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XP-House Situation - WWYD?
Hey ladies - I have another question semi-related to my move to NYC.
We own a townhome. With the way the market is here right now, we would lose about $20K off of our purchase price if we tried to sell right now, even though we've put about $15K worth of work into the house. As a result of this, we have been hoping to rent it until the market gets a little bit better. I have 2 options right now for renters, and I don't know what to do. WWYD?
1) Option one is my sister, BIL, and my brand new nephew. They currently live in a 2BR apartment and pay $700/mo. + utilities. They cannot afford more than that right now and I don't know if they will be able to afford more than that in the near future. It is approximately a $400 gap between what they can pay, and what I owe for a monthly mortgage payment. BUT, I know that I can trust them, I know that they won't trash the place, I know that they will pay me on time, and if something needs to be fixed, I can easily handle it from accross the country because I can wire $$ to their account and have them handle the fix. They are ok with this. The only other problem is that they can't get out of their lease until Oct.1, and we are moving July 1. So I would need to find someone to sublease from July-Sept.
2) Option 2 is someone that a very casually know because I am a regular customer where she works. She is very sweet, and people say good things about her, but I really don't know her at all, other than chatting with her at work. She has a boyfriend and a young son that would be moving with her. They can afford to pay the full amount of my mortgage payment, and they can also move in July. I am a little bit more apprehensive about this because it would be more difficult to deal with concerns, and I am worried that if anything ends up going wrong, I am not even in the state to deal with it. They would also be able to pay me a damage deposit, which I would not get from my sister.
I am so torn. On one hand, I kind of feel like I should prioritize family, and it would be nice knowing 100% that I can trust her, but on the other hand it would be SO nice to not have to worry about subleasing, and not having to pay the gap on the mortgage.
So WWYD?
2.3.11: Started TTC
2.8.12:Initial b/w - Normal
3.7.12:HSG - Normal
3.8.12:S/A - Normal
Cycle #12/Month #15 - 50mg.Clomid CD5-CD9 - BFN
4.24.12: RE appointment - DX Unexplained IF
7.12 - 9.12: TTA
10.12 - 1.13: TTC Naturally
February 2013 - IUI #1 w/100 mg Clomid - 5 mil.post-wash: BFFN
March 2013 - IUI #2 w/100 mg Clomid & Trigger - ?? MY BLOG
Re: XP-House Situation - WWYD?
So, here are my questions/thoughts:
-How badly do you need the extra $400 dollars that you won't be getting from your sister? If this isn't going to make or break you than I'd say rent to your sister. I do think that it will be a challenge to find a sublet for only 3 months though!
-Have you considered hiring a management company to deal with renting your place? I know several people who have done this and actually the townhouse my H and I are moving into next month we are renting through a management comapny. They take care of all of the paperwork, they would take care of things when/if something goes wrong and they fully vet and background check every single occupant before they sign the lease. You would never have to deal with anything if repairs were needed, etc. The tenant just calls the management company and theys end someone out to deal with it.
So, to answer your question...I'm not sure what I would do. I think if money were not an issue and I just needed the place to be occupied I'd go with my sister but if I need to cover the mortgage in order to remain financially sound I'd go with the other people.
Good Luck!
These are my thoughts exactly. It really depends on where you are financially, but I would rather have the piece of mind of using a rental management company because they would take care of everything. My H and I were considering a move across the country, and we are in the same situation with our townhome as well. I would not want to deal with the headache of not getting paid on time, having things fixed, security deposit, etc. Most management companies charge the first months rent for the advertising/rental agreement then it's around $100/mo after that. It seems pretty reasonable to me and then you don't have to wonder what's happening with your home back here.
$400 a month is a lot to absorb every month. I think you need to worry about your bottom line. This is a business deal. What happens if your sister tells you they can only afford $600 a month? Or $500? It might happen.
I agree with checking into a management company to help rent your place. I think someone else on here is doing that - sjb, maybe?
When do you move to NYC? I'm kind of jealous - I love New York!
Ok, well it sounds like getting a management company and renting it out to the acquaintence is what might be the best option. I honestly don't think my sister cares either way, but I just need to have a talk with her about it today. I feel a little bit bad, because I talked to her about it first, but I think she also realizes that she can't afford much and is a little nervous about it. I think that I would feel more at ease if I know that a management company is handling payments, arranging repairs, deposits, background checks, etc.
I am planning on moving in July, so now the house projects are in full swing, trying to get this place ready to rent out! So much to do, so little time.
2.3.11: Started TTC
2.8.12:Initial b/w - Normal
3.7.12:HSG - Normal
3.8.12:S/A - Normal
Cycle #12/Month #15 - 50mg.Clomid CD5-CD9 - BFN
4.24.12: RE appointment - DX Unexplained IF
7.12 - 9.12: TTA
10.12 - 1.13: TTC Naturally
February 2013 - IUI #1 w/100 mg Clomid - 5 mil.post-wash: BFFN
March 2013 - IUI #2 w/100 mg Clomid & Trigger - ?? MY BLOG
I agree with the suggestions on using a management company especially since you probably wouldn't be able to lease/sublet it for the three months before your sister could move in. And I wouldn't want to pay $400 more per month either to make up the difference.
I'm so jealous of your move to NYC! Are you going for work or just for the heck of it? Sometimes I wish H and I would have moved somewhere out of state for a few years before buying a house and having a baby.
I have a mgmt company that I am very happy with if you want the information. She takes one months rent per year and does all of the above listed and supplies a tight contract for us to use. She found a renter in 3 days for my house when I moved in with DH. I like her, she's not a huge company, but I've been really happy with her. If you bring a renter to her, the cost is less I believe. We are waiting until the market recovers a bit to sell (and to pay down our principal in the meantime). So we figure this is a couple year fix.
I too like the piece of mind of family, but $400 a month adds up very quickly.Keep track of all your rental expenses as well, as you can write some items off your taxes next year.
Good luck!
We are going for my DH's job.
I am hoping to find a job out there too though. I am actually really excited. It is scary, but it will be an adventure. 
It is something that we have always wanted to do, so I hope that it turns out to be a good decision.
2.3.11: Started TTC
2.8.12:Initial b/w - Normal
3.7.12:HSG - Normal
3.8.12:S/A - Normal
Cycle #12/Month #15 - 50mg.Clomid CD5-CD9 - BFN
4.24.12: RE appointment - DX Unexplained IF
7.12 - 9.12: TTA
10.12 - 1.13: TTC Naturally
February 2013 - IUI #1 w/100 mg Clomid - 5 mil.post-wash: BFFN
March 2013 - IUI #2 w/100 mg Clomid & Trigger - ?? MY BLOG
I would LOVE her contact information!! If you wouldn't mind emailing it to me, my email address is lmslusarczyk at gmail dot com.
Thanks so much!
2.3.11: Started TTC
2.8.12:Initial b/w - Normal
3.7.12:HSG - Normal
3.8.12:S/A - Normal
Cycle #12/Month #15 - 50mg.Clomid CD5-CD9 - BFN
4.24.12: RE appointment - DX Unexplained IF
7.12 - 9.12: TTA
10.12 - 1.13: TTC Naturally
February 2013 - IUI #1 w/100 mg Clomid - 5 mil.post-wash: BFFN
March 2013 - IUI #2 w/100 mg Clomid & Trigger - ?? MY BLOG
It totally depends on if you could afford the $400 gap a month. And I would guess it would be hard to find someone from July-Sept you could trust, so basically no money in that time frame.
I would personally go with the friend. We rent an owned condo. The owner had it posted on Craigslist and was 100% nervous... but now is SO happy we live here, we take care of stuff, we don't call for stupid things and we treat it like we own it. Hopefully you will find someone just as good that you can trust and care about.
If I was the SIL I would understand if you said I just can't take the cut if you could/want to pay the full amount... or slightly under it's yours otherwise I have to give it to someone else.
The big sister, and Momma 30 weeks along with baby sister
Food Blog, Family and Baby Blog
email sent.
Also - you may get to ignore the part about the $1000 conversion fee. I'm not sure if that applies to townhomes.
Good luck!
I would rent to the acquaintance and not your sister, for a lot of reasons.
There's the obvious financial reason ($400 is a lot of money each month).
There's the obvious timing issue (your sister can't move until Oct.)
Most important, I'm not sure it's a great idea to mix business and family.
I recently had a similar situation come up with the condo we rent. Our previous tenant had moved out, and we were in the process of finding a new tenant when my brother & his girlfriend told me that they wanted to move in.
This might sound terrible, but we decided not to rent to my brother. At first, I was hesitant to rent to them because I didn't think our place made sense to them as far as location (they both work at least 20 miles away from the condo), or size (they have my nephews living with them on the weekends, so it would be pretty tight). Plus they both smoke and they have 3 cats, one who is old and isn't great about using the litter box, so I was worried about the nasty smells that I would have to try to get out when they moved on. On top of all that, my brother doesn't have a history of being very responsible or stable, and I didn't trust that he would always be good about paying rent on time, etc. I just didn't think it was a good situation to get involved in ... what if they trash the place? It's one thing to be mad at a random tenant, but it's another thing to be mad at family. Or, what if something unexpected comes up and they can't pay rent? I hope I never have to evict anyone (knocking on wood), but it would be absolutely horrible to have to deal with that kind of a situation when it's your family. I never want to choose between providing free housing for my brother and taking a hit to my own finances or evicting him so I can get a paying tenant into the condo. It just seemed so much better to keep family and business separate.
Then, the more I thought about it, it wasn't so much that it was my irresponsible and unstable brother that wanted to rent from me, it's that someone I know wanted to rent from me. I don't think I'd want to rent to any friend or relative, it just seems too risky to mix business with friends/family. It's a recipe for hurt feelings.
It sounds like your sister is a lot more stable and responsible than my brother, but just think about what would happen if they end up accidentally damaging something in your house that costs a lot of money to fix. Things happen, even to responsible people. Do you want to risk having a family fight over the rental house?
Mr. Sammy Dog