My plans are also affected by my rental house. So far I have been receiving rent every month but I haven't heard if the current tenant will renew their lease or not. If my rental house is vacant for a while I won't have $1,000 a month to save.
Assuming that I am still getting paid rent and that my parents are still living here and helping me with the house expenses, I have approximately $1,000 a month to use as I see fit. There are 3 major directions that I could go.
1. Pay down the mortgage. $500 extra a month would mean I would pay off my mortgage in 8 1/2 years. $1,000 extra a month would mean I would get rid of the mortgage in 5 years. Since the interest rate is only 4.5%, I am not in a hurry to pay it off although it is quite fun and motivating to see the balance decrease so rapidly each month when I am paying off as much as I can.
2. Fix up the house. I could easily spend $40k on fixing up this house. I probably wouldn't get the money back out of it when I sell it but it would make living here more comfortable.
Air conditioning $6k
Turning carport in to garage $5k
Kitchen remodel $10k
Screen in porch $5k
Roof and wood trim maintenance/replacement $5k
Masterbath remodel $5K
The purchase price was $91k so with $39k in improvements the house should be worth $130k. That's not too bad for this neighborhood but it wouldn't sell for that much in this market. Any improvements would really be for me and my parents so if my parents are planning to move then I don't think this plan would be on the top of my priorities. Maybe a few of the items but not $39k worth of improvements.
3. Improve my property. There are $51k worth of improvements that I would like to do to my property.
Build a garage $23k
Add a block wall $10k
Improve electical service $10k
Add plumbing $5k
Add gutters $3k
I'm guessing at some of those prices. I could also add just a concrete pad, RV hook up and block wall fence and rent it out to someone with an RV. I estimate that would only cost me $15k. I hate to see my property just sitting there and getting run down. If I am not moving back there any time soon, at least I should get rid of the old mobile home, sell my RV and either tear down or fix the existing gargage.
So those are my priorities. I need to pick something to save for otherwise I will spend all of my extra money on toys for the dogs like this dog backpack that I just bought. I get the feeling my foster dog doesn't appreciate it.
Coudl I confuse the situation further by suggestion you & parents build, togther or separately, on the land and all live there? and rent out this property along with your other one?
I think the first things you need to figure out is which place you want to live in, and which place your parents will want to live in. For your parents, it might not be either place - might they want to live someplace else? This will greatly influence your decision as to what you can sell, and that (along with where you end up living) will influence the kinds of improvements you choose to make.
But if I had to choose one home improvement you should make no matter what, I think it is the A/C now that you have 3 people living there along with all the dogs.
The rental property is trickier because ou don't have control over that cash inflow and it can end at any time.
I am in a similar situation - my parents will live with me for the next two years. There are a number of improvements that I'd like to make to the house, if I'm going to stay in it, but at the end of these coming two years, I might want to be rid of this house. Or I might want to further postpone the improvements and get closer to a paid-off mortgage. A lot is up in the air, and I just don't know how I'll feel about it in 2014.
I've decided to stack up cash as if I'm going to make those improvements in two years (about $50k for a small kitchen reno and an outdoor living space with pergolas, fireplace, water features...ahhh...)
So in place of a specific housing goal, I'm making my goal the cash amount (so I don't spend it all on gardening supplies, yarn, trips, and going out) and then in two years, I'll make my decision and have the cash to act.
Since you can't decide which option to save for now, maybe pick the most costly and make your goal the cash pile.
Lizzie, I ruled out that plan in the beginning because of the bumpy road and lack of hospitals, doctors, grocery stores, etc...out there. Maybe someday there will be some useful services out there.
Dave, right now the parents want to rent something on the other side of town. I should know a year from now because my nephew will be starting high school and the school they want him to attend will direct their house choice. I guess I should save for the AC and then just save cash for the next unknown step.
Lee, I love your outdoor ideas. I would love to do that too but, like you, want to be around to enjoy it when it's done. Sure would be nice though to have an oasis in the backyard.
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