• We’re currently investigating an issue related to the forum theme and styling that is impacting page layout and visual formatting. The problem has been identified, and we are actively working on a resolution. There is no impact to user data or functionality, this is strictly a front-end display issue. We’ll post an update once the fix has been deployed. Thanks for your patience while we get this sorted.

Advice on real estate

z1ggy

z1ggy

Lifer
Some of you may have recently read mizzou's recent thread on his real estate situation. I'm too lazy to link to it.. Look it up if you want. Anyway, I am in a similar situation as he is in. I'm not sure what to do with my home I own. Let me explain further.

I currently own a 2 bed, one bath ranch in south east CT. I bought the house for $156k, but I wrapped my closing costs and fees into the loan, for a total of $162k. I currently owe $155k on the house, and zillow values my home around $135k-$145k. So overall I am approximately $10-20k underwater. Not so great...

I am considering making a move next spring/summer to NY/NJ. My girlfriend who lives in CT plans to get a job down there to be closer to her family. She will be living at home so she can pay off her student loans (around $150k worth) as fast as she can. She likely will not pay them all off, but she wants to live at home for 2-3 years to make as big of a dent as she can. I can't really see us dating long distance for 2+ years and being happy. Hence the desire to move.

This leaves me with 2, perhaps 3 choices:
-Sell my house as a big loss
-Rent my house out
-Try to convince gf to move in with me

The first option is not an option IMO. Depending on the selling price, I'm looking at needing to come up with upwards of $20k to pay off the house. No chance I'll have that kind of cash by next summer. I'd be lucky to have around $10k. Then, I'd deplete all my savings and have no money for rent for a new apartment in the new city. Seems like a tough sell.

Renting the house out seems financially possible. I currently pay $1200 a month, and could likely rent the place for $1300. As others have said, insurnace will probably go up a bit because it is now a rental property, but after tax write offs, I will still profit. I'd likely hire a property manager and pay a small fee to them, as I will be about 3 hours away. The tough part with this is two fold, though. I need to have enough cash in the bank to be able to pay 2 mortgages in case nobody rents from me right away, and who ever does rent from me could destroy the house, or be a total pain in the ass costing me lots of money. I've never been a landlord before and I could get in over my head, and then be stuck in a lease with some douche. Yikes.

Option three is probably the easiest and makes the most sense. However, my gf is very close with her family, and for her, the best choice is living at home. I would win, she would lose. Doesn't seem all that fair to her.

There might be some compromise in the mix, but I can't really see it. Personally, I can't see myself being able to hold the house and wait for years. I want to get out of SE CT and I want a different career, on top of obviously wanting to be closer to the gf. I feel kind of screwed and it's causing me stress, even tho it's a year away. It's a big decision and step in my life.

TLDR;
Own house, I'm under water
Selling would cost me $20k, renting could get hairy and expensive, too
What would you do?
 
Selling would financially set you back too much. If you like that house and can afford the payment you should keep it.

Your girlfriend is how old? I might be sounding like an old fart here but you might want to have a talk with your girlfriend about what being an adult and growing up means. Assuming you're at a point in the relationship where moving in together makes sense. Then again you say you want to leave. Some kind of logical assessment of reality needs to take place. If I was dating a woman who wanted to live at home for 2-3 years I would be severely put off.

To me it sounds more like your options are take the next step in your relationship or break up but for all I know you've only been dating for 3 months and that's way off. Then again you are talking about a year in the future. Either way renting out your home presents a whole new set of problems. Both of you need to ask yourselves what's best for the future of your relationship. If you can rent it problem free then that's great but renting is not for everyone and in my experience most people are terrible land lords and if that's not bad enough you have a good chance of getting a terrible tenant.
 
$1300 over a $1200 mortgage will likely cost you by the time you are done paying for property manager and maintenance. Your home will also likely lose "real" value as it will not be taken care of as well. What is your rate and how much taxes do you pay? $1200 seems like a lot.

You might want to make sure taxes are not affected. In some places (not sure about CT), taxes can go up if it is not your primary residence.
 
Talk to her and ask her. Sounds like she doesn't want to live with you. You guys have the buying the cow talk ?
 
You're considering moving a ?couple hundred? miles to be with her. So, is she a keeper? Does she think you're a keeper?

if yes and yes:

The distance is short enough that you could easily see each other on the weekends, but that's not an option for you, so my 2 suggestions:

1) convince her to stay with you in CT. You guys will probably end up getting married and having kids. She can continue to live almost rent free so that she can pay off her loans quickly. After all, once you're married, her debt is your debt (okay, this isn't true, but it's the view I took because I intended to (and currently still am) married for life.)

B) move in with her and her parents. You can keep the place in CT, rent it out, and break even/make money.

3) be long distance for a while. She's going to be sick of living at home after a few days/weeks/months and may want to move away.

aparently I can't count.
 
Last edited:
AViking said:
Selling would financially set you back too much. If you like that house and can afford the payment you should keep it.

Your girlfriend is how old? I might be sounding like an old fart here but you might want to have a talk with your girlfriend about what being an adult and growing up means. Assuming you're at a point in the relationship where moving in together makes sense. Then again you say you want to leave. Some kind of logical assessment of reality needs to take place. If I was dating a woman who wanted to live at home for 2-3 years I would be severely put off.

To me it sounds more like your options are take the next step in your relationship or break up but for all I know you've only been dating for 3 months and that's way off. Then again you are talking about a year in the future. Either way renting out your home presents a whole new set of problems. Both of you need to ask yourselves what's best for the future of your relationship. If you can rent it problem free then that's great but renting is not for everyone and in my experience most people are terrible land lords and if that's not bad enough you have a good chance of getting a terrible tenant.
Click to expand...

I am going to be 26 tomorrow, and she will be 24 in a few months. So by the time this situation realizes itself, I will be 27 and she will be 25.

We've been dating for 1 year currently, if that makes a huge dif.

And what is your definition of a "good chance". All my friends rent, and they are good tenants as far as I know. That's what a background check, and credit check are for. If I see a person has a stable job and good credit, they are much less likely to be flakes. Plus I can mitigate SOME losses by charging them security deposit, if they happened to ruin something in my house. Plus, if worse comes to worse I can sue them in civil court for damages (Not sure if I'd win...).


PricklyPete said:
$1300 over a $1200 mortgage will likely cost you by the time you are done paying for property manager and maintenance. Your home will also likely lose "real" value as it will not be taken care of as well. What is your rate and how much taxes do you pay? $1200 seems like a lot.

You might want to make sure taxes are not affected. In some places (not sure about CT), taxes can go up if it is not your primary residence.
Click to expand...

My rate is 3.75%. I put 0% down on the house. I pay ~$2700 a year in property taxes. Yeah... CT sucks.

jaedaliu said:
You're considering moving a ?couple hundred? miles to be with her. So, is she a keeper? Does she think you're a keeper?

if yes and yes:

The distance is short enough that you could easily see each other on the weekends, but that's not an option for you, so my 2 suggestions:

1) convince her to stay with you in CT. You guys will probably end up getting married and having kids. She can continue to live almost rent free so that she can pay off her loans quickly. After all, once you're married, her debt is your debt (okay, this isn't true, but it's the view I took because I intended to (and currently still am) married for life.)

B) move in with her and her parents. You can keep the place in CT, rent it out, and break even/make money.

3) be long distance for a while. She's going to be sick of living at home after a few days/weeks/months and may want to move away.
Click to expand...

We've talked about our future in general. We just had our one year "anniversary" last weekend. I commented on how I think we have what it takes to take it to the next level, and she agreed. So yes I think she is a keeper.

Moving in w her parents isn't an option. They have a small little house and no where for me to stay other than the couch. I also have 3 cats and a dog. Obviously they would need to go, too, which would suck a lot.

And I disagree with her getting sick about being at home. She loves living at home... I'm not going to get into the details, but... Yeah, she's border line obsessed with her family. Much different than my take on my own family.
 
Moving just for the GF is a bad idea unless you want to live there too if things go south. A lot can happen in a year too.
 
You've been together for a year. Have you asked her if she would be willing to move in with you?

I know times are tough but the fact that she has $150,000 in debt and wants to live at home until she's 27 does rub me the wrong way. Surely there's a better way for her to deal with that and I think moving in with you is a good option if you think the relationship has potential.
 
When you rent you don't care about things like a stain on the carpet, a dent in a wall, pouring cooking oil down the drain, etc. All these things add up. Then you get to worse things like flushing tampons down the toilet, not cleaning the gutters, letting it rain onto your hardwood floors, damaging your furniture, bra wires in your dryer, and so on. Then there's the truly wacky ones like the ones who start a drum circle in your living room or convert your bedroom into a shrine to some god they worship.

Going to court to solve these problems will cost you time and money.

That's not even dealing with you. When the heat fails and they sue you for breach of contract or refuse to pay you rent and you have to get them evicted, that will cost you money as well.

Then of course renters could lower your real estate value.
 
AViking said:
You've been together for a year. Have you asked her if she would be willing to move in with you?

I know times are tough but the fact that she has $150,000 in debt and wants to live at home until she's 27 does rub me the wrong way. Surely there's a better way for her to deal with that and I think moving in with you is a good option if you think the relationship has potential.
Click to expand...

I haven't asked specifically because it's still far away. The most she's said is she will probably get her medical license in CT so she could at least have a chance to move here.

However, every time she talks about the future, it generally is focused around her living at home.

Plus, she won't have any friends around here. It will be just her and I...

I don't really have friends here as it is anyway, so moving some place else isn't really much of a social change for me. I'll find new sports leagues, etc.

AViking said:
When you rent you don't care about things like a stain on the carpet, a dent in a wall, pouring cooking oil down the drain, etc. All these things add up. Then you get to worse things like flushing tampons down the toilet, not cleaning the gutters, letting it rain onto your hardwood floors, damaging your furniture, bra wires in your dryer, and so on. Then there's the truly wacky ones like the ones who start a drum circle in your living room or convert your bedroom into a shrine to some god they worship.

Going to court to solve these problems will cost you time and money.

That's not even dealing with you. When the heat fails and they sue you for breach of contract or refuse to pay you rent and you have to get them evicted, that will cost you money as well.

Then of course renters could lower your real estate value.
Click to expand...

I realize that, but again... Background check, plus references including past landlords.

The way I see it financially is that renting will probably put me at a loss.. But less of a loss than if I sold. Plus, I can write those losses (up to 3k per year and any other expenses) off on my taxes, and I can still write the property taxes and mortgage taxes off, too.
 
If you pay $1200 now and think you can get $1300, you may want to get a current market analysis of rents in your area of comparable properties and see how accurate your prediction is.

I can tell you that if your base cost of living is $1200 and you are getting $1300, you will barely be profitable and perhaps unprofitable. My home insurance became more expensive for instance when I converted it into a rental. I had to pay for a certificate of occupancy and get inspected for fire code. Tenants will usually rip through a property faster than a homeowner who actually cares about his place and you will have more wear and tear. There may be costs which you are not even aware of. For instance, I could no longer deduct mortgage interest because it was no longer my primary home.

My advice is that you talk to a realtor and have her run a market analysis for rentals in your area. She will give you the bottom line on whether or not on what your property will rent for. if you like what you hear, you can sign a listing agreement then. Talk to a CPA/tax advisor as well and let them now you are thinking f converting your primary residence into a rental. You will have to pay taxes on rental income received too.
 
Last edited:
Well, I'm going to tell you what you don't want to hear, but here goes. You have a 2 bdr house. That's going to hurt your price more when selling or even renting it than you can ever possibly imagine. The one bathroom is a tight squeeze, too. But the 2 bdrs is an absolute deal breaker for most people looking to buy a house. If it's feasible with the home design to add on a bdr and possibly even a bathroom to that bdr, you will be able to probably sell for more than the current appraisal and maybe even put a few bucks in your pocket for the trouble.
 
Another thought, if you have money to do some upgrades to the house you can increase its value. When you increase the home's value, a few well placed strategic upgrades can actually pull you out of an underwater mortgage. When you go to sell the house, you will make more money than intended and won't lose money on the deal. Do your research and see what your home lacks in comparison to other homes. If you can upgrade cheaply, this may be possible for you.

Especially if you are only 10-20 K underwater, most reasonable renovations or upgrades can add that kind of value and improve your position if you do sell. Or get you more money when you rent it out

For instance, I ripped out a 80s style kitchen in my 2 BR, 2 Bath condo and replaced it with hardwood cherry cabinets, new appliances, tile floors and backsplash and granite countertops. I just signed a new tenant on March 1 and he is paying me $500 more per month in rent than my previous tenant who left in December 2013 just for a kitchen upgrade. At this rate, I can have the kitchen upgrade paid off in 3 years. I intend to do the bathrooms next year and get more rent.
 
Zillow isn't necessarily correct. It's not 100% accurate if you live near any lesser neighborhoods or if your neighborhood offers something theirs doesn't.

Example.
Zillow says my house was worth $130k when I bought it. I paid $160k for it 5 years ago. Since I paid so much, the number instantly jumped to $152 and has been going between $145k and $155k. I had it appraised last year professionally to get it refinanced and it appraised at $185k because I had updated it with new hardwood floors, tile, recessed lighting, paint, and dual fuel hvac, new roof, etc... Zillow is just guessing based on location and sales of all homes within a 5 mile radius of yours.

I live on a wide street with plenty of space between houses....lots are generally 1/3 acre or larger and are nicer homes built in the mid to late 1970s. The subdivision has only 3 streets to enter/exit the neighborhood so traffic is very light and it's got a nice .75 or 1 mile loop for walking down the wide streets. I'm only 1/2 mile from shopping and restaurants.

If you go a mile in any direction you have a mixed bag of narrow streets and houses in disrepair. I can look across some of the back yards in my neighborhood and see apartment buildings. The Zillow numbers are an average of your area and can come in high or low depending on what's around you. Call an appraisal specialist and pay them $300-400 to find out what it's really worth or simply ask a real estate agent to look at it because you're thinking about listing. They'll give you some more insight to what's moving in your area as they can pull sales records and see what prices are trending.
 
One more thing to consider. Your home is 2 bath and 1 bedroom. Here in 'Merica, that's not a big dwelling. You should look and see how many 3 bedroom 2 bath ranchers there are since that's the ideal size for most small families.

A 2 bed, 1 bath home is great for starter homes and that may cap what people are willing ot pay for it. Jump on a few local real estate searches in your area and see if you can figure out what most people are charging for a 2bd/1ba with similar square footage in your area. Then see how that compares to Zillow's recommendation.
 
Look in the other thread you mentioned for my comments about being a landlord. In your case I would moderate it a bit as: (1) NJ to southeast Connecticut is not that big a drive, you can do it easily if need be and (2) southeast CT property values are up the upswing, especially if you are near the shore or near Electric Boat.

If you rent, first choice by far is a dependable relative or friend.

As another mentioned a lot can happen in a year.

I wouldn't base any decision on a Zillow valuation-they are pretty much bogus in my view. Talk to a local real estate broker and get their input and an informal market analysis-it shouldn't cost you anything.

Also I sent you a PM.
 
SlickSnake said:
Well, I'm going to tell you what you don't want to hear, but here goes. You have a 2 bdr house. That's going to hurt your price more when selling or even renting it than you can ever possibly imagine. The one bathroom is a tight squeeze, too. But the 2 bdrs is an absolute deal breaker for most people looking to buy a house. If it's feasible with the home design to add on a bdr and possibly even a bathroom to that bdr, you will be able to probably sell for more than the current appraisal and maybe even put a few bucks in your pocket for the trouble.
Click to expand...

NetWareHead said:
Another thought, if you have money to do some upgrades to the house you can increase its value. When you increase the home's value, a few well placed strategic upgrades can actually pull you out of an underwater mortgage. When you go to sell the house, you will make more money than intended and won't lose money on the deal. Do your research and see what your home lacks in comparison to other homes. If you can upgrade cheaply, this may be possible for you.

Especially if you are only 10-20 K underwater, most reasonable renovations or upgrades can add that kind of value and improve your position if you do sell. Or get you more money when you rent it out

For instance, I ripped out a 80s style kitchen in my 2 BR, 2 Bath condo and replaced it with hardwood cherry cabinets, new appliances, tile floors and backsplash and granite countertops. I just signed a new tenant on March 1 and he is paying me $500 more per month in rent than my previous tenant who left in December 2013 just for a kitchen upgrade. At this rate, I can have the kitchen upgrade paid off in 3 years. I intend to do the bathrooms next year and get more rent.
Click to expand...

So 3 of the 4 houses directly near me have all been on the market in the last year. They are all 3bed, 1 bath houses. One sold for $130k, not sure what the other went for, but I'm guessing cheap because it was a foreclosure, and the other one is currently listed at $120k.

So there's no way I'd get my money back if I did upgrades. Houses right near me with an extra bedroom are on the market for, or selling at $20k less than my house is worth. So in my eyes, any investment in the house is going to likely be a total waste. I can't imagine my house selling for $170k (what I'd need if I invested say, $15k) when others are selling for $130ish.

I was thinking of putting a bathroom in the basement (the only place with room) and I got quoted at $7k for a half bath, and $15k for a full bath. The kitchen is fairly modern with laminate floors and a nice backsplash. The only place I could add a bedroom is where my current dining room is. It would be a super small bedroom tho, and be RIGHT next to the kitchen.

My house is only 1,100 square feet, I don't really have much room to play with.

I feel like I'm pretty fucked honestly. If my gf refuses to move in with me, my relationship is over and I'll be living in a house that will probably take the better part of 5-10yrs to become profitable.

I also dislike living in SE CT in general and I also dislike my job. Sigh..
 
Zillow is an ok guide but that is it. Two recent examples, Zillow rated my neighbors house at 315k and it sold for 285k
Zillow rated the house 6 homes away from me at 285k and it sold on its first open house for 305k. Each sale happened within 5 weeks of each other.
 
Scarpozzi said:
Zillow isn't necessarily correct. It's not 100% accurate if you live near any lesser neighborhoods or if your neighborhood offers something theirs doesn't.

Example.
Zillow says my house was worth $130k when I bought it. I paid $160k for it 5 years ago. Since I paid so much, the number instantly jumped to $152 and has been going between $145k and $155k. I had it appraised last year professionally to get it refinanced and it appraised at $185k because I had updated it with new hardwood floors, tile, recessed lighting, paint, and dual fuel hvac, new roof, etc... Zillow is just guessing based on location and sales of all homes within a 5 mile radius of yours.

I live on a wide street with plenty of space between houses....lots are generally 1/3 acre or larger and are nicer homes built in the mid to late 1970s. The subdivision has only 3 streets to enter/exit the neighborhood so traffic is very light and it's got a nice .75 or 1 mile loop for walking down the wide streets. I'm only 1/2 mile from shopping and restaurants.

If you go a mile in any direction you have a mixed bag of narrow streets and houses in disrepair. I can look across some of the back yards in my neighborhood and see apartment buildings. The Zillow numbers are an average of your area and can come in high or low depending on what's around you. Call an appraisal specialist and pay them $300-400 to find out what it's really worth or simply ask a real estate agent to look at it because you're thinking about listing. They'll give you some more insight to what's moving in your area as they can pull sales records and see what prices are trending.
Click to expand...

Yea, I was going to add something else about Zillow being frequently stupid with their appraised values too, and got side tracked. Do not believe anything listed on Zilllow. They are desperately trying to be the Google of real estate appraisals, and they use an overly complicated algorithm to try to determine market values automatically and they are often WAY WAY off, and usually off on the too high side of appraised values. Get a professional appraisal before you decide to do anything like remodel, sell or rent and you will be much better off to decide what you need to do.
 
I think the one-year mark is a perfectly reasonable point to seriously talk about moving in together.

NJ -> CT isn't exactly moving across the country, it's a fine distance to still drive down to see her friends on the weekend or invite her friends up to visit you guys (unless you're talking like far southern NJ)
 
Fanatical Meat said:
Zillow is an ok guide but that is it. Two recent examples, Zillow rated my neighbors house at 315k and it sold for 285k
Zillow rated the house 6 homes away from me at 285k and it sold on its first open house for 305k. Each sale happened within 5 weeks of each other.
Click to expand...

In my neck of the woods, the Zillow appraisals are often 2 or 3 TIMES what the properties are actually worth, seriously, I couldn't believe it looking at the stupid appraisals in my area. And I even flagged 2 properties of my own in their system as being massively over appraised, and they completely ignored me and refused to change the appraisals.
 
It's sounds like 1) both of you are financially unstable right now and 2) neither of you have had enough time in a relationship to be considering forever.

$10-20k upside down is hardly terrible. Most that would have put down the traditional 20% would be that much upside down the first few years...buying a home is not something you can swap out in less than 5-7 years much like buying a new car is not something you can trade in 1-2 years usually and come out ahead.

Zillow and other valuations will normally be up to 10% off.

At less than 1 year together especially that it's not been so active, you should both still be dating others anyway.
 
You must log in or register to reply here.

TRENDING THREADS

Back
Top