Author Topic: Going back to school  (Read 1546 times)

cwide

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Going back to school
« on: July 07, 2016, 10:31:42 PM »
I'll try to make this as concise as possible.

I'm a 29 year old single guy who has not made the best financial/career decisions. I current have a decent but not great paying IT job. When I received a raise last year I made the mistake of buying a 2 BR house. I knew at the time I didn't want to do IT for much longer but I figured I would make it work. Anyway, fast forward to now and I am planning on going back to school for software engineering as I am totally done with the IT support field.  I plan on being a full-time student taking classes during normal times and working as much as possible outside of class hours, but I am already looking at ~$15/hr unless I get lucky.

I am kind of past the point in my life where having a random roommate sounds like fun. I also don't like the idea of home ownership and the responsibilities attached while I would be financially less stable.

So I have a few options:

1. Suck it up and find a roommate. The only REAL problem I have with this is if I get a few flakey roommates in a row or have something serious go wrong with the house (AC unit, roof, plumbing issues) I would be in serious financial trouble.

2. Sell my house and rent a cheap apartment while in school. I am 99% positive I could sell my house for at least a small profit. I also live in the midwest so finding a cheap 1 BR apartment isn't too hard.

Both options save me about the same in monthly costs assuming nothing goes wrong with option #1.

What do you guys think?

Choices

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Re: Going back to school
« Reply #1 on: July 07, 2016, 11:17:06 PM »
Kudos to you for going back to school AND planning ahead here.

Either option is okay, but being a homeowner and landlord also requires more time for maintenance and cleaning than a smaller apartment would.
How have you done with roommates in the past? Are you pretty easygoing? Will you need quiet and space to study or will you rarely be home with both school and work?
Where will you want to live after school? If your house isn't your long-term home, then there's less incentive to stay in it now.


Classical_Liberal

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Re: Going back to school
« Reply #2 on: July 08, 2016, 02:31:14 AM »
Congrats on going back to school to be happier!

The whole situation depends on the numbers.  Can you rent the whole house and cashflow?  Then get yourself an apartment to live in?  Todays low fixed interest rates offer a huge leverage advantage to long term real estate ownership and I'd hate to see someone lose out on that opportunity.  At the same time, this:
The only REAL problem I have with this is if I get a few flakey roommates in a row or have something serious go wrong with the house (AC unit, roof, plumbing issues) I would be in serious financial trouble.

would concern me.  I think that anyone who doesn't have a large enough financial cushion to cover just a few thousand dollars of repairs or lost rent should not be in the business of owning a home for investment or occupancy.   If it's really gonna be that tight & you can cash out a small profit, I'd do it no matter the rental situation.

cwide

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Re: Going back to school
« Reply #3 on: July 08, 2016, 07:41:03 AM »
Kudos to you for going back to school AND planning ahead here.

Either option is okay, but being a homeowner and landlord also requires more time for maintenance and cleaning than a smaller apartment would.
How have you done with roommates in the past? Are you pretty easygoing? Will you need quiet and space to study or will you rarely be home with both school and work?
Where will you want to live after school? If your house isn't your long-term home, then there's less incentive to stay in it now.

Thanks for the response.

I have had roommates up until buying this house. I have really enjoyed having my own place as my most recent roommate experiences were not great. I have also always had friends as roommates so I am nervous about being a home owner with a random craigslist roommate. 

My plan would be to live in a cheap apartment until I find a decent job post graduation and can save money for a down payment again.  My house right now is definitely not a good long-term solution.

Congrats on going back to school to be happier!

The whole situation depends on the numbers.  Can you rent the whole house and cashflow?  Then get yourself an apartment to live in?  Todays low fixed interest rates offer a huge leverage advantage to long term real estate ownership and I'd hate to see someone lose out on that opportunity.  At the same time, this:
The only REAL problem I have with this is if I get a few flakey roommates in a row or have something serious go wrong with the house (AC unit, roof, plumbing issues) I would be in serious financial trouble.

would concern me.  I think that anyone who doesn't have a large enough financial cushion to cover just a few thousand dollars of repairs or lost rent should not be in the business of owning a home for investment or occupancy.   If it's really gonna be that tight & you can cash out a small profit, I'd do it no matter the rental situation.

I could rent out my place and it would easily cover my mortgage. I first thought about doing that, but everyone I talked to said it wasn't a great idea. I also am not a huge fan of it because of my financial situation. Like you said, it's going to be tight and I probably couldn't handle having a vacant house for a few months while also paying for my cheap apartment.

DrF

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Re: Going back to school
« Reply #4 on: July 08, 2016, 10:08:39 AM »
graduate and professional students (medical, pharmacy, vet, PhD, students) are always looking for a nice cheap place to rent. Target one of those types because they will surely be putting in lots of hours into their future profession. Also, likely to have less problems as these people are self selecting to be successful people.

Choices

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Re: Going back to school
« Reply #5 on: July 08, 2016, 03:46:55 PM »
graduate and professional students (medical, pharmacy, vet, PhD, students) are always looking for a nice cheap place to rent. Target one of those types because they will surely be putting in lots of hours into their future profession. Also, likely to have less problems as these people are self selecting to be successful people.
This works great in theory, but (from experience) they too can be lazy, entitled slobs and at least in the later years of their schooling they'll have very odd hours with overnight shifts. It doesn't rule them out, but screen carefully and go with your gut or ask for references.