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Becoming a Landlord
For those of you just tuning in, my mother-in-law died in April.
Since then, we’ve spent nearly every available moment at our inherited house, digging out and cleaning up.
My mother-in-law was a compulsive hoarder. I’m not going to get into the details of her compulsion, but we have–so far–filled a 30 yard dumpster. For perspective, that’s big enough to fit our Ford F150.
Now that the house is approaching the point where we can begin updating and remodeling, I’ve been looking into the requirements to rent it out.
In my city, I need to get a business license that costs $95 per year. This comes with a requirement to allow the city to inspect the property every two years.
Before they will issue the license, I have to take an 8 hour Minnesota Crime Free Multi-Housing Program class that covers tenant screening, lease addendum, evictions, and “etcetera”, followed by a physical audit of the property to ensure minimum security standards.
The lease addendum basically reads “If you are loud, obnoxious, threatening, criminal, intimidating, or doing/dealing drugs, you will be evicted.”
The actual costs to become a landlord are going to be:
- Something under $100 for my wife and I to take the landlord class. The price varies from free to $40, depending on the hosting city.
- $95 per year for the privilege of using our private property to conduct a private transaction with a private individual.
- The remodel. I don’t know what this is going to cost, yet. There’s an unfinished bathroom in the unfinished basement. I’d like to finish both of those, though the basement will never hold a 3rd bedroom, due to code. The entire house need to be painted and have the trim replaced. The dining room and hallway have hardwood floors, hiding under linoleum that was never properly put down. We may need new windows.
If possible, I’d like to keep the project under $20,000. Since we’re not adding a 3rd bedroom, or tearing out the kitchen cabinets, it should be possible.
In the meantime, expect to see a bunch of remodeling and renting related posts coming up.
Expensive Cheese
Saturday morning, I woke up to a room-temperature refrigerator. I dislike drinking milk that’s 40 degrees warmer than I’m used to.
We called the repairman who showed up at 9PM and poked around in the fridge for a bit before announcing that he didn’t have the needed parts in his truck.
The parts came Monday. The next repairman got there Tuesday afternoon. For those of you keeping track at home, that’s nearly 4 days without a refrigerator.
That poor bacon.
Tuesday’s repairman didn’t think highly of Saturday’s. Apparently, the two parts Saturday ordered never go bad at the same time, so he was guessing.
He also didn’t notice the slice of individually wrapped American cheese that had slipped between a shelf and one of the cold-air vents, preventing any air flow at all.
Grr.
I wish I would have noticed that on Saturday. I now own the most expensive cheese in the world. It’s not Pule, which comes in at $616 per pound. This lowly slice of American cheese cost me nearly $200. At one ounce per slice, that’s $3200 per pound. Of course, I’m counting the lost food. My hamburger, eggs, bacon, milk, and mayonnaise are gone, along with every other perishable bit of food we had on hand.
I don’t know how much the repairs cost. Saturday’s visit, minus the parts, was billed at $95. I didn’t see the total for Tuesday’s visit.
We pay for a repair plan through our gas company. For around $15 per month, we get a list of appliances protected. We don’t have to worry about our washer, dryer, water softener, stove, refrigerator, or our sewer main. Assuming Tuesday’s visit was billed the same as Saturday’s, this one repair paid for the plan for an entire year. When you count our sewer main–which backs up with tree roots once a year and costs at least $200 to fix–the repair plan is definitely worth it for us.
When we get tenants in my mother-in-law’s house, we’ll have the repair plan set up there, too.
Do you use any kind of repair plan? How is it working out for you?
How Much Does It Cost to Fight the Yosemite Fire?
The summer of 2013 has proven to be a destructive one. Brush fires have engulfed much of the Western United States, consuming large forests and chasing citizens out of their homes. The fire known as the Rim Fire is closing in one the Yosemite National Forest, one of the most popular tourist destinations in the country.
Managing forest fires in the Western United States has been a consistent struggle over the decades with budgets proving to be hard to navigate around for local, state, and federal firefighting forces. Around 32,000 individual brush fires across California and other western states has resulted in the destruction of 3 million acres of land. To battle these blazes, the U.S. Forest Service, a federal office, contracts with private, state, and local firefighting agencies by providing funding, equipment, resources, and the chemicals needed to stop the blazes. On August 19th, 2013, the U.S. Forest Service has used $967 million to fund the management of these fires. At that time, the U.S. Forest Service only had $50 million left in its budget.
Why is the budget so affected this year compared to other years? For example, in 2012, the total amount of forest fires the U.S. Forest Service answered to totaled to around 67,700 fires and the destruction of 9.3 million acres of land. However, budgetary choices made by the Congress over the decade have made available funds for the U.S. Forest Service hard to find. In addition, the budget sequester, which went into effect this budget year, subtracted $115 million from federal wildfire management programs.
In addition, individual states are seeing their state budgets affected. California had to declare a state of emergency on August 23rd, 2013. One example of a damaging effect to California included the Rim Fire destroying much of the infrastructure near the Hetch Hetchy Resovoir, which supplies water and hydroelectric power to much of San Francisco. As a result of the damage, the city of San Francisco and neighboring municipalities that use the same energy source, spent over $600,000 in replacement water and energy. Private costs are also immense; thousands of homes and private property have been destroyed across the west, including from the Rim Fire. The Rim Fire near Yosemite threatens the national park, the metropolitan San Francisco area’s water and energy supply, and the major municipalities near. By August 25th, 2013, 143,980 acres near Yosemite National Park have been engulfed by the Rim Fire with only 7% of the fire contained. The Rim Fire is approximately 20 miles away from Yosemite National Park and although Route 120 heading into the park is closed, park officials are hopeful that the park will not be affected by the fire thanks to its current distance. If the Rim Fire expands to the Yosemite National Park, the costs for the U.S. Forest Service from the fire damage and trying to contain the fire could catapult higher.
Charity is Selfish
I try to give 10% of my income to charity. I don’t succeed every year, but I do try.
I don’t give because I’m generous. I give because I’m selfish.
If you give to charity, you are too.
I’m not talking about people who give to charity strictly for the tax deduction, though that is selfish too. I’m referring specifically to the people who give to charity out of the goodness of their hearts.
If I give a thousand dollars worth of clothes to a homeless shelter, I get a warm fuzzy feeling knowing that I helped people stay warm.
If I send $100 to the Red Cross for whatever terrible disaster happened shortly before I made the donation, it makes me feel good to have contributed to saving those lives.
The put-the-inner-city-kids-on-a-horse thing we do? Makes me happy to get those kids into a positive situation.
Donating blood? Yay, me! I’m saving lives!
While it’s nice to help other people, that’s not the ultimate reason I’m doing it. I do it because it makes me feel good about myself to help other people, particularly people who–for whatever reason–can’t help themselves.
That’s the basis of altruism. It’s not about helping others, it’s about feeling good about helping others.
The truly selfish, the evil dogooders, are the ones who want to raise taxes to give it away as “charity”. They get to feel like they are doing something and helping others while not actually contributing themselves and, at the same time, stealing that warm fuzzy feeling from the people who are providing the money to start with.
Evil.
Charity has to be done at a personal, local level or the benefits to the giver are eliminated while the benefits to the receiver are lessened. Bureaucracy doesn’t create efficiency.
For the record, if it’s taken by force, by tax, it isn’t charity. Charity cannot be forced. Forcing charity is, at best, a fraudulent way for petty politicians, bureaucrats, lobbyists, and activists to feel they have power over others.
Again, evil.
Mortgage Race
I spent last week at the Financial Blogger Conference. Saturday night was the big debauch, a 90s themed hip-hop dance party.
Yeah.
Instead, Crystal, Suba, and I hosted a super-secret pizza party to let some of the less “dance party” inclined attendees discuss things like the sanitary concerns of group body shots, sex toys, and horror movies.
During the course of the party, Crystal and I decided to race to pay off our mortgages.
Her balance is just under $25,000.
My balance is $26,266.40.
We both technically have the cash to pay off the balances right now, but we are both dealing with secondary housing issues. She’s building a new one, and I’m updating an inherited house. Neither of us is willing to use our cash reserves to pay off the balance right this moment.
Now that my credit card is paid off, I’ve moved that money to an extra interest-only payment on my mortgage, effectively doubling my mortgage payment, which puts my projected payoff date as about the end of next year. Crystal’s aiming for June, so I’ll have to hurry.
We do have tenants lined up for February, and all of the non-expense related rent will go to the mortgage.
I think I can win.
Update:
I forgot to mention the terms of the bet. The loser has to go visit the winner. When I win, Crystal’s going to fly to Minnesota to experience snow.
