Foolish Or Not Foolish! :-)

**reallyprettyhappy** · 11-19-2009, 08:17 AM

I voted for 'reasonable'. At approximately 33% of income, it is a bit high, but having just moved from a very HCOLA (Wash DC) I know how much people in those areas sacrifice for decent housing.

However, another thing I know about areas like that is that MANY people have what most people in this country would consider an outragous commute in order to have affordable, decent housing. So, maybe you could take another look there and go a touch further than you thought would be reasonable. The first place we lived in DC had me at about an hour and a half, each way, for my commute into the city. We subsequently moved closer and I ended up at about 50-60 min each way. That was right about at the average for most people in the area. I took the metro most of the way so I could read the paper and relax and it worked out fine. Ideal, no, but tolerable. Maybe give that a think and increase the radius you're looking in by 10-15 min drive time and you might be on better ground.

**syracusa** · 11-19-2009, 08:46 AM

Originally posted by reallyprettyhappy View Post

... but having just moved from a very HCOLA (Wash DC) I know how much people in those areas sacrifice for decent housing.

...and good school district. This is another parameter that pushes the price up severely. We could get more house for less if we agreed with mediocre to not-good schools. I can't quite make myself do that.

**Joan.of.the.Arch** · 11-19-2009, 08:51 AM

Does the mortgage given include real estate tax and any needed insurance?

**reallyprettyhappy** · 11-19-2009, 08:59 AM

Originally posted by syracusa View Post

...and good school district. This is another parameter that pushes the price up severely. We could get more house for less if we agreed with mediocre to not-good schools. I can't quite make myself do that.

I have trouble believing that virtually any school district in MA is worse than where you are now. Plus, your kids are still pretty little. You're not talking about buying, so you don't have to worry about it for resale...if you're just going to be renting and your oldest it only 4, I wouldn't really worry about it as much right now. Say two or three years pass, your husband gets a raise, you get to know the area much better and find the perfect place to buy. I don't think 1 or 2 years in a mediocre school district is going to ruin your 4 year old. Give it some more thought and keep looking!

**MonkeyMama** · 11-19-2009, 09:00 AM

I think it's extremely reasonable given the region.

For reference, we moved to a "LCOLA" - considerably cheaper than where we are from, and pay about $1600 mort/propr tax on $5500 take-home.

Which, I would personally consider, dirt cheap. (I am from a Boston-like area).

You are talking about 25% gross to housing. & you are talking about rent - something you will not be tied to (you can always move into something cheaper if you change your mind or if a job is lost). I am not sure how you could do much better in Boston.

**Joan.of.the.Arch** · 11-19-2009, 09:13 AM

Please pardon my question above. I was sloppy in my reading, thus not catching that you are talking about rent, not mortgage. So I'll add my positive tally to your poll.

**syracusa** · 11-19-2009, 09:18 AM

Originally posted by Joan.of.the.Arch View Post

Does the mortgage given include real estate tax and any needed insurance?

If you're referring to the Boston end, we will be RENTING there.

If to the Atlanta end (where we own), property taxes are included in the mortgage. For that one, mortgage is 1700 and our tenant pay us exactly that.

**MonkeyMama** · 11-19-2009, 09:45 AM

So wait - are you including rental income to offset the mortgage?

That would change my answer the other way. What options do you have if you lose a tenant?

**LivingAlmostLarge** · 11-19-2009, 09:52 AM

Reasonable for the area completely. Would I do it? Probably but then again I would prefer to live somewhere cheaper.

**syracusa** · 11-19-2009, 09:54 AM

Originally posted by MonkeyMama View Post

So wait - are you including rental income to offset the mortgage?

That would change my answer the other way. What options do you have if you lose a tenant?

What happens at the Atlanta end is not included in the budget at all because it is a wash. We have a 1700 mortgage in Atlanta and our tenant pays us 1700 - which offsets the mortgage. Tenant just signed a 1 year lease renewable. When he leaves we will look for another one. We had no problem renting out the place along with other owners in the townhouse who have rented their place equally fast. It is a beautiful townhouse in a great location so we are hoping that if we have to find another tenant in the future we will be able to find them relatively fast. That's all we can do.

**MonkeyMama** · 11-19-2009, 12:11 PM

Overall - that changes things dramatically. You are talking about $4k/month housing expenses if you lose a tenant. You would never lose a tenant? Haven't we all heard that one before? Does anyone pay attention to the news?

Sounds pretty darn risky. Which is probably why you have reservations in the first place.

I'd change my vote to "foolish" if I could. Though I am notwless clear on your current situation - like where you are living now. Or if it makes more financial sense for your spouse to try out the job and not pick up and move everyone now, etc.

More information is always interesting. Usually why I answer "it depends" with so many of these things...

**syracusa** · 11-19-2009, 12:25 PM

Originally posted by MonkeyMama View Post

Or if it makes more financial sense for your spouse to try out the job and not pick up and move everyone now, etc.

Not an option. I cannot stay behind with the kids by myself without a deadline in site. Paying two rents/mortgages (for me to stay here with kids, for husband to stay in Boston to work) does not sound very smart to me either.
Bounced this view off of husband and he says that staying in Atlanta on my salary would still involve
us moving out of our current place and renting it (as we could not afford it on my salary only). If we lose the tenant in this situation, we would be in an even less enviable position trying to take the hit, than if we are in Boston.

We have to move for a job and the only way to do this is to rent out our townhouse. Selling is not an option as we would lose quite a bit on it right now.

According to husband, what we are doing is NOT a choice, it is an imperative - and the risk must be assumed, whether we like it or not. If we were to lose the tenant, whether we rent for 2200, or for slightly less in MA, we would still have a nasty problem in our hands.

So far no one in our townhouse has had any problems finding tenants or losing tenants. We hope that it will be the same for us until we sell the darn thing, maybe in a couple of years.

**DayByDay** · 11-19-2009, 01:48 PM

Originally posted by syracusa View Post

Selling is not an option as we would lose quite a bit on it right now.

So far no one in our townhouse has had any problems finding tenants or losing tenants. We hope that it will be the same for us until we sell the darn thing, maybe in a couple of years.

I wouldn't be holding my breath waiting for better housing prices. I could be wrong but, from the information I've been reading, those days are gone and will be for quite some time.

Regarding your rental, when you factor in costs of repairs, maintenance, and the cost of travel expenses to go back to deal with those things (or the cost of a management company), it really isn't a wash after all.

**LivingAlmostLarge** · 11-19-2009, 01:55 PM

But if you sell for a loss, you'll know what will happen. If the tenant decides to not pay or run off is it hard to kick someone out? If something breaks, what happens?

I hate the idea of absentee landlording.

Foolish Or Not Foolish! :-)