The Money Mustache Community
Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: DollarBill on October 27, 2014, 01:12:28 PM
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Got a case study for you! Let me know if I left anything out. Thanks!
About the property:
Single family, 5 bed, 3 bath, 2.5 garage.
Market Value: $185K (House built in 2006)
Original Purchase price: $158.5K (Bought in 2009)
Mortgage Amount: Paid off
Taxes and Insurance: $70 Insurance, $333 Taxes (The specials will be paid after 2019 dropping taxes to $230)
HOA costs: None as of now. I was told when I bought that the HOA will start when the development is 80% done but have never heard anything since.
Possible rent: $1200-1400
Plan A (Stay): I just retired from the AF and my pension covers all of my living expense and about $500-700 spending cash.
Pro's: It's a real nice area, cheap living and good job market (Not really looking but been offered a few).
Con's: it's Kansas! Sorry fellow Kansans but I would like to be near some mountains or beaches.
Plan B (Sell): My original plan was to sell the house and find an area I like better. If/when the house sells the AF will move house hold items and will store my stuff for up to a year (Cost is covered). I would use this time to slow travel and decide where I want to live. It's the first time I've ever had a choice where I want to live (Scary and exciting).
Pro's: Free and clear to go anywhere. Most likely frees up about $170K to invest/buy a smaller house.
Con's: $15K Commission fees (How is this legal?)
Plan C (Rent it): Possible rent income $1200-1400. Renting it out scares me, I'm risk averse. I rented out a townhouse before and lost about $20K (I'll do another thread and post a link to the story).
Pro's: Good income $797-$997 but would still need to find a new place to live.
Con's: I would need to rely on this rent income to pay mortgage or rent at a new residents. I have about $50K saved to invest or use toward a new house. Ties to Kansas and don't plan on staying, possible damage, property manager.
What would you do? Any ideas for a plan D?
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Renting it out scares me, I'm risk averse.
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I would need to rely on this rent income to pay mortgage or rent at a new residents.
Sounds like you shouldn't rent it out. I vote you start with A, then B when you eventually move.
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Sell it, then wander around and find somewhere you love.
$170k isn't going to go very far near mountains or beaches, in general, though.
-W
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I think you guys are right.
Sounds like you shouldn't rent it out. I vote you start with A, then B when you eventually move.
I'm going to wait until I receive my retirement check to figure everything out. If I decide to get another job then I would feel good about renting it out.
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My husband is active duty navy. Our plan for early retirement upon is retirement from the navy is based on our cash flow from our rental houses. Navy pension is a bonus but our reliance is from our rentals. While be a landlord can certainly have it's moments so does the stock market or tons of other investment options. Honestly the importance is making sure your happy and comfortable with your investment.