After all the creative wrangling and trying to come up with different solutions to keep our budget on track with the new house, I'm starting to think of going back to our original idea: kick out the upper tenants, move in, and carry both mortgages until we sell.
The last straw was that last night, the seller's agent and I were going back and forth about how to get the rent to me. He also mentioned that the rental license was up at the end of this month and would need to be renewed if we planned to keep renting, and that it would need a change of ownership application and inspection. $500-plus, all told.
OK. I was willing to swallow that. But then I thought, wait, do we get the inspection for the upper unit, and then what happens when we kick out those kids and start renting the lower unit officially to our friends? Another inspection/application/set of fees?
Coupled with the strain of living in a staged home, and the stress of knowing we aren't fulfilling our FHA obligation until we move into the new place, it felt like too much.
So I talked to AS and then NT about just kicking the renters out ASAP and moving in. What would it mean?
Cons:
- Monthly expenses would increase by $2000. This would mean we'd have to cut our spending money in half, not do Roth makeup contributions this year, and cut back on other discretionary spending (what little we have left, carshare and groceries basically).
- This plan would depend on AS getting enough freelance to equal her take-home pay from her old job through December. After that she wouldn't have to, but we would have virtually no fun money until she did.
- The UK savings would need to come back into play as our actual emergency fund, because we wouldn't have that small budget surplus that I'd managed to keep throughout this. Any UK money we took out would need to be replaced by June of next year so the UK reno could happen and the UK flat could stay rentable.
- Any necessary home repairs, medical emergencies or other unavoidable expenses would need to come out of the UK EF, or else get put on a 0% credit card and paid off next year.
Pros:
- Not having to live in the staged condo; much less fretting about every little bit of clutter and dust and whether our finishes would get messed up.
- Not having to worry about what the tenants are doing to our unit.
- Not having to mess around with living with our friends, or renting a short-lease apartment, when the condo sells.
- Fulfilling the HOA mortgage commitment.
- Being in our new place!
I am still working out the money details to see if I really am comfortable enough with the plan and confident that we could get through to next year that way. I'm not sure where we'll end up on this whole thing.
Or maybe the simplest path is the best
August 6th, 2014 at 03:54 pm
August 6th, 2014 at 05:38 pm 1407346707
August 6th, 2014 at 08:17 pm 1407356267
Too close for comfort for me, but if you need a rental license for your friends it would likely include or cover current tenants upstairs? Thus the fee and process would need to be done either way.
August 6th, 2014 at 10:04 pm 1407362653
I do think I need to do it either way, for having our friends rent. I'm just wondering if they can inspect and approve both units if only one is going to be rented at a time. Because the lower unit is our official address until we kick the upper tenants out; after that it'll be the upper unit that's our official address and the lower unit will be rented out.
My friend is going to help me look into it. That's why I thought it would be easier to only get the lower unit approved, and kick the upper unit tenants out. (The seller's agent said it probably wouldn't be a big deal to do one month unlicensed if we were letting them go at the end of September).
August 7th, 2014 at 01:42 am 1407375758
DH and I would have a hard time making that decision. I wish you luck!
August 7th, 2014 at 02:53 am 1407379998
August 8th, 2014 at 10:43 am 1407494592
August 8th, 2014 at 05:29 pm 1407518982
bluesfemme, that's ... not something I'd thought of. I forgot there were private student loans where you don't have to go through the FAFSA process! NT has now applied for a loan; we'll see if we can get it in time to pay tuition (due Sept. 15).
Thanks so much for the suggestion! Deferring payment on that tuition really loosens the budget up. The tuition amount can serve as a de facto emergency fund in case anything unexpected comes up.