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Some of you have some seriously complicated financial goals. My turn! Goals for 2016 Figure out how finances work with a new baby (Just found out wife is pregnant) Get good renters into new rental home Pay off credit card balance Save $10k for emergency fund (more than half way there already) Pay off wife's car Purchase a second rental house Figure out how finances work with a new baby!
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Dec 16, 2015 16:02
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| # ¿ Apr 29, 2024 16:15 |
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Nail Rat posted:Why are you buying a second rental home with a very low emergency fund total, several debts, and a new baby that hasn't yet been budgeted for? Bad answer: Because I'm bad with money and have no concept of financial responsibility. Good answer: I didn't include it in my post but the list is in order of priority. Buying a second rental home is pretty low on the list and won't happen until the other things are squared away. And to answer the possible follow-up question, we had an emergency fund of $8,000 and growing every month then had an emergency while in the process of purchasing our first rental property. Would have been absolutely screwed if we hadn't had the emergency fund we did but I'd like to get it back on track again in 2016.
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Dec 16, 2015 17:48
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moana posted:Congrats and good luck with figuring out the baby thing (like pig slut lisa said, it's a good way to gently caress up your finances!) I like keeping a big cash fund in case the market tanks and you get a great deal on a second rental. But yeah, other than that happening, don't mess up your life even more by adding in too many stressors! Thanks for the well wishes. We're both really excited and really terrified about starting a family in our mid-30's but mostly excited. The rental(s) are part of a long term plan to try and transition away from our jobs and try to live a bit more independently. I have a well paying job that requires I travel way more than I'd like (especially with a kid on the way). What I'd really like to do, if I can get the boss to approve it, is to purchase an RV and just drive everywhere while building up a little group of rental homes. Even if I kept the job at least we could be together, travelling around the SW desert, which would be amazing. One thing at a time though. Have to get this rental squared away then we can figure out step two.
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Dec 16, 2015 23:27
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moana posted:welp, look who's getting started early with her new year goals Welcome to the party, pal! Now we can commiserate on how preparing for a drunk midget to invade our home is completely destroying our other financial goals together! (we just bought a recliner yesterday. Fuuuuuck) ((it was with cash out of the baby fund. Leave me alone)) (((it was $650 that we could have used to pay down the credit card. Baby is going to have a lot of explaining to do on why it's so financially inept before it even gets here))) TouchyMcFeely fucked around with this message at 04:28 on Jan 4, 2016 |
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Jan 3, 2016 13:58
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I know you mentioned not wanting to keep the house as a rental but did you consider using a property management company so you don't need to deal with operating it yourself? Depending on what you pay on the mortgage vs what rentals in that market go for you could do pretty well without a ton of effort.
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Jan 4, 2016 04:40
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slap me silly posted:Although, extra time is more likely to get spent on musicianship hobbies than income-producing activities Nothing wrong with that at all. A lot of financial driven people minimize the importance of play time and the impact it has on mental health. There's nothing wrong with selling your house and walking away from the hassle and responsibilities of ownership. For a great number of people, the idea of buying a house is no longer a necessity of life. My position is more that real estate ownership is a get rich slow process. Anyone who has owned property for more than a few years has started down that path whether they realized it or not. Time plays such an important role when it comes to real estate that walking away could potentially cost them quite a bit of money further down the line. One thing to think about is that what you would put into a rental is not necessarily what you would be into a owner/occupier house. The roof is obviously very important but something like the water heater doesn't need to be the biggest, nicest one out there. Get a decent middle of the road one and pay a handyman to install it. Kitchen is outdated? Go get premade counter tops from Ikea or your local home repair store. Cabinets still functional but outdated? Paint them white or grey. It's surprising how far that little effort goes. Washer and dryer going out? Pay a repair company to come out and fix them, replace them with used units off Craigslist, or you can even remove them, offer washer and dryer hookups and if the tenants want you to provide a washer and dryer tack an extra $50 on the lease and have them pay for you to provide them. That said, there's nothing wrong with selling and getting out. It certainly isn't something that you would want to walk into waffling on whether you wanted to do it or not. Also keep in mind that I'm the guy who started the Landlording thread and just recently purchased his first rental home so take anything I say with a grain of salt.
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Jan 4, 2016 20:07
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| # ¿ Apr 29, 2024 16:15 |
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It's nearly the end of the year so before I forget, let's see how we did! Goals for 2016 Figure out how finances work with a new baby (Just found out wife is pregnant) - Nailed it! We managed to pay cash for the delivery so no new debt from having baby (thank god). Get good renters into new rental home - Nailed it! We landed a great young couple that have paid on time, every month for the last 9 months. They've only called on two occasions. Once when the lovely wooden fence fell down and again when the basement flooded. Pay off credit card balance - Miss! Money that would have been used to pay off credit card went to paying for baby. We did manage to knock out a decent chunk even with medical expenses but we still have a balance. Save $10k for emergency fund (more than half way there already) - No progress made here. Still where we were. Pay off wife's car - Miss! We decided to trade in the wife's sedan for a more expensive SUV. Got an OK price on it but we still owe more on it than we would have if we had kept the sedan. Reality is that the sedan would not have worked with our growing family and since the wife is now a stay at home mom, the decrease in fuel efficiency is actually offset by the fact that she doesn't commute anymore. Purchase a second rental house - Nailed it! Second rental purchased in Aug and new tenant placed in Sept. Cash flows ~$300 a month after expenses. This along with 1st rental adds just under $700 a month in additional income. Figure out how finances work with a new baby! - Still figuring this out. There's a weird push and pull of what kind of baby stuff is actually useful/needed vs. overpriced crap. Unfortunately figuring out the difference usually doesn't happen until after the money is spent. That said, baby is awesome. Final Summary: It was a year of ups and downs. While we made progress in our long term investing by purchasing additional rental property, we took on additional consumer debt through the purchase of a more expensive vehicle. However, we were able to avoid taking on further debt by hording cash in anticipation of baby medical expenses. All in all, it was a good year.
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Dec 3, 2016 22:42
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