Hi MMM Forum,
I'm a new reader but have started from the first post and am up through Dec 2013 already (although I admit to not reading through the comments yet - maybe once I catchup to real time). My family enjoys a pretty frugal lifestyle, but certainly not at the levels of MMM or probably many of you. We do a pretty good job on saving money and investing as well as not spending much more than we need, athough do enjoy some nice luxuries. We are in our mid thirties with 3 boys (6, 4, 1.5) and despite the $31k/year we are paying in daycare costs, we are still able to more or less max out 401k's, add to a Roth IRA and put some money into savings as well as College savings plans for our boys and additional Mutual Funds.
We own both of our cars (2013 Nissan Quest mini-van, 2003 Toyota Corolla) and our only debt is my wife's $9k balance on our student loans and the remaining mortgage on our house ($338k) as well as our mortgage on our rental property in Fairfax, VA (a suburb of Washington DC).
We bought our condo in Fairfax in 2006 right at the peak for $383k, put $50k down and refinanced in 2009 for $305k at 4.875%. Our remaining balance on the mortgage is around $275k and when we moved down South to Virginia Beach we decided to rent out our condo rather than sell to see if we could wait out the market. We are taking a loss though each month and I need to decide if it's best to sell and just be off with this bad investment or continue renting out and try to pay down the mortgage?
Here are our stats:
Mortgage: $1910/month
Condo Fees: $360/month
Insurance: $20/month
Appliance Home Warranty: $42/month
Additional Fixes: $100-200/month
So generally our costs are between $2400-2500/month. We charge $2000/month, so are paying out 400-500/month, although around $500 or so goes towards principal each month, so I've been justifying it as a "wash" each month and a future investment if we can pay down the principal and over time we are collecting more than we pay. Other reason's why we've justified keeping it is if we ever move back to the area (which could be realistic in 15-20 years) or if one of our kids eventually moved to the area (also a very realistic scenario) and we wanted them to be caretaker for a while.
So am I making a mistake by holding onto this place or should we try to wait it out? If we sold now we might be able to sell for $320-330k, and maybe would net $20k after fees.
What are your thoughts?
Thanks,
Footie