Tuesday, June 29, 2010

Mortgage Progress For June

I wish I had better news. My renter is late with the rent again. That means I made the extra payment with my portion only, $636. My cushion is gone and $300 has spilled in to the month of December. I was afraid of that. June has been crossed off but I have to add December to the end of my plan which means I still have 6 months to go. Doesn't feel like I've made much progress.

Now I have to decide whether I want to continue to give my renter a chance to find full time work or if I should tell her to leave. She has an interview on Thursday. I told her I would wait and see for a little bit longer. She promised to pay me all of the rent just as soon as she got a full time job or another part time job. I know she would but she already owes me a lot of money and she was living paycheck to paycheck before her hours got cut. I don't see any money in her future until her next tax return and that's a long way off.

If she does leave, I will have to put some money in to the house, perhaps as much as $4,000 for new flooring. The carpet is a disaster. I think I would replace it with tile.

So, my new mortgage total is $17,777. Not as low as it should be but still going down and that's what I like to see.


The Executioner said...

I would be thrilled if my mortgage balance was under $20K. In the grand scheme of things you are very close to the end of your goal. Hang in there.

Dot said...

That's a tough call with your tenet. If you tell them to move you will never see anymore money and have a huge expense of time and money to re-rent the house. The next tenets my be no different.Maybe make her pay something every week so at least you still have a small stream of rent and add the late fee every month to their balance. Good fiends of mine own about 10 rental houses in a so-so neighborhood and they constantly have tenets that always fall behind, and then get caught up in January with their huge tax returns, then repeat the cycle again the next year. It seems to be a pattern with most of the low income renters they have.
When we moved in Jan 2008 we turned our previous home into a rental instead of selling it. The first 24 months we had a perfect tenet. The one we have now is leading me to believe I may be in your situation before long.I have my fingers crossed for both of us!
To change the subject..
Over the Cubicle Wall: I notice you still comment here..I miss your blog. Are you going to continue with it?

Dot said...

Oops, I forgot one thing.
You have made great progress with your plan, sometimes the last few months of mortgage payments are the same as the last 10 pounds you are trying to loose.It seems like they will never disappear! Just stay focused, you are almost there!!

Dave said...

Ugh, more bad news from your shaky tenant. As I mentioned in another post, the unsteadiness of this income flow is a good reason to make sure you have an extra cushion of cash reserves should you end up paying off the mortgage, quitting your job, or both.

I like Dot's idea of trying to get part of the rent during the month. How about using a weekly payment as a negotiating tactic but being willing to accept biweekly payments as a fallback?

As far as your mortgage paydown goes, at least you have most of your monthly mortgage payment going to principal. I don't know the interest rate of your mortgage, but even if it is 8% then your monthly interest will be about $120, leaving the rest of your $780 (wasn't that what you wrote in another thread?) monthly payment going to principal (you have posted $636 in your monthly progress report so I am assuming that is your regular progress).

And as you know, there will be a snowball effect as you pay off more and more principal.

Anonymous said...

Hope for the best but plan for the worst. What is the rental market like around you? I would begin looking for new tenants next week and consider short term cheap fixes for the floor/carpeting. You've given your renter a lot of breaks from what I understand so let her know that you simply can't afford to let her live their indefinitely while she looks for a job and that if she can't come up with at least a partial payment within a few business days you will need her to vacate.

Miss France said...

As a small landlord myself was able to leave the 9 to 5 because of rental income nine years ago, I see this a learning opportunity for you to ensure that this income stream is a long lasting one. Don't let non-paying tenants burn you out. Your plan is so brilliant and is crucial to your success in leaving your job, don't let people who don't pay (er, lie to you to live in your nice house) stay. You can just let her out of her lease. There's always conciliation court, and if you think you won't be able collect later, why let her dig a bigger hole now?

FWIW, lots of landlords like Home Depot Allure flooring. Attractive, very durable, reasonably priced, and DIYers can install it.

Miss France said...

I need to add, like anonymous said, collect what you can now, of course.

And many landlords LOVE HD allure. It comes in hardwood and tile patterns. Great stuff.