As I posted here, one of my personal finance goals is to setup automatic bi-weekly transfers to my Freedom Account and my Rental Property account. Today, while sitting on my deck enjoying the beautiful weather, I setup the automatic transfers. Instead of doing bi-weekly transfers, I setup a weekly transfer. For my freedom account, I setup a weekly transfer of $50 for a total of $200/month. For the rental property account, I setup a weekly transfer of $37.50 for a total of $150/month.
Here's what these 2 accounts cover:
Freedom Account:
- Unexpected expenses
- Auto insurance premiums (bi-annually)
- 50% of Umbrella policy premium (50% to be paid out of rental property acct)
- Vacation Fund
- An electronic device every now and again
I plan to add an additional $1000 to this account in December when I get my yearly bonus.
Rental Property Account:
- Unexpected emergencies (maintenance issues)
- Home Maintenance policy (yrly cost of $380)
- Service call fees - $55 per call with Home Maintenance policy
- Landlord Insurance policy premiums
- 50% of Umbrella policy premium
I plan to add an additional $500 to this account in December when I get my yearly bonus.
It feels SO GOOD to have money set aside for those unexpected emergencies.
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You mention you rental property often, but you haven't gone into too much detail about it. Would you mind sharing your thoughs about being a landlord? Are you cash flow positive? What was you intionion of buying a rental property? Any regrets?
Background - I'm in a similar financial position as you and have thought about taking the leap into rental property, but it seems like such a risk. One bad tenant could cripple me.
I enjoy the blog and would appreciate any insight.
thanks,
lowman25
Lowman25 - I will post the answers to your questions soon.