Bigger house for Tunaclan?

When I was looking to rent my house in TN and move here to Louisville the bank wanted the monthly rent to be 120% of my monthly payment. As that put me above similar houses I couldn't do it. I would talk to your lender first about requirements for renting to see if it's doable.

Junkyard_Dog wrote: When I was looking to rent my house in TN and move here to Louisville the bank wanted the monthly rent to be 120% of my monthly payment. As that put me above similar houses I couldn't do it. I would talk to your lender first about requirements for renting to see if it's doable.

Current finance guy is the same as the last finance guy. He sold the loan, but he understands what we're doing. It looks like we're not going to get a new loan on the existing loan, just grab some equity from it for down payment on the new place.

Anyway, noted. I don't understand money games, but it's a good point that I'll make sure of.

As we give you 'advice' just remember that you're the only one that sits down with Tunawife at night and makes sure she's happy with the life you two have. You two get to decide what your priorities are and what makes you happy. It's easy for any of us to tell you to suck it up because we don't walk into the chaos that is your living room at the end of the day and look your wife in the eye and ask how her day was.

mazdeuce wrote: As we give you 'advice' just remember that you're the only one that sits down with Tunawife at night and makes sure she's happy with the life you two have. You two get to decide what your priorities are and what makes you happy. It's easy for any of us to tell you to suck it up because we don't walk into the chaos that is your living room at the end of the day and look your wife in the eye and ask how her day was.

Good call!

I only extrapolated because he was curious. I wrote it carefully, hoping that it would not invoke the type of response you're talking about.

https://en.wikipedia.org/wiki/Four_Yorkshiremen_sketch

tuna55 wrote:

dropstep wrote: Just curious as too how your current house is laid out. I have 1980sq ft plus basement and its 4 bedroom. 3 fairly large and one i use for a mancave.

We have no basement We have very limited attic space We have 3 bedroom, 2.5 bath. Stairs are off to the side, downstairs bathroom is center. Kitchen is OK sized, dining room is OK, and right off main entrance. Living and family room is all combined with arch, and it's nice, but not enough for homeschool. We really would like an office space type arrangement, with a doored room off of the main floor so the kids can have a quiet(er) place and Tunawife can store things. For those not familiar with homeschooling, imagine the offices of every teacher and the principal for a given grade and put them all in that same house. Likewise, a bonus room or whatever extra room exists would be good to use as a playroom, thus leaving the rest of the house livable. As it is not, family and living rooms are dominated by their stuff. So, imagine your house, with four kids. Three kids stuffed in one room, one kid in her own room. No basement to store stuff, and four kids worth of stuff, and the stuff all required for homeschooling stuffed into the kitchen and dining room.

Yeah i only have 2 kids and they still wont sleep in seperate rooms (twins) and my kids attend public schools. I can see how adding 2 more kids and no basement storage would quickly pile up.

Just talked to finance guy. We have a super low interest rate due to a refi at the right time. In order to do the two houses thing, we're talking a solid $500 more per month to buy another $250K house and put both loans on 30 year fixed.

That's iffy. We have to back it down, I guess, if we want to be able to make payments indefinitely if we have no tenants.

We did this for our last move, and it worked. The rental paid for itself plus cash every month.

A couple of questions you might want to ask yourself.

Can you afford to change out any of the following, because twice the equipment means twice the failures. Water heater, heat pump, toilet, range, refrigerator, dish washer, roof, plumbing, etc.

In the 4 years I've been a landlord I've replaced a dishwasher, roof, compressor drive board and air handler on the rental. Total spent was just over $5K, cash out of my pocket. Yes you get to deduct that from your income taxes, but it's still cash out of pocket. In that same time frame, I've also replace the refrigerator, condenser coil and water heater at my house and am fixing to drop $9K on a new roof. Bringing the grand total up to $18K including the roof.

Add to that, a Sunday morning changing the air handler, a Thursday night crawling around under the rental repairing a busted water line, a July Saturday replacing the screens over the gable vents in the attic, a cold Friday night loading up all my space heater to carry to the rental because the heat pump burned up a breaker.

Can you afford both house payments when the rental is empty. I have carried two mortgages for about 4 months and that Sucks.

Did I make money at it? Yes, the rental was a net gain.

Was it worth it? Not to me. I don't like the 5 pm phone calls about leaking pipes, animals in the attic, heat pump quit, no water, etc. If you don't have lots of cash, you are dropping everything to go fix it yourself. And tenants don't take care of stuff like you do, so crap will break and will need to be fixed ASAP.

I just sold the house.

Life is simpler, life is good.

I am by no means saying don't do it. It can be done and you can make money at it. I have a brother in law with 20+ rental units and he loves it. Be honest with yourself and realize, it's not all roses and can get expensive very fast. The Oh E36 M3 moment when the tenant calls because the heat pump died is not fun unless you have the cash in the bank to get it fixed.

One other word of advice -- look carefully at the laws regarding tenant vs landlord rights in the city you live in. They vary widely in terms of balance, some places are much more landlord-friendly, others always come down on the side of the tenant.

We homeschool.

My wife and I agree that the best thing we ever did was to sell our 4800 SF house and move our family of 7 into a 3 BR 1900 SF house.

We gave the MBR to the 3 youngest kids (2 boys and a girl), each of the teenagers got their own room, and my wife and I slept in the foyer (seriously), which we later converted to a small BR.

It was really crowded, but the rewards have lasted a really long time.

We are convinced that the kids who shared a room are MUCH closer, largely due to the forced sharing scenario.

YMMV.

BTW, homeowner insurance is more expensive for tenant occupied units than it is for owner occupied units- sometimes a LOT more expensive.

SVreX wrote: BTW, homeowner insurance is more expensive for tenant occupied units than it is for owner occupied units- sometimes a LOT more expensive.

That's funny, it was the exact opposite for us. When I called our insurance co, and told them we were going to rent the house out, and needed a new policy, it was slightly cheaper. The reason is when you rent, the homeowner's insurance no longer covers personal property in the home. So if there's a loss (due to theft or whatever) the tenants are on the hook for replacement. So all the HOI covers then is damage to the actual property itself. I guess their actuarial tables (in our situation, at least) showed that to be less risky.

I'll call insurance assuming the finance guy can make numbers work.

Essentially there are two finance options.

1: Keep existing extremely low interest rate 10 year mortgage (2.75%!!), and get a equity line to steal some of our equity to put enough down on new-house to make that a $200K, 30 year loan. The resulting three loan dance would have a monthly payment on the very high end of what we could make monthly without tenants. I believe this is the best option for a smallest life-of-loan(s) total outlay.

2: Refi current house to get cash out for down payment on new-house, deal with two 30 year loans at the higher (4% ish) interest rates and pay them down to principal way sooner if we have tenants. This method would result in a higher outlay than what we have now without tenants, but not be a whole lot.

SVreX: I appreciate your experience here. I think the biggest issue is that we lack homeschool space. Our sleeping arrangements, well the kids anyway, is working fine. The three sharing a room is not troublesome. The issues are that my bedroom is also the sewing/homeschool prep room. The kitchen is also the homeschool library (for assignments and handed in papers and such). The dining room is also a classroom and a violin room (Tunawife teaches many lessons on the side). The family/living room is also a play room and also a group activity room. We have trouble finding places for everyone to sit during the day to do solo work, and finding a place for everyone to gather to hear a story, or whatever, without being distracted by the inevitable 'other stuff' in the house.

One house we drove by last night had a 30x15 ish room off of the main floor which was down a few steps which would be perfect for a homeschool room. Frankly, keeping the same kid sleeping arrangements as we have now and using an extra bedroom for the exercise stuff, the office stuff, and sewing stuff would help a lot as well.

We make a lot of sacrifices for the well-being of the kids, but I'd rather not sleep in the foyer if I can afford to do otherwise.

Families used to be a lot bigger, and houses used to be a lot smaller. My numbers aren't exact, but I recall reading in the 1950's the average family was 3 or 4 kids, plus parents, and now it's about 2 kids, sometimes with one parent. Meanwhile, average house size went from something like 1400 sq feet to ~2500.

People spend a lot more time indoors nowadays, I guess.

If Tunawife is teaching Violin for actual dollars, even if she's just teaching to pass along the love of the instrument to kids other than your own, then that changes things completely in my mind. Yes, I'm inconsistent with some of my reasoning, but if that's a skill she has, something she does and loves, it's reasonable to provide a place for her to do that well, even if the math means you'd be spending more than she's ever bring in by doing it.

mazdeuce wrote: If Tunawife is teaching Violin for actual dollars, even if she's just teaching to pass along the love of the instrument to kids other than your own, then that changes things completely in my mind. Yes, I'm inconsistent with some of my reasoning, but if that's a skill she has, something she does and loves, it's reasonable to provide a place for her to do that well, even if the math means you'd be spending more than she's ever bring in by doing it.

Yes.

So, on Fridays, the day she has currently allocated most lessons to, the kids huddle off in the living room attempting to be quiet while she teaches in the dining room, because that's where the school work would typically be done.

As a tangent, she does it for both. It keeps her sharp, as that's what her education is, and also she meets and interacts with a bunch of cool families and kids, and she brings home a few dozen dollars for each lesson, and that affords things which are non budgeted like homeschool at the local cafe or ice cream trips during the day, things like that.

Do whatever you can to support her in that. In everything, but that in particular. There are things that keep us stay at home parents sane and from being completely absorbed into the tiny world that is carimg for kids. Pretty much every single successful stay at home parent I know has their 'thing'. For me it was cars. I had to step away from them for a couple of years but I was always happiest at home when I was taking care of kids AND working on cars.
People underestimate what a big deal it is to have support for your 'other' thing, but it's HUGE.

It still sounds like a modest addition is your best route then. Is the impediment neighborhood bylaws, lack of real estate, zoning? If it isn't a bedroom being added but a "den" would that be more palatable?

What about garage space, is there something that could be converted to classroom?

KyAllroad wrote: It still sounds like a modest addition is your best route then. Is the impediment neighborhood bylaws, lack of real estate, zoning? If it isn't a bedroom being added but a "den" would that be more palatable? What about garage space, is there something that could be converted to classroom?

The garage would need significant work to become living space. Additionally, we wouldn't have anywhere else to put the garage, and I kind of enjoy having a garage.

If we added, it would be to the rear of the house. To do this, we would either need to limit this to half of the width of the house, or pull trees and redo the septic system. Being a two story house, the addition is either two stories or attaches between the floors. Either one is going to require a major rework to the roofline, which is a truss system, meaning new trusses all around.

I am not an expert, but I have estimated something like $40K for a one-room addition, plus we would need to move the garden and make a new deck. Add to that it would make our $165K house worth precisely $165K, and I am not a fan. Also, imagine this dialogue: "Hey Tunawife, I know homeschool can be hard because you're cramped on space, so what we're going to do is knock down this wall and have a crew in the house for a few months building an addition and redoing the HVAC system, you won't be able to really play outside during the day, nor really let the kids play in the living room, but after a few short months of pain, we'll have an extra room, and then you can get to work regrowing the garden and I can go to work making a new deck"

Just throwing out some options you may not have considered yet......

Is the whole house 2 story? I mean specifically above the garage? A lot of 2 stories around here have a one story attached garage. Would it be possible to add up above the garage ? Also most locals don't require a building permit for a shed (mini-barn). How about putting one (or another one) out there, and either making that the home-schooling school house (of course insulated, power, HVAC) or moving most of the garage stuff out there and partitioning off part of the garage for storage/ school room.

Have you explored adding a separate structure on the property? Don't you have some backyard space (going from hazy memory of that drainage discussion). Literally just a (class)room. I wonder if it would be cheaper than the addition.

Edit: same thought as indyjoe

I'd talk to a realtor about selling your place to gauge what it might bring in the current market. It might be less risky to put your place on the market, and use the money from the sale to put down on a larger place than it would be to try and juggle the issues with having multiple mortgages and multiple properties to care for.

If Tuna Kids get a break from the homeschool stuff during the summer, it might allow you to clear out some space in the house to make it more appealing to potential buyers. And having less stuff crowding everybody might improve morale a bit too.

Why do you believe that your house wouldn't go up in value with more square footage? I know the probability of it going up the same amount as the cost is unlikely but you should realize some increase value.

1800 sf at $165k gives $91.67/sf Random addition of 200sf on the first floor and 200sf on the second gets 2200sf at $165k gives you $75.00/sf. That's a pretty big hit and seems unlikely.

We haven't added on to our house (other than the second floor which was easy) for very similar reasons. The sides where we could add on put us into the side of the garage or right onto the property line. Adding the other way is an architectural nightmare as well as requiring moving all of the plumbing that goes in and out of the slab, the septic, and the driveway, and like you, our house wouldn't change in value even a tiny bit.

What about renting an office space? It's definitely not ideal but in could work if it's just around the corner...

The garage is one story with attic, so indeed the roofline is shorter than the rest of the house. The roof faces the other direction, so if we brought it up to the level as the rest of the house, we would need a new roof there.

The worst part is that there really isn't a way to connect the two if we went that route. The stairway borders the garage, and obviously exist through the other side, so the only way to get from the now-house to the hypothetical room above the garage would be through an awkward hallway which would take a swath of Tunakid #4's already small room, and take her closet completely away.

It's still a $30K proposition, and the resulting mess would be compromised.