Author Topic: 49 Y Female - Housing Decision Needed  (Read 745 times)

frugalone

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49 Y Female - Housing Decision Needed
« on: September 14, 2018, 07:22:25 AM »
I am a soon to be 50 year old divorced female with two grown children.  I live alone in a condo that I rent for $1370 a month in a safe community.  My question is that I have 14 single family homes that I rent out in a lesser safe community that I lived in for 35 years before moving to where I am now- it is located 45 minutes from here.

 I have no mortgages on any of the property and my gross income is $86,000.00 US.   After business and personal expenses (rent ect) I have $5000 per month left over to start saving.
I should add that after the divorce I had to spend almost all money left over to update and renovation the homes my ex decided to let go into disrepair.   Three years later I am seeing the light at the end.  I will be 50 in November and want to get serious about saving for retirement.   

I have been considering moving into one of my rentals that generates $550 per month in rent.  That would save me $820 in $ per month.  Also I wouldn't have the costs of tenants moving or repair costs to get it ready to rent.  The house is equivalent  in size and is in a decent neighborhood. There a no costs to it other than the taxes of $500 per year and $350 insurance.

I have no savings - all I have are my investment properties that are valued at  $457,000K.   They are B class properties- nothing special. My 2015 Subaru Legacy was paid for in cash.

Pluses I can see in moving:   All my properties are within 3 miles of the rental. I manage all aspects of properties. Would make life easier to manage them and keep eyes on.

Savings of $9840 just in rent saved.  Not to mention the mileage of the round trips (90 miles) to pick up rent and deal with tenant issues.

I will live in my own property and can upgrade as I see fit. No HOA to deal with like where I live now.

Downside: My oldest son who is a Law Enforcement Officer in another state feels it is a bad town and feels safer with me living where I live now.  He said there a lots of druggies etc...  Keep in mind his grandma lives in the same neighborhood.  Also his uncles, aunts ect who are very hard working people.


Thanks for reading and please ask any questions and I will try to answer them as well as I can.

20957

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Re: 49 Y Female - Housing Decision Needed
« Reply #1 on: September 14, 2018, 09:04:18 AM »
Is it hard to find rentals where you live now? Is it hard for you to find tenants in the $550 place? Assuming not, in your shoes, I would definitely move. You can always move back, esp because you wouldn't be breaking a lease. Yes, it would be a royal pain, but worth it if you are really unhappy there. At which point you are no worse off then you are now. But if you end up liking it, then yay! A bunch more money and more convenience too! Your son -doesn't have recent consistent data bc of living out of state -sees the worst of human experience regularly which likely skews his perceptions -does not get to make you responsible for his emotions. I vote give it a go...or at least make the decision to move, and see if you feel super unhappy and start finding other reasons to stay, in which case you just don't want to, and that's fine too.


frugalone

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Re: 49 Y Female - Housing Decision Needed
« Reply #2 on: September 14, 2018, 11:25:50 AM »
Thanks for the well thought out response!

Where I am at the housing market is tighter but being a single person I would be the top choice in most situations for a landlord if I decided to move back.

 No I don't have any issue finding good tenants at the $550.The house has all new windows, flooring and doors. 

Yes, you are right he does deal with a lot of bad situations and is a bit jaded.  Both adult children were raised with the "if you can't afford to pay cash- you can't afford it" so they realize moving is not outside my comfort zone. 

Worst case scenario I would save up the $60k I would put per year in savings now that I can breathe and be able to watch for and purchase a home I really would like to live in with cash.  The condo I live in is valued at $179K but I would never spend that much living alone.  I would more likely buy a $70k house out of town.
« Last Edit: September 14, 2018, 11:31:17 AM by frugalone »

Frankies Girl

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Re: 49 Y Female - Housing Decision Needed
« Reply #3 on: September 14, 2018, 11:30:17 AM »
I don't see any problem with moving into the house you own and seeing how it goes. Your son may be concerned, but he likely isn't as familiar as he thinks he is with the area if he doesn't even live in the same state.

I live in a VERY crime ridden city (suburb just outside) and we hear every day about someone's house or car being broken into in my immediate neighborhood... it is always possible no matter how nice a neighborhood. There is crime everywhere. It is a working class neighborhood and yet the properties here get snapped up within a week or two on the market no matter what because it is overall still pretty nice area.

If you have relatives nearby, have a talk and see what they think about it and anything they suggest to be aware of.

As a LEO, your son could be super helpful for a list of things to do/check to ensure your property and person are as well protected as can be. I'd make sure to have good lighting, maybe get a dog (if you like dogs) for both a deterrent and companion and make sure to check over the property's locks/security. Make your property look unattractive to any kid or druggie that might be looking for an easy place to rob, and they'll avoid it. It's pretty simple.

Always lock up the house even for short errands, don't leave the garage door up unless you're out in there. Lock your car EVERY time it's outside, and never leave ANYTHING valuable in it - whether it is visible or not - because once someone checks the door or busts a window and finds a purse/wallet/laptop - they'll remember to rob you again. And yes, this is a common thing in my neighborhood. I am still stunned at someone leaving guns, wallets and fancy equipment in their cars overnight in a driveway... and some of them even forget to lock their cars!

Bone up on situational awareness - things like paying attention to being followed home from trips out (robbers in my area like to stake out banks or fancy stores and follow their victims home and rob them in their driveway), so keep on moving if you think you were followed and head to a populated area and/or call the police to meet you,  try to always park in your garage when you get home, don't get out of the car until the door is all the way down...


BicycleB

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Re: 49 Y Female - Housing Decision Needed
« Reply #4 on: September 14, 2018, 11:48:03 AM »
I don't know if this is helpful, but consider what saving for retirement means.

If I had $5,000 per month left over after paying my living expenses, I'd be tempted to consider myself retired already. In fact, I'm an early 50s person who has been considering himself retired for a while now, on a much lower income than that. What do you want your life to be like? What income from investments will it take for you to decide that you are financially independent? When you "save for retirement", do you have some new lifestyle you're saving for, or do you just want to make sure that you don't have less money in the future in case the property rents decline?

I think you can arrange your life however you want. Does the $5,000 involve a lot of 45 minute trips due to you actively managing the properties? Are you happy with that? If yes to both, then you're golden; invest the $5k in a stock/bond portfolio just in case, live where you are. If yes to the trips and no you're not happy, have the courage of your convictions and live near your other relatives - if that's what you want.

Did you fix up the properties because that was the obvious next step, or because your personal opinion is that an all-real-estate portfolio is the best way to invest? If the former, do you want a property manager in exchange for a lower income? Is there something you want to do besides manage the properties? You can sell them, or some of them if you just want to cash out and have a more balanced portfolio.

What is this retirement that you are saving for? It sounds to me like that should drive your decisions. Whatever it is, arrange your affairs to achieve it as soon as possible according to your desires. You're in a great position, you can do almost anything now.

Re safety, I can't evaluate the risks of a city that I don't even know, nor the opinion of your relative. But you've proven you can survive divorce and take charge of 14 rentals. You can and should decide for yourself. Research as much as you want, decide on your own time. You are in charge.
« Last Edit: September 14, 2018, 11:55:47 AM by BicycleB »

frugalone

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Re: 49 Y Female - Housing Decision Needed
« Reply #5 on: September 14, 2018, 03:34:54 PM »
Frankie's Girl-  Thank you for all the great tips.  I am pretty savvy as far as safety goes.  Taught both sons how to shoot.  One is a Trooper and the other just left the Marines as a Sgt.  I have had a CCW for 8 years and love to shoot targets at the range with my carry gun.  BUT- I will say you can NEVER be too careful and I will take what you said to heart.

BicycleB-  Thank you for the kinds words.  Yes, I guess I am retired in a way.  I just hate having my eggs in one basket so to speak.
I don't have any savings to speak because I put money in the houses to get them up to my standard.  Guess I didn't do the normal thing most women do - I didn't want the marital house.  It was huge and since we didn't have a mortgage we agreed I would take the rentals and he would get the house.  They both had about the same value.  I believe I made the correct choice since the marital house doesn't generate income and I knew it was too big for me.  I enjoy dealing with the rentals most days since I have been doing it for 26 years.  LOL

I really don't have any lofty goals for retirement as I am pretty frugal and happy with my life.  Maybe visit France?
« Last Edit: September 14, 2018, 03:37:24 PM by frugalone »

BicycleB

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Re: 49 Y Female - Housing Decision Needed
« Reply #6 on: September 14, 2018, 04:18:09 PM »
:)

In your shoes, I'd sell a couple of properties to have a better cushion of cash and stock - keep 10 or 12 properties since they're fun and pride-inducing and profitable. But hey, i'm a lazy dude who like stocks/bonds.

One financial target just to be safe might be to calculate the cost of your lifestyle, and determine how close to supporting it you would be if all the properties were sold. If your current housing cost is $1300/mo, it seems $457k deployed at a 4% rate of return would be too little, because $450,000 at 4% is only $18,000/year (1500/mo).  Maybe you should accumulate some more, so that if you get tired of running the rentals, you have enough to be financially independent anyway. Or perhaps the $457k is a bit conservative, perhaps the valuation from before you fixed them up?...$86k income from that is about 20% return. Regardless, it is heartening to see you have enough wiggle room to live wherever you choose, living the way you want.  The decision of whether you want the extra safety layer and whether you are willing to change dwellings to get it is personal as much as financial, I guess.

Keep us posted!

lhamo

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Re: 49 Y Female - Housing Decision Needed
« Reply #7 on: September 15, 2018, 02:58:02 PM »
It sounds to me like moving back to the community where you have the investment properties makes a lot of sense.  Are you sure the family drama won't revive, though?  If folks on his side have a visible reminder of how well you are doing post-divorce it might lead to a lot of snipey gossip (especially if things have not worked out as well for your ex financially), which can be unpleasant in a small town.

Re:  other investment goals, I would be trying to max out Roth accounts from here on out.  Your investment properties are a good source of reliable monthly income, but maybe not the best from a tax management perspective.  Once you turn 50 you can put 6500/year into Roths.  If you can set up a separate retirement plan under your rental business that might give you the option of converting money to Roths later on, too.