Author Topic: Hand wringing/ opinions welcomed  (Read 3927 times)

anniebelle

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Hand wringing/ opinions welcomed
« on: October 27, 2013, 02:07:36 PM »
Hi everyone

I have a dilemma that is actually quite a nice one, in some respects, because I have the freedom to choose what to do about it. It's the sitting on the fence and not knowing WHAT to do that is driving me batty.

We own a gorgeous home which makes my heart just sing...truly beautiful. Every day when I wake up here I get a wonderful feeling of peace and gratitude for my lot in life.

Downside, it does have a mortgage which I'm not altogether comfortable with. Upside, we have rental properties, some paid off, which more than cover the mortgage here.

Downside, I will probably still need to work 20 hours next year to keep my current comfortable standard of living. Upside, I enjoy my job and the people I work with.

However I keep going round in circles. I think the amount of money tied up in this house is too high, given what I could be using it for. I COULD sell here, use the profit to pay off another of our rentals, and have an income of around $45k per annum from the rental portfolio.

Then I could live in a much smaller home (one that's currently rented), by the beach, with no mortgage, and never have to work again.

So back we come to point A...I LOVE, LOVE, LOVE it here. Argh!!! What to do!!! Live here and work part time or live in a smaller home with no views but by the beach and not work at all?

I know this is incredibly personal in terms of tons of other life factors but I'd truly welcome any thoughts on this - maybe someone has an idea I haven't already thought about.


Daleth

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Re: Hand wringing/ opinions welcomed
« Reply #1 on: October 27, 2013, 02:19:23 PM »
How long is it until the mortgage on this one is paid off? What about the mortgage on the rental that you would pay off? And if I may ask, what are the outstanding amounts? I'm just trying to see if there's a good way to transition into FI without losing this house you love.

anniebelle

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Re: Hand wringing/ opinions welcomed
« Reply #2 on: October 27, 2013, 02:26:18 PM »
Gosh, forever...probably 25 years...at the moment we just make lump sum payments on it monthly. We pay interest only, but this enables us to pay off what we want. Usually we put around $4k a month on it. The mortgage is $365,000. Current value probably around $450k.

The house I'd go and live in (one of our rentals, by the beach) has no mortgage but a weekly incoming rent of $245 - obviously that would stop once we were living in it.

I'm probably being a bit vague - I guess what I'm asking is , do I stop being emotional and do the logical thing that makes more financial sense (get rid of this place and go live mortgage-free) or do I keep being in love with my home...

To which there really is NO right answer, is there :-)
« Last Edit: October 27, 2013, 02:30:34 PM by anniebelle »

bugbaby

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Re: Hand wringing/ opinions welcomed
« Reply #3 on: October 27, 2013, 02:42:24 PM »
Do you have to only work 20hr/wk *next year only* - or for the next 25 (or x) yrs -to retire +/-pay off this mortgage? If just next year why not hang in for another year and get to keep both houses?

Is the sheer joy of waking up in this house (but have to go to work 1/2 day in a job you love) > the joy of waking up in the beach house (and kick back all day)+ pain of losing the beloved house + joy of paying off the rentals with the profit?


anniebelle

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Re: Hand wringing/ opinions welcomed
« Reply #4 on: October 27, 2013, 02:57:04 PM »
Lol, well after writing all this out, I've come up with a genius idea (sort of), which is to sell the beach house, free up $220k, pay it off on this place, keep working anyway because I like it - and have a happy life while the rest of my portfolio (around $2m) grows quietly in the background.

Problem solved!

FinancialIndependenceTime

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Re: Hand wringing/ opinions welcomed
« Reply #5 on: October 27, 2013, 03:21:22 PM »
Quote
Problem solved!

Congrats!

Norrie

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Re: Hand wringing/ opinions welcomed
« Reply #6 on: October 27, 2013, 03:24:28 PM »
Sounds like a great solution. I'd hate to see anyone sell a home that they love that much unless they just could not afford it. I think that it's rare in life to find a place that feels that good.

I'm glad that you had options!

anniebelle

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Re: Hand wringing/ opinions welcomed
« Reply #7 on: October 27, 2013, 04:25:18 PM »
Yes, it's all about balance really. As soon as I walked in to this house I knew it was my forever home (until I get too old to toddle up and down the stairs), the community are awesome (they have a wine appreciation club!) and it's peaceful with amazing views and birdlife, and hills to climb virtually right out my front gate.

I suppose it's just that niggling feeling that having too much capital tied up in a non-income-producing "asset" isn't the most sensible thing to be doing long term. That and the knowledge that I'd never have to work. Again though, work brings me a great deal of enjoyment, most of the time, and also with my hours I work three on/ seven off/ three on...it's a pretty good deal.

Plus, I have another seven houses working for me, providing an income as well as capital gain. I think fear of losing everything plays a big part in this, so I'm getting gripped with this tendency to secure all my assets urgently.

Anyway thanks, writing it all out made it clearer than the fog in my head!

BuzzardsBay

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Re: Hand wringing/ opinions welcomed
« Reply #8 on: October 28, 2013, 07:09:56 AM »
Why don't you just sell a rental and pay off your house?  Without the monthly mortgage payment your monthly expenses will go down and you won't need the income from that rental.

TrulyStashin

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Re: Hand wringing/ opinions welcomed
« Reply #9 on: October 28, 2013, 02:31:39 PM »
Lol, well after writing all this out, I've come up with a genius idea (sort of), which is to sell the beach house, free up $220k, pay it off on this place, keep working anyway because I like it - and have a happy life while the rest of my portfolio (around $2m) grows quietly in the background.

Problem solved!

Great idea.  Owning a beach house in coming years will be a financial nightmare thanks to reforms in flood insurance law that removes the taxpayer subsidy that, until now, kept flood insurance rates artificially low.  Not to mention rising sea levels.

Pay off/ down your current house.  If you feel like having a week at the beach, rent a place.