When "it" happens

Question

Pam R. · Answer

Sorry for your bad luck. I think there are a whole lot of people who sympathize.

Just the other day I was just looking over my records from the last 4 years of being a landlord. For years 2 and 3 we spent about $100 on very minor repairs. This year - a bed bug extermination wiped out 2 months net receipts at one property. But in the long run, even in only 4 years and now with 2 properties, we're getting ahead, and have a nice nest egg built up for both big and small repairs. In fact, starting this month, I started rolling all the rent collection into the mortgage payment for one of the properties, to get it paid off in about 7 years, rather than 30.

So I'm agreeing with @Justin B. - take the loss for now, you'll make up for it sooner than you think.

I also agree with @Edward Burns on the heat pump. I am no HVAC expert, but I would definitely wait for this arctic freeze to pass before I go replacing anything. But them a couple of space heaters to buy yourself a few days to evaluate the situation.

Best of luck!

Edward Burns · Answer

I do not know where the duplex is located but Heat Pumps do not work well when outside temperatures are in the 30's or lower and with most of the country under an artic freeze I would not jump to conclusions based on his statement.  You should have a back-up heating system where heat pumps are used in the northern part of the country.

Mike Webb · Answer

@Matthew Paul , I plan on considering all options. They are running off of the electric heat/emergency heat right now. Michael Seeker , I have not seen it yet. However, the tank kept running and overflowed out of the top of it. The water stopped once the water to the toilet was shut off. Therefore, I am fairly certain it is a $5 fix with the tank and not a frozen pipe issue. Of course the way this day is going...who knows.

Matthew Paul · Answer

Just remember the "emergency heat is pure resistance electric heat . It is very expensive to run .  Your heat pump blows "cold air "  as it gets colder the heat pump is working harder the air coming out wont be that warm .

Chris K. · Answer

Thanks. I was actually trying to figure out why my heat pump was just blowing cold air. Good to know about the emergency switch

Michael Seeker · Answer

I've recently replaced 2 heat pumps and 4 grand seems pretty reasonable.  You might want to shop around on craigslist - my last one was closer to 3K, but could have been smaller size.

Are you positive the water leak was from the toilet and not a frozen/leaky supply line?  If it was just a toilet leak, that's a fairly minor deal.  If leaking supply line...you could have some big, hidden problems on your hands.

Matthew Paul · Answer

Tell the tenant to move the switch over 1 notch on the thermostat , that will engage the "emergency heat " on a heat pump , which is basicaly an electric heater . It will warm up pretty good . They wont like the electric bill but they will be warm

Justin B. · Answer

Sorry to hear that Mike.  It is what it is (as they say).  I purchased my first SFR in April 2010.  In August 2010 (yes, just 4 months after we bought it), the air conditioner went out and had to be completely replaced.  It was in MS so no air conditioning = house is a furnace.  We had to credit her rent while she couldn't live there.  All in all, it cost us $5k and we were only cash flowing $100/month so that wiped out profit for years.  Now, 3+ years later, it's cash flowing $300+/month (thanks to rental increases) and we're profitable again.  In fact, we're re-financing it and pulling out enough to cover what we put down on it + the air conditioning repairs so technically we're operating on infinite returns now.  It doesn't take long for the silver lining to shine through in real estate.  I'd say get it fixed, deal with the loss, and move on to the next property.  Our next 4 SFR's have had 0 problems at that level.

When "it" happens

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