Although it is nice to have your family's imput, this decision is between you and your husband. Keep talking to him about it and work it out together! I really have no opinion about whether you should keep or sell the house. Good luck!
My parents have rental properties, so I would say your ability to make this work depends very much in your ability to find quality tenants. Get the wrong people in there and they may destroy the house, get behind on the bills and need to be evicted, get pets and destroy all the flooring, or they may be awesome.
Tenants will never be as careful as the owners at keeping house and protecting the house since they don't own it. Unless they pay all utilities, those bills may go up if the new tenants like to keep the heat up or take long baths daily, etc.
Just some things to think about!
It's you and your DH's house, not your family's! By family I assume you mean your parents...I think that once you're married your husband is your main family and the one who should be considered when it comes to big decisions, especially ones like this that affect him financially and your parents not at all. If you work in real estate it seems like you'd actually be the best judge of what would be the right decision here, but as far as the positive income from rent goes...what about the positive income from selling the house?
DH and I had a similar dilemma a few months ago, and like your husband we decided the stress of renting it, being a landlord (so doing repairs, renter's insurance, etc.), just wasn't worth it and we'd rather sell and get some money from it now.
Ditto to PPs who said its a decision for you and your husband to make.
Also, if you sell now and invest the money you will get some return on it - rent isn't the only way to get income there. It will probably be less than rent, but you also won't be paying for upkeep on the home through maintence and repairs.
I'd also consider who you plan on making any needed repairs? Do it yourself or expect your husband to do it? I know in my relationship, it would probably fall onto SO so I'd feel like it would be unfair for me to say I'm ok with the extra stress because it would really be his thing to stress about.
@ddsfam: Keep it! Not sure about the tax laws in your locality but in Australia you get tax breaks for owning an investment property. If you don't want to deal with the tenants yourself, get yourself a property manager. Most real estate agents will have a property management business unit.
Something to consider is the housing market where you are. Do you think you could sell it for more if you waited a while, or is the market at the peak right now?
Personally, I wouldn't want to deal with being a landlord, but that's just me.
The reason i dont want to sell right now is because the housing market will goes up most likely in a few years but i dont want to deal with the repairs and tenant issues. Since our kids are only 5 and 2 years old,my spouse is the one will be doing all the hard work on the house and hes already stressing with his job. My mom sold her house with just a little bit of profit and she regretted about selling it until today. That was 10 yrs ago and my mom doesnt want me to be like her. My husband doesnt care much about money as long as we are happy with no stress. This is basically my first home and with the help of my family,we were able to get this place. My husband forclosed his home when i met him and he never made good decisions until he met me i have always been his guidence ever since. He doesnt plan for the future. I usually listen to my family more than him. We both argue everytime we talk about my plan keeping this house and we havnt reach to any agreement yet. Hes still pressuring me about selling it..seriously...i dont want to be a landlord but still want to keep this place. If i hire management company,they charge alot and i will not be making any profit..
@CoCoCourtney: my hubby will be handing the repairs and stuffs. That is why he wants me sell it...
@ddsfam: If he is the one who will be taking care of the house, and he doesn't want to deal with it you're probably just better off selling it then. Forcing someone into a business they aren't interested in probably isn't going to go well.
If it's something that is important to you, you need to take care of it and/or hire other people to help you out (even a friend who can do the repairs).
That's up to you. If you rent, you have to think about the property taxes that you will have to pay and any costs for repairs or replacements. Is it really worth the hassle? What if something costs more than $500 to replace in that month?
Does $500 a month cover property taxes, school taxes, money set aside for repairs, overhead costs - that may leave you with very little in your pocket. May not be worth it.
..and no offense but "I usually listen to my family more than him." That's not good in a marriage....jmo
We are in a similar situation. I'd sell our house in a heartbeat if we could break even or make anything off of it. Unfortunately, we aren't in that position so we have to rent it out. Being a land lord is a headache. It can be reduced if you hire a property management company to take care of it, but that's obviously extra cost and there's always the risk you might have difficulty finding a tenant. I'd only rent if you are able to pay 2 mortgages every month.
@jmaze: I agree, that is a terrible setup for a marriage. And it's not fair of you to make a decision he doesn't approve of that is going to cause a ton more work for HIM, not you. If you came up with another plan for getting the repairs done, maybe he'd agree - but how much are the repairs, and any other landord expenses that come up, going to cost? Still worth it after all that?
If it were me and I felt this way about my husband's financial decision making, I'd have him and I meet with a financial planner so that we could go over some options and get us on the same page. Because putting his opinions below your family's can easily lead to serious problems, let's not forget that financial issues and communication breakdown are both in like the top 3 reasons people end up divorced. I'd be worrying about how to get to a place where you two can have a reasonable discussion and communicate to make these decisions together and reach a point where you both feel okay about it.
Am I understanding that this is your house? Is his name on the deed at all? How much time/effort/money has he put into it? I ask because if this was the house you owned before you got married then if you sell it the money becomes marital property in most states (check your local laws). I know we don't like to talk about divorce around here, but trust me, you never really know someone until you divorce them. If something were to happen then he would then be entitled to half. It doesn't sound like he's made the best decisions in the past if his own house has been foreclosed on.
As far as convincing him of this, I would say look into hiring a property manager if it's not prohibitively expensive. A property manager would be in charge of finding tenents, doing repairs, collecting rent, etc. They typically work for a percentage of rent every month.
My FH has a house and is planning to sell it. He will not consider renting it. He has seen what other landlords have gone through and he simply does not want the hassle.
If you were willing to do all the work- repairs, updates, and checking in on tenants, maintaining occupancy, etc, then I'd say you have some valid points. But you want to give your husband a lot more work. That's not fair at all.
House prices are slowly but surely getting higher but not by any huge amount and not consistently across the country. There's also no guarentee that there isn't another mini housing bubble and crash. Instead you could invest the value of the home in investments and a hefty nest egg.
Having tenants can be pure hell. Every time you get a new tenant you have to repaint, re-carpet, change all loclks, etc. Tenants are a lot more rough with appliances (fridge, microwave, dishwasher, dryer, washing machine, water heater, AC, HVAC) which will wear out. Also, depending on your state's laws, eviction processes can be horrific, especially if the tenant is section 8, disabled, etc. There are horror cases all over the country of tenants who havent paid rent in months and the landlord is fighting to evict them while the tenants intentionally sabotage the plumbing and electrical while the eviction process takes place.
I would sell the first house. Being a landlord is a PITA.
"If i sell my first house, i'll have extra 80k to 100k but i don't really need that $$"
Are you kidding? Who does NOT need $80-100k extra? Put that money away in a CD or in a retirement vehicle and watch it grow baby grow! It'll grow probably way more than the house appreciation rate and then all the cost that go into a second home and upkeep (new roof, furnace, etc). It's far more profitable to put that money into savings and then do nothing else with it!
Based on the $4,000/mo your hubby makes and the minimum of $30k a year that you make that's $78k/year at a minimum for a combined (I'm assuming take home) salary. That sounds like plenty to live on.
"My mom sold her house with just a little bit of profit and she regretted about selling it until today. That was 10 yrs ago and my mom doesnt want me to be like her."
Well you said your house will profit 80-100K and I'm assuming you have a good idea being in the real estate industry. Then right there, you are nothing like your mom. And the house you have is not her old house from 10 years ago. Parents can give advice, but if they are trying to fix their past mistakes/regrets through thier children's current decisions then that's not wise!
Is there any part of you that kind of wants a "safety net" aka a house of your own to revert to just in case? Very honest question.
@Sugaree: I bought this house with my savings and my family kind of loaned me some $ but i paid back everything already and my family helped me fixed it also but my husband fixed it too. He pays mortgage and the house is just under my name and my sister because he had forclosure record and i didn't want any creditors come after him. The reason i had my sister is because if anything every happens(knocks on the woods) i trust my family eventhough my husband is a good person so far but who knows about the future. My family and i are very close and we always try to guide each other since we were born. MY sister was like a mother to us even now to my kids. plus shes herself is a selfmade millionaire so i don't have to worry about money issues with her. Its always been my way of doing things most of the time because me and SO agree that my ideas make more sense than his..One of the reason my husband wants me to sell is because he feels like my sister and family is overshadowing in our lives and he doesnt feel like a man in making our own decision..My fam is always been there for me all my life.
I feel like selling this house more now than keeping it...It will just be better to have a peace of mind than dealing with 500$ or may be even way less of a profit..
@sienna76: yea..One reason was that..Thats how i have been feeling..Its my security for our kids and us...
@sienna76: extra 80k to 100k is not profit..Including down payment of 25% and only 35kprofit plus i put 25k to remodle the house so its like not much profit..
@sienna76: Put that money away in a CD or in a retirement vehicle and watch it grow baby grow! It'll grow probably way more than the house appreciation rate and then all the cost that go into a second home and upkeep (new roof, furnace, etc). It's far more profitable to put that money into savings and then do nothing else with it!
I wouldn't be so quick to say that. With a net 500/month profit on the house after expenses, that's 6k/year, on top of paying that homes mortgage (i think you said it has a mortgage), which mean you're adding equity that you can tap into also when you sell. Then on top of that, if the market picks up, there's even more room for growth. Even if you sold and walked away with 100k, that's at worse 6% growth in a CD or investment, and unless you're willing to gamble in stocks and bonds, I dont think you can safely get 6% in any type of investment. A savings account at best these days yields 1%. Having money in a house in itself is a 'retirement vehicle', you can sell at any point... imo that point should be when it 's no longer give you a positive cash flow or if you can guarentee that cash flow elsewhere.
Positive $500/month cash flow? I would rent it out. And eventually sell it when the market is back up. That is our plan at least, if we can ever find a rental. We are looking for a rental where we can just break even at the end of the year and make a profit when we eventually sell! With the high property tax rates and HOA fees around here in Southern California it's not as easy as it sounds! So I would definitely keep the house and rent it out!
@ddsfam: I'm a little confused! What would you profit (cash in your pocket, not theorectical) if you sold your 1st house?
I owned my own house when I got engaged with my H. I thought of renting it out for a year "just in case" something happened in the year long engagemetn period. Part of me wanted it "just in case" and the other part siad I had to go full force into this marriage with no "what ifs." I struggled with it for a loooooong time (a whole YEAR) - sell or rent. I would not have made a monthly profit from rentals, but I did from selling. (Now I'm debt free.)
I think it's great that people want to protect themselves should something happen. It could also be a small tell tale sign that the relationship may have some issues? You did say you don't trust his money decisions. Are there other things that give you some long term doubts?
I'd also get a quote from a property management place to see what it would cost to have someone take care of the rental/maintenance. Your H doesn't want to do it, so I would not count on him as part of the equation.
I would have to say sell it. It sounds like your husband isn't comfortable keeping it. And I think that you are loking at it all wrong. You are looking at it as a guarenteed income of $500/m. But it won't always be like that. You won't always have someone renting it out. Plus you are responsible for everything. If it needs a new roof then it comes out of your pocket. If the foundation is cracked (I only say this because I am renting and right now our foundation is cracked but we can't get it fixed until summer), then you are responsible for it.
You will have to maintain 2 homes. And if you husband isn't a mr. fix it then you would most definiltely have to hire on contractor which will cost extra money. And if your husband is really good at fixing everything, then he will be stuck fixing everything in 2 seperate homes. Which would make him extrememly overworked since he does have a full time job.
Renting out a home takes on alot of responsibilty. I think you need to stop thinking about the extra $500 a month and start doing some research on what renting out a house actually entails. You might change your mind on wanting to be a landlord.
Also you say that your husband really wants to sell the house but your family really does. Sorry to say, but it is yours and your husband's money and you decide as a couple how to spend it. This is alot of money you are talking about. And you shouldn't force your husband into something that he really isn't comfortable doing.
My grandfather had several rental properties and they can be a huge amount of work and stress. And I think it's unfair to expect your hubby to deal with tenants and repairs and not listen to him when he tells you he doesn't want to do that and he would prefer to sell. I think you should either be willing to take on the responsibility or take your guy's opinion to heart. And there are a lot of responsibilities: finding renters, checking them out, getting their rent, making repairs, and potentially harassing them for rent/evicting them. Rental property can be a great investment and if you think you could handle it then it might be a ggood idea, but I just want to be sure you know what you're getting into.
@ddsfam: I understand being close to your family and trusting them - but your allegance ultimately should be to your husband and he needs to feel support from you. You noted that he feels like your family is too overbearing and it's likely because you go to them for advice vs. them. Again, it's fantastic that they are so wonderful! You have a lifetime of history with them and they will always be a rock you can turn to - but, now that you are married, you need to start creating that bond/trust/support with your husband.
Is an option to sell the house to someone in your family? That way, the investment could still be with the family and might be an easier transition for you?
@oracle: no..all of my siblings has their own houses and i also don't want to sell it to my family members. I'd rather sell it to somebody I don't know..My mom wants to take over but my mom already has her own house and she even needs help taking care of it and how can she have another property...
@winterbride1593: This @Wonderstruck: and this.
@ddsfam: It's not any of your family's business whether you keep or sell the house. Renting out can be a ton of stress, or you could get lucky and have great tenants. That $500 a month really isn't extra income when you factor in maintenance and repairs that you would be required to have completed asap.
This is a decision that should be determined by you and your husband, if he's not up for the required work and effort that goes into the rental house, and then it's not fair to force this burden on him. And yes, it can very quickly become a burden.
After we moved to another state, I began renting my house in Texas. I'm not even there to do repairs and maintenance, and so far so good. I've visited a few times, and the house is in immaculate condition. I've had one thing break (the garage door opener motor) since I've been gone, and I just called around a few places, found the cheapest price, paid over the phone, and had the repairment go and install a new one.
So, it's doable. I found my rentors on Craigslist, which some people would also warn you against. But I've used it in the past to rent a condo I used to own (never had a problem) and I used it this time and it's working.
I AM extremely careful about who I rent to. I do not allow pets, of any kind, at all. I purposely avoid people with kids. I typically rent to unmarried singles, who have degrees and professional jobs. That's just my own bias---but I've rented (in my condo and now my house) to 7 different people over a period of 3 years, and I haven't had a bad apple yet.
I've had people give ME a bottle of wine after renting, I had one girl hire a professional cleaning crew when she moved out (they made it look brand new in there), and my current girls weeded the entire backyard and pruned the rose bushes without me even asking!
So for me...I say rent. Unless your house is old (mind is pretty new) things will break only very rarely. Two years of owning my house and the garage door opener is the only major thing to break, and that just cost me $300 to fix.
I think sometimes that the only people who get rich here are the landlords. DEF keep the house. The tax code is written to protect landlords, so you'll probably make a good deal more than $500 a month. You can write off SO much.
We're currently saving for our second home (my condo is paid off) and we plan to rent it out. It can be my "income" if I become a SAHM etc. And where I live houses and condos still sell within 3 weeks if we need the cash desperately.
@BookGirrl: mine was built in 1956..but it does has a big yard..8000sf and i have a big gopher been destroying my yard and tress also...I tried to put it for rent on the craigslist but most families are with bunch of kids because my house is right infront of elementary school. I called managemnt property and they will lowered my rent to onl 1250$which is easier to rent it to anybody but i can get up to 1650$/month.I think its mostly depends on your luck finding good renters...I didnt find the right one in the past thats y i stopped and keep living here..May be i should try one more time before i actually decidie to sell...
@BuffaloDots: I won't get any tax breaks because my interest payment is very low...So i didnt get anything in the past related to this house.
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OK bees..Heres my situation..
We recently owned a home where we are staying with our 2 lil boys and a hubby. We are in the process of getting another house besides this one. My husband wants to sell the 1st house because he said he doesn't want to stress with the renters and any kind of issues that can occurs later in the future and also if something happens to his job or when we don't have the renters, he doesn't want to worries about the mortgage. I don't work but i do real estates and investments on the side which i bring home 30k to 40k approximately yearly after taxes but thats not the gurantee income. We have been living on his income and he brings home 4g a month. My family wants me to keep the house and rent it out which will give me 500$a month positive cash flows after all the expenses. We also have ok savings for another house.Lets just say over 6 figures of savings. If i sell my first house, i'll have extra 80k to 100k but i don't really need that $$ but it will be nice knowing that i dont really need to worry about money for raining days and we will be stress free. If i keep the house, its future potential investment and i will have a lilttle bit of positive cash flows monthly and i can pass it on to my kids. Hubby is been pressuring me to sell and my family is against selling it.
So..here is my question..
Should i sell it or keep it? Is it going to worth 500$ amonth thats going to come with stress?
please ...help me out...