Post # 1
- Wedding: May 2014 - alder manor
Just looking for some opinions………
We closed on our house January 2013, and have been living there since. It needs a ton of work, which is going to cost a fortune. To save money we are considering renting it out for a few years, and moving into his parents finished basement. It’s a great space, updated with full kitchen, two bedrooms, full bath, dining area, living space. It would be very comfortable for us, with enough space for us if we were to have a baby there as well. My sister in law actually was living in the apartment with triplets until she bought her own house last summer.
We spoke to a realtor, who said we could actually rent it out for more than our monthy mortgage, so not only would we have no mortgage, we also have the potential to earn a few extra hundred dollars a month.
I just feel like we’re moving backwards not forwards. My head is telling me yes move, save save save, my heart wants for us to stay in our home. I’m pretty sure we would have privacy at his parents, I’m not worried about that.
Should we just bite the bullet and move to his parents?
Post # 2
Merlin29: Can you do the work in pieces? If the house is rentable now…then that make it sound like you could live there and work around the areas you live in?
Post # 3
We did something similar so I’ll share our experience and hopefully it will help a bit!
Last August, after almost 2 years of TTC, I was pregnant, but had a MC at 7 weeks. After grieving for a bit, DH and I decided it was time for a major change. We decided to rent our home out, and in the meantime, move in with my MIL. She only charged us $400 a month, just to cover utilities and to help her with her mortgage. Our thoughts were, we would have someone else pay our mortgage (and make extra!) while we decided what we wanted to do – some options were traveling for 6 months to a year, moving back to the city and living downtown, or moving to another city. MIL works out of town, so she’s only home 10 days a month so that really helped with having our privacy as well. It was a great way for us to relax a bit and figure out what we wanted in life. After 8 months we decided to sell the house that was being rented out, and between the renters paying off some of the mortgage and how much the market inflated in those few months, we made an extra 60,000. So for us it worked out well, both financially, and with living with MIL.
Post # 4
- Wedding: May 2014 - alder manor
HeyJude72: That was our original plan, but since our wedding this past May, we’ve started to focus on what we want to do with the house, and started putting together a budget. We just can’t afford our dream home on our current income. Saving our monthly mortgage of $2k per month, with the potential of making an extra $300 per month on top of that……….. thats an easy $27k per year savings, without even breaking a sweat.
Head is saying yes!!!!!! Heart is saying no!
Post # 5
Merlin29: It’s such a personal decision, you gotta do what works for you!
Our house needed some work, nothing major or super-expensive but several projects in the few hundred dollar range each. So we’re just doing them one at a time…we’ve been here a year and is our house perfect? Nope, but we don’t care and we don’t care what anyone else thinks..it’s fun to see reactions from friends/family as the house progresses over time. We are well within our budget and not stressing ourselves or our time to make things happen. One of my BFF’s is coming up on her second year in their house and they are way over what they thought they’d be time and budget wise. You’ve gotta find what works for you!
Post # 6
Merlin29: While it *sounds* like it might be better financially to move back in with your H’s parents, I’m not convinced it would be.
First, have you ever been landlods before? Because it’s not just as simple as letting people live there and collecting their money. If something breaks in the house, you are still going to have to deal with it and pay for it. What about bad tenants who do further damage to the house or forget to pay rent. You’ll have to deal with that stuff too.
And if the house *does* need a lot of work, you might find yourself having to put in more money than you want and sooner than you want because your tenants will refuse to live with/without something. You might be ok with going to the laundramat for a few months until you can afford a new washer, but your tenants might not be – especially if washer/dryer is included in the rental agreement. Or you might not mind going a summer without AC, but your tenants might feel differently.
So sure, you might be able to make/save some extra money. But you have to be sure that it’s worth the headache of being a landlord. If I were you, I’d probably find other ways to save money and stay in the house. You don’t have to update everything right away – it usually takes time.
Post # 7
Merlin29: how long have you been a homeowner and have you rented as a landlord before?
You’re still going to have to pay property taxes and insurance, as well as timely maintenance as a landlord. given the numbers you’ve provided, you’ll still save a lot of money.
Post # 8
I think you will be happier staying in your home. Everyone has a bunch of changes they want to make on their home to make it their dream home, and they all cost money. While it might be tempting to make $300 a month by renting it, renters will never treat your house as nicely as you will, and you will be stuck fixing that on top of the updates you want to make. Small mantance that you could do if you lived there will not get done. Even just cleaning that you would do won’t get done.
Also, even with seperate space, living in a house with someone else tends to have privacy issues just inherit in them. It may seem small, but when they are bored, they live close enough to walk downstairs and knock on the door. Saying “No, you can’t come over” is a lot harder when it’s just down stairs.
We have found with our home over time that we are alot more do-it-yourself than we thought we were. Since we live there, we can see something we would like to change, and then decide that we are going to do it over the weekend. You wouldn’t have that option renting it out.
Post # 9
I would not and I absolutley would not have a child while I was living with my in laws to save money. I would not risk having a stress of livining with my ILS on my relationship or my relationship with them unless it were a dire situation.
Post # 10
Will the house be liveable while under renovation? In other words, if the renovations are going to take quite some time and money, could this “few years” turn into many years (a few years renting it out to make the $ needed, then a few more years while it is being renovated)?
I’m assuming you can’t renovate it while renting it out, or otherwise you would stay in the house. If you would do this, I would set a strict deadline for completing the most urgent renovations so you can move back into your house.
Post # 11
It sounds like a no-brainer to me. It’s a temporary set-up, likely just for a year or two, and it gives you the opportunity to save a TON of money. If your in-laws have offered this space up and are happy with the arrangement, I think it would be a very responsible move to make. Now, you’d need to consider all factors and talk out the details first (Will you pay anything to your in-laws to help with bills? What are the renters like in your area – are you likely to find responsible renters, or do you need to budget for repairs after they move out? What time-table do you have in mind for moving back to your house/how long will you need to save for your renovations?), but assuming you get all that worked out before-hand, I would do it if I were in your shoes.
Post # 12
- Wedding: December 2014 - Norton Country Club
I would have to know a little more to vote well, particularly about the financial issues with becoming a landlord. Sorry that this is long. I don’t mean for it to seem like I’m bombarding you, but I’ve dealt with these questions when considering renting and I know some of them were surprises to me… You might already have thought of all of this, but just didn’t mention it.
Have you looked at the cost of insurance as a landlord vs living in the property yourself (liability can be much higher as a landlord and usually is NOT allowed to be rolled into escrowed mortgages)? Will you pay a management company or handle the rental on your own (may be worthwhile if your house is quite a distance from your in-laws)? Would you list the property with a realtor (% of monthly rent goes to them usually) or find renters on your own? Will you do a background/credit check on potential renters (fees to cover this)? Some states allow you to charge an application fee to cover this, but some states won’t allow the check at all. How will it affect your tax bracket (landlords are typically taxed higher)? Will you have an attorney draw up the lease? What are the laws in your area regarding rentals- some towns/states require a landlord to pay the water bill, the trash bill, or ambulance fees?
Are you in a financial position to pay for any repairs that may be required? Renters may not care for your home like you would and repairs on HVAC units, flooring, and pipes are often necessary. Are you in a position to pay for the legal fees for eviction if it becomes necessary? On paper, it’s easy to say that you’ll have a renter who pays on time every month, but if they lose a job or just don’t pay, you’ll still have that mortgage payment in your name to affect your credit score. My grandfather was a landlord of 60+ properties for nearly 45 years and his rule of thumb was that you must be able to let every rental home sit empty for 6 months if necessary without it affecting your credit; sometimes it’s hard to find a renter, sometimes a renter will not answer evictions, sometimes the rent you want is just too high. He also told me that part of every security deposit he got went into a 1 year Certificate of Deposit fund to gain interest while it sat. If the renter moved out early or failed to return the property in an acceptable condition, it could be renewed many years in a row. If the renter deserved it back, he would still have made some interest from the money at the end of the year. I thought that was a very solid plan.
Post # 13
I would move in with them. It sounds like its own little house in itself (kitchen, bathroom, living space) so you probably wouldnt even spend that much time with his parents. But that said its a very personal decision and it all depends how well you get on with them, and what will be best for your family.
If you do decide to move in with them, make sure you figure out how bills etc will be paid between you all and I would even establish some ground rules on how often to see his parents and spend time with them. Perhaps you could spend one or two evenings a week with them (eating together from their kitchen etc) and make sure the rest of the time is yours. As a PP said, its alot harder to claim your busy to spend the evening alone when they are knocking on the door.
Post # 14
- Wedding: May 2014 - alder manor
HeyJude72: Tinatiny1: RunsWithBears: Misswhowedding: ieatunicorns: LadyBear: SadieBee:
My husband owns two other properties that he bought before he met me, which we rent out. So we have experience in being Landlords, and are familiar with all of the responsibilities and headaches that they bring. Both properties we would be happy to sell, but the market just isn’t there at the moment.
If we continue to live there, the reno could last forever! Doing room by room as we save the cash, but if we save $30k every year for the next 3 years (lets say) , thats $90k that could be put into the house straight away. Plus at that time, we would have enough equity in the house to take out an equity line of credit for the reno if needed. We could do the entire house in one sweep.
Post # 15
- Wedding: May 2014 - alder manor
KateA17: wvlefty: Thank you everyone for your advise! Sometimes it sucks to be a grown up!