Expecting the Unexpected

Last week was an expensive week at the duplex we rent out. On Sunday night, one of our tenants called to let us know that the AC had been out all weekend in their unit. And by the way, the washer had stopped working a few weeks ago, too. (How can college guys go a couple of weeks without needing a washer? Wait… I don’t want to know the answer.) Not wanting to be slumlords, Mr. PoP reminded the college kid to let us know ASAP when stuff like this happens so we can take care of it.

First thing Monday, an AC repair guy checked out the unit. The verdict, a $900 part would fix it (for now), but the rest of the unit was pretty old, and he wouldn’t trust it for long. The recommendation, $3,500 for a new AC condenser and handler, installed. We trust this AC guy having used them several times before, but still got a second opinion. Exactly the same – $3,500 is the going rate. On the plus side, they could do it the very next day. Good for our tenants as it’s definitely getting to be summer, and days and nights without AC are pretty rough in Florida.

While we were disappointed that the part that brought the system down was $900, we weren’t really shocked, either. Last summer, we had both of the AC units at the duplex fully serviced, and any cheap components were replaced brand new, so the only parts left to break were expensive ones. Not wanting to throw good money after bad, we went for the complete system replacement.

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That done, Mr. PoP checked out the washer, and determined that it was having electrical problems. When trying to fix similar problems in the matching dryer about a year ago, Mr. PoP was zapped with 220 volts of electricity, and never was able to fix the problem. Not eager to repeat the same experience, and again, not surprised since the matching dryer died a year before, we decided to replace the washer with a new one. $430 at Home Depot did the trick. A new washer was delivered to the unit a few days later.

The total cost for the week at the duplex – about $3,930. Ouch.

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But that’s what emergency funds are for, right? As a general rule, we try to keep at east $25K in easily accessible, no interest cost money available. The way our calculations go, we could maintain our current lifestyle for over 6 months without cutting back or putting anything on credit even if ALL sources of income were stopped. No jobs, no duplex rent, no picking up pennies off the street.

In addition to our cash buffer, we also keep about $15K in (slightly) lower interest credit cards that are for emergency use only. These aren’t the cards that we use for every day rewards. They stay stashed in the safe, and haven’t had a charge on them in years. But, they boost our credit scores, and if things really go to hell, are an option. I’m pretty sure we’d start liquidating assets before living on credit cards for any extended period of time, but luckily we haven’t had to test that hypothesis yet.

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Paying the credit card bill after the action it saw is going to cause me to grimace a bit. But on the bright side, we “earned” $52 n rewards cash by putting the charges onto a rewards card and paying it off before any interest could accumulate. Plus, the AC and appliances on that half of the duplex should be good for a while now.

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Knock on wood that the same holds true for the AC on the other half of the duplex.

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What do you keep in emergency funds available? What kind of events have popped up that have caused you to use some/all of them?

5 comments to Expecting the Unexpected

  • […] From Used Appliances – Bisque Is A Color? I recently wrote about how we replaced the washer in one of our duplex units – and in that post, I mentioned that the matching dryer unit had […]

  • […] to get it rentable, and since then we’ve put another $5K or so into it. (Most of that was the AC system that died a few months ago.) When it’s fully rented, it throws off $1,500 in rental income per month. […]

  • […] stash, the HELOC would be a very nice safety net in case we have something big come up (like the duplex’s other AC unit) that we need to […]

  • Heidi

    Hi,
    I know that this is a rather old post from last summer, however I just found your blog (and LOVE kitty PoP). I am a grad school student who just bought my first place last summer, have fixed it up and rent out part to a roommate. The best deal in appliances I have found is Best Buy’s open box sales- they are a percentage off of the “new in box” item- so if the NIB item is 30%, the open box is 25% off of the 30% (or more) – and Best Buy Warranties run off the price you pay for the item. For instance my $800 tv had no box, so I paid $200, plus $50 for the 4 yr warranty (vs ~$1000 for the same tv new with warranty). And for washers and fridges the BB warranty covers damaged food/clothes- my new BB freezer went out for 2 days and I pay $0 for service and get up to $200 back for replacing the food that went bad.