this was a good example of all parties (landlords/tenants/appliance company) being a little flexible to make the best of a bad situation. Any of us could have taken a hard line with demands, but didn’t. Well… except the insurance company.  😈

For the most part I figure surprises like this come with the territory. It was a lot of hassle and uncertainty – but nothing we couldn’t overcome with patience, perseverance, and our rental emergency fund.

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Don’t Confuse Real Estate Investors with Landlords

16 Feb

Be wary of the excuses people give themselves when dismissing rentals – the reality is not so black and white. Many of the perceived pain points (finding renters, late night phone calls, challenging tenants) are primarily landlord fears, and being a landlord is not the same as being a real estate investor.

Landlord vs Real Estate Investor

Investment properties pose unique challenges and they aren’t for everyone, but discouraging yourself and others from doing something you haven’t even tried because “it’s too much work” is a weak sauce argument. And not necessarily true.

Our Changing Priorities & Responsibilities
In 2011, we were excited to jump into this real estate experiment, prioritized cash flow over convenience, and wanted to keep close tabs on our investment.

Excited Boy with Toolbox

(photo by ocbeejay)

We started out as proper landlords managing everything ourselves:

After our 2nd duplex we were a little burned out, but we still believed in the long-term benefits of investing in real estate. Today we have 3 duplexes (6 units) in addition to our full-time day jobs.

Hire Property Management Company for Rentals

(photo by Nguyen Hung Vu)

It didn’t take long for us to hire a property management company, which delegated the vast majority of our day-to-day hassle. I no longer worry about how to get a plumber to show up on a Sunday or remembering when the next lease comes up for renewal.

Our workload today is about 20% of what it was:

  • Approve the occasional expense or request
  • Bookkeeping
  • Coordinating insurance policies
  • Make ready work

Delegating isn’t an all or nothing proposition either – the work we’ve chosen to do ourselves is generally more predictable and easier to fit into our schedules. Your time vs. money balance might be different than ours.

Golden Rule: Choose Properties with Flexibility
When buying a new property, we follow the 1% rule and then plug estimated costs into our balance sheet to vet out any financial deal breakers.

Even if you intend to manage the property yourself, I highly recommend including the cost of hiring a property management company into your cash flow assumptions.

changing priorities of being a real estate investor vs landlord

(photo by R/DV/RS)

Nothing wrong with being a landlord and pocketing the extra cash flow, but 30 years is a long time and priorities can change. You’d be doing yourself a favor to keep your options open by buying a property that can support the costs of hiring a property management company – just in case. This “flexibility insurance” will dramatically increase your odds of having a positive experience with rental properties long-term.

Play your cards right and you can still build substantial assets and realize early retirement without the day-to-day hassle of being a landlord. Rental properties require many hats – but you don’t have to wear them all yourself.

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Comparing Replacement Cost Estimates for Home Insurance

21 Jan insurance replacement cost estimate

Insurance agents and I have a complicated relationship. I hate up-selling, and once that line is crossed it’s hard for me to distinguish between greedy self-interest and sound financial advice.

Call me cynical, but when my agent told me a property worth $157,000 would cost 79% more to replace it seemed prudent to get a 2nd opinion.

Home Insurance Replacement Cost Calculation

(photo by Anna)

Too much coverage and you’re wasting money, too little and you’re not fully protected after a catastrophic event. Where’s the goldilocks zone? Consumer Reports recommended and, so I decided to compare these 3rd-party sources against the carrier’s estimate.

Data Point 1 – Insurance Carrier / Agent
This replacement cost estimate comes directly from the carrier’s online tool, which is used by agents when pricing a new policy.

homeowners insurance replacement cost estimate

(photo by arbre_evolution)

There are legitimate reasons why the cost to rebuild would be higher than market value, but I question whether the agent and carrier have a conflict of interest (financial and liability) that incentivizes them to over-estimate.

Also, pay attention to the accuracy of the inputs – your agent might assume more expensive finishes than what is actually there (brick vs. wood siding, wool vs. acrylic carpet). I had to send mine back with corrections – twice.

Original Replacement Estimate: $280,600
Revised Replacement Estimate: $273,100

Data Point 2 –
A free tool provided by the publishers of the National Building Cost Manual. This no-frills estimate consists of roughly 8 sections with the usual criteria – location, square feet, # of kitchens and bathrooms, HVAC, finishes, etc.

One unique input was the quantity of exterior corners. I’m merely guessing that more exterior corners = more complexity = higher construction costs. Replacement Cost EstimatorSince it is more contractor-oriented than insurance, it does not include the costs to remove the original structure/debri. P.S. – if you have problems viewing the emailed report, try opening in WordPad instead.

Replacement Estimate (w/o debris removal): $245,874

Data Point 3 –
AccuCoverage costs $7.95 and is the consumer arm of Marshall & Swift, a provider of building cost data for the insurance and real estate industries. This estimate was probably the most comprehensive, and’s insurance board calls Marshall & Swift “among the best.” Replacement Cost Estimator

Marhsall & Swift also offers a separate replacement cost estimate tool to insurance agencies, so you might have access to a similar report for free through your agent. Again, keep an eye on those inputs.

Replacement Estimate: $310,478

Final Thoughts
Credit where credit is due, the average of both 3rd-party estimates comes out to $278,176, which is pretty spot on with the carrier’s $273,100 estimate. Satisfied, we finalized the policy and moved on to umbrella insurance.

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2014 Goal Results & Highlights

22 Dec

Earlier this year I created goals for 2014 to keep me on-track. The results:

✔  Pay Down Mortgage Debt$3,522 applied to mortgage #2
✔  Expand Property Management – done!
✔  Mean Tenants – replaced with pleasant people at market rate
✔  Try Discounted Gift Cards – success!
✔  Another Property – technically, but we weren’t expecting a rental
✔  25 Blog Posts – squeaked in at 27 posts this year, yay!

Having goals was quite motivating – a way to ensure “someday projects” get prioritized. When reflecting on the past year, a few key initiatives stand out:

Buying Duplex #3
Our third purchase last May made three properties in as many years – not too shabby! It was also the second time we saved a down payment for a primary residence and ended up buying a rental property instead.

What can I say, we have a problem. 🙂

rental property living room 3

We stumbled on some legitimately good deals, but also wanted to maximize our advantage as DINKs (dual income no kids) while we could. It’s not hard to see a future where adult responsibilities stall our current momentum.

This acquisition was unique because the cash flow and appraised value were low for the purchase price, but our research suggested it still had potential. After a $200/unit rent increase (both tenants stayed!) and a new sales comp – we were back on track a mere 2 months later.

Series: How We Saved $1,454 on Our Property Taxes
Corey’s victorious quest to protest the tax valuations on two properties, broken into a 4-part series:

  1. Receiving a Notice of Appraised Value
  2. Filing a Notice to Appeal & Requesting Supporting Documentation
  3. Compiling the Evidence
  4. Appraisal District Meeting & Outcome

A good example of a financial skill that should be taught in public education, but usually isn’t. I group it in with preparing your taxes, the effects of compounding interest, and calculating student loan payments before a student chooses a college or major.

Aspirations / Running the Numbers
It’s fun to daydream about the future of our real estate empire. I noodled through hypotheticals like how many properties we’d need to retire and whether it would be faster to finance or buy outright.

day dreaming clouds

(photo by Kevin Dooley)

Turns out we could probably buy 13 leveraged properties faster than 5 paid off ones – all things being equal – while generating the same net income. Realistically, we’ll probably do a combination of both, and now that we’ve topped off our rental savings we’re cooking with pre-payment fire again!

Make Ready Kit + New Additions
I continue to adore our make ready kit, and got the opportunity to try it out in the field during a vacancy in November.

Make Ready Vacancy Kit Additions

Through trial and error, I’ve added to the inventory a bit:

Now the real question is whether to expand to a second bin….

Discounted Gift Cards
For those tempted to give discounted gift cards a try, I’d recommend waiting until just after Christmas. An influx of holiday gifts will likely upset the supply/demand model in your favor. More inventory = better discounts.

Also, a big thank you to those using our Raise and Cardpool links – any referral credits are going straight to our mortgage pre-payment efforts!

Cardpool Referral Credit

Previous Recaps:

“By three methods we may learn wisdom: First, by reflection, which is noblest; Second, by imitation, which is easiest; and Third, by experience, which is the bitterest.”  -Confucius

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Join 186 other subscribers Review: Online Rent Collection

14 Jul

We started using with our very first duplex, and we’d probably still be using them today if our property management company didn’t have their own online payment system.eRentPayment logoWhat is
In the most basic sense, transfers rent from the tenant’s bank account to yours. At the time I wanted to accept online payments, but other services favored property managers or larger rental portfolios by bundling multiple transactions into a monthly fee. doesn’t have many frills (it is not a full-service property management software), but it is a steal of a deal at $3 per transaction.

Automation is Your Friend
I adore how everything can run for months at a time without my intervention… reminders are sent, rent is collected, late fees are assessed, and funds are deposited into the account of my choosing. Even in the age of mobile banking, it eliminates an errand or two that would otherwise be required every. single. month. There’s no way I’d go back to paper checks now.


(photo by TMAB2003)

Other benefits and customizations:

  • Collect rent monthly, weekly, or biweekly
  • Rent due on 1st, last, or a specific day
  • Can require automated payments
  • Transaction fee paid by landlord, tenant, or split
  • Return security deposits electronically (separate $3 fee)
  • Automates late fees – making the tool “the bad guy”
  • Can prohibit partial rent payments
  • Prompt and professional customer service

$3 Sounds Too Good to Be True – What’s the Catch?
Admittedly, the reporting interface leaves something to be desired. I printed the email confirmations for my accounting binder, but I couldn’t access an “official” payment receipt from my online account. All the information is there, but transaction details are generated in a bare bones pop-up without ‘print page’ functionality.


The only significant snafu occurred when a tenant mistyped their bank account number, and the debit was rejected after it had already been deposited into our account. I was confused, the tenants were confused, but with support’s help we successfully reran the payment.

For the most part, everything works like it should. For the best value, stick with the $3 bank-to-bank transactions, but there is a relatively new option to accept cards for an additional charge (1.5% for debit, 2.95% for credit). Also, be careful if you’re going to use for other types of payments – even a $25 application charge will incur a separate $3 service fee.

Another angle to consider: now that we’ve got 6 units up and running it would be worthwhile to compare my options elsewhere – I could probably do a little better than $18/month total to collect rent.

For the smaller, independent landlords – I absolutely recommend using It really does help streamline the day-to-day management of rental properties, leaving more time and mental energy for other things.

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Saving Money with Do It Yourself Pest Control

6 May

I called an exterminator for one of our duplexes, and inquired about the specific chemicals used because of a tenant’s health concerns. He said they typically apply Phantom – a general pest control product for insects and termites. A quick Google search brought me to a pest control supply website, where I verified it was safe for children and pets, and wouldn’t agitate asthma.

(photo by Kathleen Franklin) Note: this is not the company we used ourselves

The both sides were treated for a total of $150. Having never hired an exterminator before, and I found the experience rather underwhelming. I’m not sure what I was expecting. Something more… scientific? He really just sprayed the chemical around the foundation, nothing particularly skilled.

I didn’t think much more about it until a few weeks later when a tenant at a different property requested pest control and it clicked: we could probably save some money by doing our own pest control treatments instead.

The aptly named provides customer reviews and an extensive Q&A about product selection and application. Also, there isn’t anything worth knowing that somebody hasn’t already put on YouTube:

Cost Breakdown of Our DIY Pest Control:

Total cost: $77.82 (half the cost of the professional service!)

What’s more, each treatment only uses 3 ounces of the 21 ounce bottle, which means I could get 6 additional treatments at no additional cost. That’s equivalent to $1,050.00 worth of the professional service for $78.00.
pest controlPerhaps we’ll call an expert to handle an infestation, but this will do the trick for seasonal preventive care along the exterior. So far no issues or complaints. Like the duct cleaning, we’ll try to incorporate this into our make ready work moving forward.

Shameless Plug
If you decide to give DIY pest control a try, please use my referral/coupon code (KATH6799) when ordering from You’ll get $5 off your first order of $50+ too. Thank you!

“The way to wealth depends on just two words, industry and frugality.”
-Benjamin Franklin

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