I am 48 single parent of 2 kids, no child support. I have 3 rental properties on acreage I inherited which have been rented to long term renters for past 4 years. No big issues. The main house which is high end, the renter is leaving aug 1. I have lots of my stuff still there in storage in a garage. It is rural property, so snow plowing is needed as well as lawn mowing for about 2 acres weekly. Part of the agreement with the renter who is leaving was to manage the property, deal with the other tenants issues and mow and plow and for a break in the rent. The tractor to plow and ride em mower was left there for the tenant to use. And now he is leaving and I dont know what to do. I live a 10 hr drive away, thus the break in rent in exchange for property management/repairs etc, and that is the way it worked out well for everyone.
I think I can find someone to pay to mow and plow and check on the main house,(still looking for someone) I can pay the hydro to keep the water lines from freezing, which is cutting into my profit so I anticpate I only will clear 200/month. I have increased my mortgage payments 40%, and now with the renter leaving I will also have to go back to original payment amount of 788 biweekly instead of 1135 which I am currently doing. The market is really low, and a jail is being built in this community within the next year or so. I anticipate the prices to go up because of this. My main concern is the lack of care for this nice house, if it is not lived in.
I had a real estate evaluation for the property and it is worth around 975k with a mortgage of 263k left. I am canadian so my 5 term has 2 years left at, 3.99% (dec 2014) with amortization of 25 years, so can renegotiate june of 2014, or take a 3k penalty if I sell. Where i live now, the house is paid for,worth around 470k. no pension savings or anything but no debt other than mortgage either. I pay for the mortgage from my wages as i levered the rental property to pay for my house in the city.
I havent decided if i want to retire to the rental property or what, this is another issue. I lived there for 10 years and was very unhappy, the community was very insular and only if you could trace your roots back a zillion generations, you were perceived as an intruder, like most small towns. The scenery and climate is lovey and wonderful and has a great senior community.
The property is secluded enough that I kept to myself and very small circle of friends. Also before the person died, they asked me never to sell, it was to be for my kids,like a family legacy or something, which further obligates me not to sell, why I do not know.
This is a retirement community and no jobs other than minimum wage, the nearest university is a 2 hr drive and work for myself and prospects for my kids is what enticed me to the big city. my kids dont want to go back and I dont unless i lose my job here or something drastic happens like that. I am very torn and feel guilty for wanting to sell, is it the right time etc..should I keep this house in case I retire there etc..
Any other factors I should consider before i sell or dont sell?
I may have to pay capital gains but my accountant said I may get a loss to carry forward as when I inherited it was worth much more.
Sun May 12, 2013 4:42 am
oldguy Senior Member
Cash: $ 717.80
Joined: 21 May 2006
With my rental houses I am careful not to become a part of the tenant's services - ie, the water is in their name, the electricity is in their name, the gas is in their name, my lease states that they shall be responsible for maintaining the lawn (with their own mower). I, as the landlord, provide and maintain the house. So I would be avoiding the "trade work for rent" agreements.
The rule of landlording - never rent to an acquaintance or a friend, and never ever to a relative, you need a formal arm's length agreement with a stranger.
You have $1,450, 000 of real estate and a $263,000 note, ie about $1,180,000 of equity. And your return is only about $200/m - plus the worry and hassle. As for future use - I never plan on going back to a house years later - instead I convert the olf house to money, invest it where it grows faster than real estate, and then - whereever I want to live later, use the money to buy a new house. (My desires change over the decades, what looked like fun when I was 25 now (age 74) looks like an old shack in the slums, lol.
Personally, I would sell the rentals, refi your home, and put about $1,000,000 of the $1,180,000 to work where it will double in about a decade. Then, at age 60, you can take your $2M and buy whatever you like wherever you like it - and Canada is so beautiful, most anywhere would do - but I like BC.
Sun May 12, 2013 4:06 pm
coaster Senior Advisor
Cash: $ 1626.30
Joined: 11 Oct 2005
quote:Originally posted by oldguy Canada is so beautiful, most anywhere would do
... ummmm ... I think I could name a place I've been where in summer (which lasts from about July 1 to August 15) the black flies are so thick they obscure the view of the scenery.
Sun May 12, 2013 5:51 pm
tracy New Poster
Cash: $ 0.45
Joined: 12 May 2013
Oldguy, thanks for the advice, takes the emotion out of the whole equation!!, love summers that last from march until november in bc with some cold snowy weather to make me appreciate all that heat!!!
Wed May 15, 2013 2:56 am
coaster Senior Advisor
Cash: $ 1626.30
Joined: 11 Oct 2005
One legitimate post had to be removed because it responded to a post made by a member who turned out to be a spammer and had to have all his posts removed; therefore after doing that the response didn't make any sense in the continuity of the thread. Sorry about that.