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My 2016 Rental Income

July 14, 2017 by Quietly Crushing It 2 Comments

I’ve written in the past about my two rental properties but just now figured out just how much they made in 2016. Since I share my financial life publicly and discuss real estate from time to time I thought it would be interesting to share my cash flow with you, my readers.

To keep it simple I am also not including any deductions related to depreciation or other expenses that are amortized over longer terms. Remember that while 2016 was a great year, it’s the large expenses which can eat significantly into profits.

Before we get started…

If you’re thinking about getting into real estate investing it’s important to realize that I self manage my properties. There are differing opinions on self managing versus hiring a property manager as well as investing locally or across other areas in the US. My strategy is all about running a small, local (if the numbers work), efficient rental business that doesn’t take much of my time to begin with. This starts with buying the right property and goes all the way down to the details like automating rent payments. I am a firm believer that no one can run my rentals as profitably as I can. I am also aware of the argument that self managing is in essence creating a job for yourself as opposed to a true passive investment. I thoroughly enjoy working with my carefully selected tenants and rolling up my sleeves every once and awhile. Miss QCI usually tags along as my sidekick even for the dirty jobs like resetting toilets and cleaning up a backing up sewer line. She even once delivered an eviction notice to my tenants while I watched since we thought they would react more positively to a female (it worked). Fun times!

Like rental income, work ebbs and flows. This year I had no tenant turnover so for the first half of the year my time invested has been extremely low. Take a look at this spreadsheet where I track my expenses, including mileage to my rentals.

Yes this is everything through July of 2017…

Now to the numbers for 2016…

Duplex (3 bed, 2 bath, 1500 sq ft. per side)

Original purchase price: $151,000 with 20% down payment

Rent collected: $21,240

Expenses:

Taxes: 3,902.95
Insurance: $572
Mileage: $386.5 (703 Miles @ $0.55/mile)
Other misc. expenses: $1,684 (a good portion of this was the install of a new garage door opener and flooring, including install)
Interest paid on mortgage: $4,180

2016 Cash Flow = $7843.50 (Rent Collected – Total PITI (Principal, Interest, Taxes, Insurance) payments ($11,326) – Mileage – Other misc. expenses)

Single Family Home (2 bed, 1 bath ~1000 sq ft.)

Original purchase price: $52,500 with 20% down payment (15 year loan)

Rent Collected: $9,000

Expenses:

Taxes: $1,587
Insurance: $356
Mileage: $80 (146 Miles @ $0.55/mile)
Other misc. expenses: $485 ($200 of this was to clear out the sewer line after a backup in the basement during off-hours (overtime))
Interest paid on mortgage: $1571

2016 Cash Flow = $2764 (Rent Collected – Total PITI (Principal, Interest, Taxes, Insurance) payments ($11,326) – Mileage – Other misc. expenses)

For 2016 my total cash flow on the rentals was $10,607.50. Combined, I put down a total of around $40,000 on these properties. If you calculate a return on this investment it is incredibly high, which demonstrates the power of leverage. If you have any questions I’d be happy to answer them in the comments!

The Dehumidifier Experiment – How to Buy a Dehumidifier for the Long Haul

June 18, 2017 by Quietly Crushing It 36 Comments

[Editor’s note: Please see end of post for the latest updates on popular dehumidifiers]

If you live in the midwest and have a basement, a dehumidifier is a must. The downside is that they are expensive, usually costing $200 for the 70-pint version and often don’t last more than a year. The old saying “they don’t make them like they used to” holds true when it comes to dehumidifiers. I still remember the brown one we had growing up and it worked year after year.

My goal for this post is to keep a running log of my latest experiment, figuring out how to optimize a dehumidifier purchase, ensuring that I don’t spend $200 every year. The dehumidifier I currently use I purchased from Amazon with a 3-year warranty (outlined below). First, a few points I’ve found in my research:

No manufacturer makes a consistently long-lasting dehumidifier. Reading the reviews on Amazon is a great way to see just how prone to failure dehumidifiers are.
I haven’t found a company that warranties their dehumidifiers over 1 year, making these virtually disposable machines after 1 summer of use.
Dehumidifiers are heavy to ship, but Amazon still offers competitive pricing compared to my local hardware store.

Dehumidifier #1

In the summer of 2015 I purchased a Soleus Air dehumidifier. It worked great for the first year, but when I went to plug it in for the summer (2016) it wouldn’t pull any air. It was past the one year mark which meant the manufacturer was unwilling to warranty the product. I eventually wrote to the store I purchased it from and received a $40 gift card to my local hardware store from Soleus Air. It was a nice gesture, but keep in mind that these things usually cost around $200.

Dehumidifier #2

Last year I did more extensive research on Amazon and purchased this Frigidaire 70-Pint dehumidifier. I actually was able to purchase it for $185.16 on Jet.com using a 15% off discount code for being a first time customer. The cost is now $229.33 on Amazon which is why I avoided this unit for my current dehumidifier. The reviews were actually quite positive but more importantly I found many reviews citing the positive experience with the Frigidaire warranty. It comes with a 1 year warranty and a 2-5 year warranty. In years 2-5 the consumer must pay for diagnostic, labor and parts which I believe makes the warranty useless after year 1.

When I went to plug it in for the summer of 2017, I received a “F0” error. Knowing I was approaching the 1 year mark I immediately emailed Frigidaire and provided them the information on my unit. They quickly acknowledged it needed to be replaced after a few questions about my setup. After a few weeks I received a voicemail stating they couldn’t find a local dealer for me to receive a replacement and would be sending a letter outlining the steps I should take to receive a gift card in the amount I paid for the unit. As of writing I am just waiting for my gift cards to arrive in the mail.

Dehumidifier #3 (and the extended warranty)

For my current dehumidifier I took a different approach. My goal was find a reasonably priced 70-pint dehumidifier and purchase the extended warranty offered by a third party. This is my first experience with purchasing a warranty plan through a third party on Amazon. For most purchases I avoid any extended warranty, but given the track record of dehumidifiers it is in my opinion money well spent. I purchased this Keystone 70-pint dehumidifier which was $182. On the side of the screen you can see 1-year or 2-year protection plan is offered.

Clicking on the protection link will tell you who is offering the warranty. In my case it was a company called Asurion, but there are other companies that offer this on Amazon. Based on my experience Amazon will offer the third party protection plan on the side through whichever company is offering it at the cheapest price. Digging into Asurion online it appears that they specialize in phone insurance but obviously they have expanded their warranty plans in conjunction with Amazon. Based on my quick research, they appear to be a reputable company and for $20 I thought it was a worthwhile experiment.

Note that if you click Learn More you’ll find that they offer a 3-year warranty which I then added to my cart with the dehumidifier. Protection actually begins after the 1-year manufacturer warranty meaning in theory I should be able to get a replacement if it ever breaks for a total of 4 years after purchase. I searched for “dehumidifier” on the Asurion reviews and found 2 cases where purchasers used the warranty successfully on a dehumidifier purchase which gave me some confidence in testing this out.

So far the dehumidifier continues to function properly so I haven’t had to test out the warranty or Asurion itself just yet. For others looking to buy a dehumidifier with a long warranty this seems like a good option to look into. I’ll continue to update this post on my experience.

Note: This post contains Amazon affiliate links. If you click a link and end up buying a dehumidifier (or any other items), I will receive a commission. Thanks!

Update #1 (7/17/17):

I received my prepaid visa gift card from Frigidaire. Working with their warranty department was painless. The 70 pint Keystone dehumidifier continues to work well.

Update #2 (5/16/18):

It seems as though the Keystone dehumidifiers are no longer shipped and sold by Amazon and there are much cheaper options than those linked above. This hOmeLabs 70 Pint dehumidifier has over 1500 reviews on Amazon. At time of writing the 3 year protection plan is just $6.17. The Frigidaire 70 pint dehumidifier I purchased above and subsequently had issues with remains available albeit at a higher price.

Update #3 (5/24/19):

It appears that the price of the protection plans have increased in price as of late but still provide a good value given how frequent dehumidifiers can breakdown. Besides the h0meLabs dehumidifier linked above there are some other economical options like the 30 and 70 pint variations from Vremi which are priced at $160 and $199 respectively on Amazon. The 4-year protection plan is priced at $29.99 which is cheaper than the protection plans on other dehumidifiers. If you want to stick with a name brand dehumidifier I still think the ones from Frigidaire are still worth checking out although the price point is a bit higher. These Danby dehumidifiers are also reasonably priced currently on Amazon. I still have 1 year left on my warranty for my Keystone dehumidifier and am happy that it continues to work well.

Update #3 (4/11/20):

The best priced options when buying a dehumidifier on Amazon continue to be the ones from Vremi and h0melabs. The 4 year warranties are now around $45 which I think is still a good value. The Frigidaire dehumidifiers seem to be more expensive and it is hit or miss on the Keystone dehumidifiers.

Update #4 (Summer 2020):

This post about dehumidifiers has garnered a lot of attention, even from manufacturers themselves. Meaco, a UK company recently sent me a dehumidifier to test out. I will be reporting on my experience to see how it holds up over time.

Sage Creek Campground Review – Badlands National Park, South Dakota

April 26, 2017 by Quietly Crushing It Leave a Comment

Sage Creek Campground is a primitive campground (no running water, pit toilets) located in the Badlands National Park in South Dakota. It is located on the west end of the park, opposite of the main entrance and visitor center. There are two ways to access the campground, you can either enter the park at the main entrance and drive through the Badlands or continue on Highway 90 and get off at the Wall exit.

Sage Creek Campground via main entrance. Click for larger view.

Sage Creek Campground via North Entrance. Click for larger view.

Note that while there is no fee for camping at Sage Creek Campground (unlike Cedar Pass Campground which charges $22+), you still need to pay to get into the park. We happened to go on the free week which is something to check on if your plans are flexible. You can view rates and fees and free days for the park here. The only place to pay to enter the park is at the main entrance (first route pictured above). Traveling to the Sage Creek Campground via the main entrance is quite a pleasant drive through the Badlands and worth doing on your way to the campground although be prepared for a long stretch of sandy, gravel roads. You’d also be missing out on the true Badlands experience if you only stayed in the Sage Creek area coming in through the back entrance. On the drive through the Badlands Loop State Scenic Byway (main entrance route) there are several lookouts and trails. It is about 40 miles from the main entrance of Badlands National Park to Sage Creek Campground.

What makes Sage Creek Campground unique is that the area looks much different to the traditional Badlands as you get closer to the campground. It is more hilly and grass covered with a creek intertwining the area. The campground itself is a flat, open area with a looping road around the campsites.

The most exciting part of the Sage Creek Campground are the animals. If you’ve never seen prairie dogs (lots of them) or bison up close and personal in their natural habitat you’re in for a treat. We didn’t see these animals towards the main entrance of the park, only as you got closer to the campground. The bison are very large and can be seen most times around the campground grazing. They even like to come into the campground area to eat the grass that grows under the picnic tables and are often by the road as you enter (see pictures and video below). Their hoof prints and massive poop piles can also be found around the campground. The prairie dogs have an area with their holes and it is fun to watch them interact with each other including bowing to one another. Below is a short video I took of a Bison passing through the campground.

There is a creek that runs around the campsite hence the name Sage Creek Campground. There are no marked trails around the campsites, but exploring is easy to do and not get lost since most of the land is open. There are areas of beaten down grass that you can explore around the area. If you venture off further you’ll want a compass or be sure to mark your path. However, marked trails can be found towards the main entrance of the park. We did a few of the short boardwalk hikes (Cliff Shelf, Door, and Fossil Exhibit Trails) as well as the Saddle Pass Trail, which was a somewhat challenging, but short uphill trek. We also walked on the Castle trail which was a nice flat hike offering views of the Badlands and unique features of the area.

The campsites themselves are quite nice although you will not have any privacy. Shaded picnic tables mark the campsites and no open fires are allowed although camp stoves and contained charcoal grills can be used. Campsites are on a first-come, first-serve basis after 4 pm. We explored in late April and it was nearly full on the weekend (it was nice weather), and there were just a handful of people during the week. We were told in summer that the campsite can get quite full. On each end of the campgrounds are pit toilets. There is no running water but these were the nicest pit toilets I’ve ever seen and we imagine they were either built or renovated somewhat recently. You could tell they are cleaned frequently. There was plenty of toilet paper and a garbage in the bathroom. The campsite also has containers for recycling and trash.

Covered Picnic Table – Sage Creek Campground

Given there is no water you’ll want to be sure to bring your own. If you need to fill up water you can do so at the visitors center, but this is approximately 40 miles away so you’ll want to plan accordingly. The visitor center also has nice bathrooms which we used as we were passing through and also topped off our water supply.

I imagine the Badlands can get quite hot in the summer. We were hiking when it was 60 degrees and sunny and it felt very warm. Likewise with the campsite, there is a reason that the picnic tables have awnings to protect from the sun. Sunscreen and hats are a must. Throughout the time we camped we found the area to be generally pretty windy.

I highly recommend the Sage Creek Campground if you are ok with primitive camping. It was amazing to see new animals, especially the Bison passing through the campground and was a highlight of the trip to the Badlands. If you have any questions please feel free to ask them in the comments section below! We are always happy to help fellow travelers when possible.

Paying Individual Income State and Federal Taxes with a Credit Card

April 20, 2017 by Quietly Crushing It Leave a Comment

Since 2014 Miss QCI and I have signed up for 11 credit cards specifically for the purpose of earning the bonus rewards (points) which require a certain amount of spending in a short time period. We’ve used the points for cash back and free travel over the years including our trip to Hawaii. Until recently I wasn’t aware that you could actually pay your taxes owed from filing your taxes with a credit card. I also ran out of checks and am adamant on not getting more which forced me to dig into the possibility.

The most recent card I signed up for was the Starwood Preferred Guest Credit Card from American Express. The bonus is 25,000 points after $3,000 spend in 3 months, but they recently had a promotion offering an additional 10,000 points after spending a total of $5,000 in 6 months. This sweetened the deal and put my over the edge on signing up for this card. Thus I’ve been looking for ways to maximize spending on this card and having to pay in to Uncle Sam gave me the perfect opportunity. (side note: I actually made less as a W2 employee in 2016 but my untaxed income including real estate investments, blog income and dividends all crept higher meaning I had to pay in.)

Before I start, I want to point out that you should absolutely do research on the value of the points earned versus the service fees that are charged for paying your taxes with a credit card. For me it’s all about the signup bonus and for that reason I was happy to pay the service fee.

Paying Federal Income Taxes with a Credit Card

The website for paying federal income taxes with a credit card is https://www.1040paytax.com/, powered by Drake Software, the same company one of my favorite bloggers, The Wealthy Accountant recommends for preparing your taxes. They charge a 1.98% credit card convenience fee which is actually pretty reasonable given that you can get 2% back with the Citi Double Cash credit card (plus you don’t need to waste a stamp!).

You’ll eventually get forwarded to www.payusatax.com and after selecting “Make a Personal Payment” the process is straight forward as you are asked to provide your personal information. I paid $886 in taxes which resulted in $17.54 fee. Not bad!

Paying State Income Taxes with a Credit Card

The process for paying your state income taxes with a credit card may depend on the state you reside in. A simple Google search or asking your tax preparer for the website will help you verify the correct site. However it seems as though some states use the same provider called Official Payments. For Wisconsin the website can be found by navigating through the Wisconsin department of revenue website. It’s a bit tricky to find the online payment via credit card (not via bank account), but I was able to find it digging into the frequently asked questions. Here is a direct link to the Official Payments website where payment can be made. You’ll then want to click on “State Payments”. The image below is what I filled out at the beginning of the process to pay my own taxes.

The fee for paying my state individual income taxes with a credit card was slightly higher than federal at 2.5%. Below is how they determine the service fee:

Official Payments Corporation (OPC) charges the taxpayer a convenience fee of $1.00 for payments less than $40.00 or 2.5% of the payment amount for payments greater than $40.00.

Below is a screenshot from my payment confirmation, but you’ll also receive an email which includes payment information and your confirmation number.

Conclusion

Paying your taxes with a credit card is a great way to meet minimum spending requirements as long as you pay off your credit card in full every month. I plan to do this on a yearly basis provided that I continue to pay in as opposed to receive a refund. I’d love to hear in the comments whether you’ve paid your federal or state individual income taxes via credit card and particularly whether your state uses Official Payments.

Two Ways to Prevent Southwest Rapid Rewards Points From Expiring

March 30, 2017 by Quietly Crushing It Leave a Comment

About a month ago I received the below email from Southwest notifying me that my Southwest Rapid Rewards points would be expiring since there had been no activity in my account in 2 years. The Southwest Rapid Rewards Premier Card by Chase was one of the first credit cards I opened in 2014 as I began exploring the world of signing up for credit cards and cancelling them before the yearly fee hit or in the case of the Southwest card, another yearly fee hit.

These points were used to pay for our airfare to Mexico but clearly we had some left over. 20,000 points is significant amount so I sought out a way to keep my account active (note you’re not able to redeem points for gift cards if you aren’t a Southwest cardholder which is what I attempted to do). The points are worth around $200 in gift cards and probably more if used for a flight.

You can obviously buy miles, but there are other free ways to earn points as well as I share below.

Earning Points with Southwest Rapid Rewards Shopping Partners

This is probably the easiest of the two, and takes very little time or effort. Rapid Rewards partners with major retailers such as Macy’s, Apple, Home Depot, Best Buy, Kohl’s, Walmart, Newegg etc. The full list is on the Southwest Rapid Rewards shopping website. All you need to do in order to earn points is to use the link they provide that takes you over to the retailer’s website. Simply make a purchase and your account will be credited. I personally did this to coincide with a planned purchase of an external hard drive from Newegg. The points were credited to my account almost immediately. Note that each retailer partner offers different point values for every dollar spent. In my case I wasn’t trying to maximize points so I received 1 Rapid Rewards point for every dollar spent.

Earning Rapid Rewards Points with e-Rewards

If you have no need to make a purchase at any of the partner retailers as listed above this is another way to earn free points relatively easily, although it takes more effort. e-Rewards is a survey company where consumers take surveys on any number of topics. Upon completion of the survey, users are rewarded with e-Rewards points that can be redeemed for rewards such as Rapid Rewards points, gift cards, magazines etc.

However you can earn 500 Rapid Rewards Points for just completing one survey if you are brand new to e-Rewards. Once you signup for e-Rewards (make sure you use the link within your Southwest airlines account) you’ll eventually receive an invite to complete a survey. Even if you don’t fully qualify for the survey, meaning that you start a survey and you receive a message that you aren’t the demographic they are looking for, you still can receive the Southwest bonus. You’ll be able to redeem your 500 Southwest points by navigating to the “Rewards” screen within your e-Rewards account. Below is a screenshot of my free redemption.

Preventing Southwest Points From Expiring Wrap Up

These are just two ways to prevent Southwest points from expiring. The points were credited to my account well before my points expired and I now have two years before my points will expire. I’ll likely signup for the Southwest Credit Card again before then and use the miles for a trip or redeem for gift cards.

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