I was lucky enough to buy my own place while I worked as a nurse. I will be returning for anesthesia school this fall. I need your expert advice. Should I move in with my parents or just get 2 rommates? My mortgage is $1570 per month plus utilities. I could completely rent out my house and probably get 1500.00. There is also 132.00 Maintenence fee. If I get roommates I can ask for $450.00 each plus sharing utilities. That would leave me with $670.00 plus 1/3 utilities per month. I also have a car payment $390.00, insurance 200.00
and other expenses. If I moved in with my parents I would have to pay for storage space for my furniture ( or I could sell it). My parents do live closer to the university and clinical sites, I am currently 30 mins away. I am hoping to possibly work out a contract with a local anesthesia group. Tuition will be 52,000. I will also need money for living expenses. I have about 10,000 in the bank right now and will be doubling that by the time school starts. Any advice from past or present students would be greatly appreciated. I've been waiting for this moment for a long time and really want to do the right thing.
Just my 2¢ but if your house has appreciated 30% since you bought it I would sell the crap out of it and let it pay your way through school and not have the headache of renters. You have no way of knowing what they will do to your house and your paying money out of pocket for it to be maintained and that doesn't even begin to cover the cost of damages that even seemingly "nice" tenants can do to your house. My father managed 6 rental housed and when he decided after 4 years to move into one of them it cost him over $10,000 just to get it back to livable again. It's really a headache you don't need. On another front, you are taking the headache and risk of trying to rent a house you only have one year of equity in and if a tenant really messes your place up you could easily lose money trying to unload it. Don't believe for a second that you'll ever collect damages against a tenant even if you get them awarded in court. Lastly, Alan Greenspan and others have already said that there is an unsustainable bubble in housing prices right now because of the lowest long term interest rates in recent history. Speculative buying has driven up houseing cost in the last couple of years. The interest rates are in the process of coming back up and the price you get for your house today might not be that much less than your could sell it for in five or ten years. In fact, if we see the bubble burst like it did in the 80's you could be losing money in the long run for your troubles. Bottom line is that CRNA school will tax you and require all of your energy and liquidating your assets to get you through it eliminates your cash outflow problems AND your potential headaches and allows you a much better situation mentally and financially for school. When you finish school with your sanity intact you can buy a better house and not worry about holes in the walls and rats in the attic!
I understand your point but let me give you some info on this place. It's a 3 bedroom 2.5 bath, 1800 sqaure feet, carport, garage, backyard, gated commnunity. I bought it for 216,000. the development is not finished and the new townhomes of my exact same model are going for a little over 300,000. I highly doubt my house would loose value I mean for instance, does real estate in new york or LA loose value. My home is in Miami, 30 mins from south beach in a brand new gated community. Correct me if I'm wrong. You seem to know a lot about real estate and the market.
my suggestion is to keep the house for one more year and find 2 good roommates. here is my logic:
you have owned the house for only one year and selling the house will trigger unwanted capital gain tax. you won't pay the tax if you own and stay in your primary home for 2 years.
greenspan and the fed have raised short term interest rate many times through their control over fed fund rate. but the fed has no control over long term interest rates and it is totally up to the market to decide the rates. unlike floating arm rates, fixed mortgage rates (15 or 30 years) are normally tied to 10 year treasury note yield which is completely dependent on demand and supply. as soon as the japanese and chinese governments and u.s. retirees continue to purchase longer term u.s. fixed income assets, i don't see any big jump in 30 year fixed mortgage rate. my friend just refinanced her mortgage to 30 year fixed at 5.375%, which is still so low even after greenspan raised fed fund rates so many times.
brand new homes are normally sold by builders in discount compared to existing homes of the same quality. new homes tend to outperform old homes in both up and down markets. condos/townhomes tend to hold the price better than single family homes. so there isn't really much to worry about.
you may be a little bit short on payment, but remember some portion of your monthly payment is principal and you will get it back when you sell your home. plus your rental income will probably be subject to little or no tax as you have mortgage interest to deduct.
i also live in a hot real estate market and i am going to crna school this coming august. my husband and i also own a home we bought 3 years ago and i don't worry about a price drop at all because there is no way it can drop back to my purchase price.
I understand your point but let me give you some info on this place. It's a 3 bedroom 2.5 bath, 1800 sqaure feet, carport, garage, backyard, gated commnunity. I bought it for 216,000. the development is not finished and the new townhomes of my exact same model are going for a little over 300,000. I highly doubt my house would loose value I mean for instance, does real estate in new york or LA loose value. My home is in Miami, 30 mins from south beach in a brand new gated community. Correct me if I'm wrong. You seem to know a lot about real estate and the market.
Well see how a little more info clears things up :chuckle In your case your property value in a top 5 market is probably secure, but I would be DAMN sure I knew who was renting my house, a credit check and PERSONALLY reviewing their previous 3 housing references is a must! Even if you get a management company to rent for you I would still insist on checking any tenants rental history personally and specifically ask how they left their place on moveout. You have no idea what a tenant (even some with good credit) can do to your place in a short time if you don't choose your renters well. Also, make sure they are renting for the long term and have rental history indicating they don't move a lot. Nothing is worse than studying for midterms or finals and getting a call that your place is empty and you need money to pay the morgage for a couple of months while they look for a new tenant and refurbish your place at your expense. Lastly, ask for enough money to pay your morgage with a little left over to pay management. If these are truly $300,000 houses, and your's is less than a year old, you should be able to rent it and not lose money. We have 3 bedroom houses here that are barely 200,000 renting between 1800-2000/month. If a tenant can't afford the house payment you don't want them in your house. Just my 2¢ yet again
Good luck to you whatever you decide and congratulations on your career choice.
I again am torn on what I should do. This is turning out to be quite a difficult decision. I really like living here. Would find it extremely difficult to sell. I do appreciate all this info. It has been quite helpful. I do have until August to figure something out. I'll fill you guys in on what I decide and how things actually turn out.
JimmyMallo
73 Posts
Just my 2¢ but if your house has appreciated 30% since you bought it I would sell the crap out of it and let it pay your way through school and not have the headache of renters. You have no way of knowing what they will do to your house and your paying money out of pocket for it to be maintained and that doesn't even begin to cover the cost of damages that even seemingly "nice" tenants can do to your house. My father managed 6 rental housed and when he decided after 4 years to move into one of them it cost him over $10,000 just to get it back to livable again. It's really a headache you don't need. On another front, you are taking the headache and risk of trying to rent a house you only have one year of equity in and if a tenant really messes your place up you could easily lose money trying to unload it. Don't believe for a second that you'll ever collect damages against a tenant even if you get them awarded in court. Lastly, Alan Greenspan and others have already said that there is an unsustainable bubble in housing prices right now because of the lowest long term interest rates in recent history. Speculative buying has driven up houseing cost in the last couple of years. The interest rates are in the process of coming back up and the price you get for your house today might not be that much less than your could sell it for in five or ten years. In fact, if we see the bubble burst like it did in the 80's you could be losing money in the long run for your troubles. Bottom line is that CRNA school will tax you and require all of your energy and liquidating your assets to get you through it eliminates your cash outflow problems AND your potential headaches and allows you a much better situation mentally and financially for school. When you finish school with your sanity intact you can buy a better house and not worry about holes in the walls and rats in the attic!
Whew, that was quite a rant for 2¢ :rotfl: