Wednesday, August 16, 2017

Housing Expenses – Why I Rent



Rent

The price I pay to live in my home is, by far, my highest monthly expense.  For what I have, a 4 bedroom, 2.5 bath home with a sunroom and 2 car detached garage, in a really nice neighborhood, it is cheap.  In fact, most 2 bedroom – 1 bathroom (run down) apartments in my city, are near the same monthly cost.  I pay $1100 in rent for my home.  It belongs to my friend.  I often have conversations with him about whether he needs to raise the rent or sell the house as he recently bought another house for him and his girlfriend.  I tell him he can rent it out for at least $1450-$1550 per month, and he always counters with:


  • he doesn’t want strangers in his house
  • he doesn’t have time to get the house interior painted for renting (it still has personal paint designs from his ex like one bedroom painted with an underwater theme, sharks and all)
  • he saves money by not having a storage unit to store all his tools – we share use of the garage and storage shed
  • he saves money by not having to store his enclosed trailer that is parked next to the garage
  • he saves money by not having to store his 2 project trucks that are parked in the backyard

My utilities run around $400 per month, so I pay out around $1500 per month for my housing expenses.  This may not seem like much to most people, but it’s a significant portion of my spending.

Home Mortgage

I looked into purchasing a home recently, mostly for an investment, but it doesn’t make much sense financially right now.  I can find a few houses in my neighborhood that need to be renovated with asking prices around 160-175k and having post-renovation values of 200-225k.  My mortgage with taxes and insurance would be around $1050 per month on a 30 year fixed mortgage, and about $1350 per month on a 15 year fixed mortgage.  This would require me to save around 4% down and have closing cost money.  Since I’m still trying to pay off my last debt , I just don’t have any room to save that money right now or have any extra to throw at renovations.  A home, when it’s time, will be a great addition to my net worth, especially if I go for the project home and get moving at fixing it up.

Between the time of writing this and posting, MMM's latest post is an interview with Zeona McIntyre about her experience using airbnb for extra income.  I often wonder if this is a route I could pursue to get some extra income.  It's a great interview and worth the read.  Check it out and let me know your thoughts about renting space in my home.


Monday, August 14, 2017

Busy, Busy, Busy


Work Update


Work has been insane these past couple weeks.  I’m in the middle of transferring from prototype stage to customer demo/functional prototype stage and the demo has been accelerated by the customers limited calendar availability.  To make it more of a challenge, more components were needed, which changes the design significantly.  The only thing CONSTANT in Engineering is CHANGE!  I’ve been in work mode day and night and haven’t had a chance to write.

 Debt Update



Since my last post, debt-vs-saving-vs-investing , I have decided to do what I talked about.  I temporarily stopped my IRA contribution (missing out on the company match).  I stopped my stock purchasing.  I stopped contributing to my savings accounts.  I transferred $600 at one point to my loan, and then another $400 a couple days after that.  My balance is now, as of today, $4023.28.



I now have a visual chart (spreadsheet) on my fridge as a constant reminder of making this goal.  It has 5000 boxes to be filled in and I’m using a bright green highlighter to mark off the boxes as I pay down the loan.  It’s working.  It’s slow going, but it’s working.  My yearly budget (spreadsheet with columns of months) is also now on the fridge in wide open view, for all to see.  I always kept my finances private in my home life, but I figured if I’m posting most of my financial life publicly here, I might as well open up a little in my personal life.  Here’s to continued progress!

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