Friday, May 30, 2008

Only the SCARIEST THING EVER

So. Don and I have an opportunity to buy the house we're living in from our landlord. I think we're going to try to do it. I am FREAKING OUT over here: so much stress and anxiety over this spur-of-the-moment decision. It is sort of a now-or-never deal because if we buy directly from him, we don't need to get real estate agents involved, and can save some money on both ends. He's selling either way, so if we don't (or can't) buy the place, he'll be listing with an agent: random people will be wandering through our apartment, and--eventually-- we'll have to move out and find a new place. Argh. So many different issues to address, I don't even know where to begin.

There are two apartments in this house; one that's the upper level (where we live), and a smaller apartment below. If we buy it, we'll become landlords ourselves, having this second unit to rent out. The current tenant (who's lived there for eight years), is moving soon, so we'll have to find new tenants and all that jazz.

Money. Money money money money. That's what it's all about, right? Hmm. Has anyone else ever noticed that it's impossible to figure out how much a house will cost per month? Sure, you can run mortgage estimates to get an idea of principle and interest, but that's assuming that you know what interest rate you can get: the difference between 6% and 7% for the figures we're looking at is almost one hundred dollars a month. It's hard to estimate the home owner's insurance and property taxes that are rolled into the monthly payments as well. From my rough estimates, I come up with these ideas:

The mortgage payment will be more than what we're currently paying in rent. What we're paying, though, is really low for the area, so if we have to move to another apartment, our cost of living will go up anyway. If, however, we can get (and keep) the lower apartment rented out, we'll actually be spending less on housing than we currently are. It is imperative that we be able to afford the entire mortgage, independent of tenant rent, but I think we can. The asking price of the house, incidentally, is exactly the highest figure we were willing to consider back when we were actively house-hunting. That was assuming, of course, that we'd be responsible for the entire mortgage. With me?

We know perfectly well that house prices are falling, and aren't likely to recover any time soon. If we buy this house, we have to be prepared to hang on to it for several years, or face losing our investment. So, if we still decide to move away from Charlottesville in the next few years, we'll be looking at renting out the upper apartment as well. Oy. This is a college town, with more houses occupied by renters than owners, but we're pretty far from the school-- not walking distance. I don't know how easy that will be.

The house doesn't seem to need any work for now. (We should know, having been living there for the past 18 months...) It's structurally sound, the roof is good, the foundation. Still, Don and I are both nuts for house projects, and I imagine our homey ambitions combined with years of frustrated desires will cost us a lot of money, that will probably never be recovered.

We could finally fence the yard. Paint. Garden. ARggh, I just don't know. Can we do this? Do we want to? Could the timing be any worse, what with trying (AGAIN) to start a baby? My study would make an adorable nursery... We're still walking-distance to down town, and Don's work. Why don't I own a Ouija board, or at least an 8-ball? Who can answer these questions for me?

8 comments:

Rachel said...

Can lil pill and I rent the downstairs apartment and bring Einstein? :D

Mara said...

That would be awesome. Wait, who's Einstein? And are you anywhere near C-ville?

aquarian said...

Wow! what a great oppurtunity!

We just bought a house last year, and my advice is to do your homework!

I hope that everything goes well, the idea of having a downstairs apartment is awesome!

Anonymous said...

I have one word of caution. Beware. Far too often buyers purchase FSBOs thinking they are saving money since we realtors (and I'll be anonymous here, as I'm not out to get your business) are left out of the equation. Get someone (realtor or appraiser) to value to the property for you BEFORE you put in an offer. Investment property is not flying off the shelf in this market, and you don't want to overpay. That commission could be cheap compared to overpaying.

Anonymous said...

Oh,
Almost forgot... you do realize that if you have a lease on your apartment that even if your landlord does sell your house that you won't have to move? If you didn't know this, you need to consult with someone who can explain tenant rights to you.

Mara said...

Thanks for the advice, I appreciate your looking out for us! A few things, though...

Our landlord *is* a realtor. Don't know if that makes much of a difference or not, but he's selling the house for himself, so to speak. I know that doesn't really help Don and me much, but the LL knows the market much better than your average FSBO.

We never had a real lease-- no legal document. I always figured this was a great thing, because everywhere we've lived, we ended up moving too soon, breaking the lease, and paying big bucks for it. This time, haha! We could leave with just 30 days notice. It also meant, though, that he could ask us to vacate also with the 30 days.

As far as pricing goes, I'm comfortable with it. We've been house-hunting in the area for 6 months, so I know approximately what is going for what. The landlord is selling out of sheer necessity, and is trying to move the place as quickly as possible. (He's a home-builder *and* a real estate agent... not the two best businesses to be in right now...) This asking price is like 60% of what it was when he listed the house a few years ago-- there is NOTHING for sale in these parts for this amount, seriously. And that's not even thinking about the rental unit or anything.

Rachel said...

Einstein is the basset hound. LOL And no, I'd have to drive about 2 hours each way to work so maybe this wouldn't work too well. But it sounds so lovely!

Bex said...

well we still want to move :)