Last month (October):
Years left: 3
P =$1,042.82, I =$171.58, Escrow =$788.73
This month (November):
Years left: 2.75
P =$1,054.86, I =$159.55, Escrow =$788.73
One month’s prepayment savings: $7.90
Man, it sure is nice to be getting paid again. Beautiful beautiful paycheck. Bank account numbers are going up instead of down again. :)
I won’t find out whether or not I’m getting a half-paid sabbatical next year for several months. However, I may take the year off unpaid *anyway*. We have an awfully large savings buffer and DH’s company swears they have enough money to stay in business for the next two years even if they earn no more money during that time (and they’ve got grants out and products being made, so hopefully they’ll get more money). And DH is one of their valued employees. And he should be able to find new employment even if he loses his job depending on where we do the sabbatical.
There’s a lot of questions about where to go too, but I’ll defer that for a later post. All of the places, however, have a higher cost of living than where we are right now (which isn’t difficult!) Think double the cost of daycare, 1.5 to 2x the cost of housing for something much less nice than our current mortgage (even without the prepayment).
The hypotheticals I want to address right now involve the house.
We currently have 3 cats, one of whom still occasionally pees on a comforter or pile of laundry if we leave it out when she’s out and about.
Our house is also a superficial mess. Yes, the carpet in the kids’ bathroom is gone and the vertical blinds that were in the worst shape have been replaced, but that’s only the tip of the home-repair ice berg. The kittens literally shredded the master bathroom when they were still kittens. It will need to have the wallpaper completely removed, patching done, and paint. The entire house needs to be painted– it’s grungy and chipping in places and occasionally sports two year old art. There’s a sizable black ink stain in the carpet in DC1’s room that won’t go away with steam cleaning (it, in fact, just gets bigger every time we try). The deck needs painting. The screens need to be replaced or patched. The guest toilet is getting rusty. And on and on and on.
We are not allowed to rent to students by HOA rules. (Though we’re fairly sure there’s a group of students living down the street from us, but the HOA board is currently weak. When strong it has brought lawsuits to such houses and won against them.)
Our house, in theory, if it were in good shape, would rent unfurnished for $2000/mo. Though one year rentals may drop as low as say, $1600/mo. (Note, our required mortgage is $2003/mo, though as you can see the escrow and interest are under $1000/mo.) Storage for our furniture would cost something like $300-500/mo, give or take.
In bad shape, any house in town will rent for $1200/mo, possibly even $1500/mo. Our house would be a bargain at that price, even with stained carpet. Though we’d still have to repaint, I think.
We’re not sure if anyplace we go will allow 3 cats. Two, yes. We might be able to leave one of the cats at a relative’s place for the year (though the two black kittens are very attached to each other, and we’d be breaking that attachment– it is unlikely that a relative would take the incontinent kitten).
Our utilities range from $50/mo to $800/mo depending on time of year. Lawn mowing costs $35/mo, plus weeding $50/mo, but only during the growing season. Our lawn has to meet a certain standard or we get nasty letters from the HOA threatening to take our house.
Obviously we’ll stop mortgage pre-payment for next year if I go on leave.
So our choices:
1. Fix everything up, try to get market rate for the house.
2. Fix some stuff up (painting, but patch instead of replace screens, put a rug over the ink spot etc.), put the house on the market for cheap. Potentially offer a discount for renting it furnished rather than unfurnished.
3. Hire someone to house sit. Here we could either ask that they pay utilities and take care of the lawn or we could pay utilities and pay them to take care of the house and the two kittens. If we pay them, then we could get the house fixed up while we’re gone rather than this year when we’re both living here and busy. With infinite money we could even have the kitchen redone (except we don’t have infinite money).
So I don’t know. We have quite a bit of extra money in savings right now earmarked for home improvement (we’ve only spent ~$3K so far), though some of that may end up going for rent next year depending on what we end up doing. If we had a lot more money we’d pick option #3 no contest. But while we could afford that option (without the kitchen remodel), it would potentially drain our non-retirement/non-529 savings (when combined with our living expenses for next year).
What are your thoughts on the options? What should we be considering to make the decision?