July Mortgage Update: Renting a house for a year is a pain

This month (July):
Balance:$22,465.56
Years left: 1.6666666667
P =$1,121.04, I =$93.36, Escrow =$809.48

Last month (June):
Balance:$23,586.60
Years left: 1.75
P =$1,116.62, I =$97.78, Escrow =$809.48

One month’s prepayment savings: $0

We put our house on the market for under the market value.  We gave a $200/mo discount on top of that for a family to rent it furnished rather than unfurnished.  We only advertised on the university web-page and on sabbatical homes and the MLS.  No Craigslist!

A family from overseas contacted us right away.  They had their local friends look at it.  We had a brief discussion via the internet wherein the husband tried to bargain us down from the listed unfurnished price, not understanding that we were renting it for less than what he was trying to bargain it down to because he wanted it furnished.  The wife and I discussed daycares and leaving DC2’s outgrown clothing and toys since her child is a year younger and how much cheaper water is in the US than in her country.  We put the husband in contact with our real estate agent.  We hammered out all the details like dates.  The wife contacted the agent with a lengthy list of demands of things she wanted cleaned before they got here (all of which we were planning on doing anyway) and a demand that we get rid of some of our paper blinds which she thought were grey and covered in dust from her friend’s video, but are actually peach and what she thought was dust are shadows from the pleats.  We said no to replacing the blinds.

I got a few more contacts from less desirable prospective tenants (two dogs and a cat kind of less desirable– our HOA only allows two pets, or people needing the house for less time or wanting to bargain us down more), but they didn’t contact me back when I said we were in conversation with another family.

And then nothing for a few weeks.  With the end of the school year etc. we didn’t really notice things weren’t progressing, but once that settled down we wanted to nail things down.  We contacted our real estate agent, who said things were progressing.  And then a week later things stopped progressing.  So the real estate agent sent a firm email noting he’d been turning people away from looking at our house, and that activated some action from our prospective tenants, the irritated full professor noting that he is a very busy man in the middle of organizing a conference.  Which is no doubt true, but he really should have taken care of the lease before the conference!  He sent the background check information and passed the check.  And our agent sent the lease to sign both electronically and in pdf form (in case the electronic version wasn’t working).  And… then nothing.

So then our agent stopped turning other families away from looking at our house which meant we spent some time outside at the playground where it is very very hot.  The first new family to look at the place texted right away and said they loved the place.  They wanted it for the full time and they wanted it unfurnished (so another $4K for an additional 2 months + $1200 to rent unfurnished instead of furnished + the utilities we wouldn’t be paying those two months… but also plus hassle, storage, and potential breakage) and were willing to give us a deposit and signed lease right then and there.  We gave the family we had an agreement with until the weekend was over to get us the signed lease and deposit or we were moving on.  And they did.  So we turned the second family away and took down the sign on our lawn and the listing off sabbaticalhomes.

Hopefully this will all work out!

I do think it helps that we listed the place under market price and that we had two prices for furnished vs. unfurnished that reflected our desire not to move our stuff into storage.  We have more money than ability to deal with hassle these days, and it’s nice being able to just say, screw it, we have the cash for this, we can take a risk or pay to not have to deal with something.  Me five years ago (when DH was still a tenure track professor) would have been freaking out at every point, and we’d have had a higher listing price.  And I can’t even think what me when DH was between jobs would be doing.

Wish us luck!

Have you ever acted as a landlord, temporary or otherwise?

Thoughts on professional cleaners

After putting our house on the market, we hired professional cleaners because we couldn’t keep up with keeping the house spotless on top of everything else.  Normally we live in squalor and we’re fine with that (so long as there’s no mold or anything growing).  But when you’re regularly showing a house and the people you have a verbal agreement about the lease with drag their heels for a month, it’s best not to have deep cleaning on the list of things to constantly worry about.

The first person we tried charged $120/session (so ~$60/hr), which we would have been fine with if she’d done a good job cleaning.  But she didn’t.  There were crumbs on the dining room table, dust on the bookcases, toddler hand prints on the windows, cat hair on the carpet and in tumbleweed form and on and on and on.  I came home and couldn’t tell anybody had been there to clean, except she’d apparently spent a large amount of time scraping soap out of a soap holder (but not cleaning any of the rest of the shower).  Even more than I hate spending money on things I don’t value, I hate spending money and not actually getting what I don’t value.  I hate paying someone a lot of money for something I could do myself and then I have to do it anyway.  If I’m paying a lot of money, they should do as good as or better than I do.

So then we tried a local agency (that everyone who doesn’t use the lady we tried first uses), bonded, insured, etc.  $175 for the first clean, $100 for a weekly clean.  They left the place mostly clean and I could tell things had been cleaned when I walked in the door.

$100-120/week is $400-500/mo is $5000-$6000/year.  We could give someone at DC1’s school an 80% scholarship for $6000/year.  It’s such a waste for something we don’t even need and I don’t even get to feel noblesse oblige about paying for it because most of that money is probably going to the owner of the company– the women who actually do the cleaning are not getting $100/clean.

Also I don’t like the smell of cleaning products.  And it lasts for two days after they’ve come.  And a few times they’ve come after 5:30 on Friday, which means I’m home while they’re cleaning which hurts my midwestern sensibilities– I feel like I can’t just kick back and relax (or make dinner because they clean the kitchen last) and I should be cleaning too, which is ridiculous.

So that’s me being grumpy.   DH, of course, likes having the cleaners, probably because he’s the one who usually does the bulk of the cleaning given my dust allergies.

Do you have someone clean the house?  Do you love it?

Foods to make at a party

For all you 20-somethings who still have lives… or for folks with older kids… here are some food-making party ideas.  As in, during the party you cook as a group.  These are a little more complicated than putting out cold-cuts for people to turn into sandwiches.  Most of these are pretty inexpensive party ideas too so um, how about a money Monday post?

Pizza — As RAs we did this during finals week and we’ve had small parties/large playdates for our child starting pretty young (maybe 4 or 5?).  We make the pizza dough (you could buy it instead), put out spaghetti sauce, shredded cheeses, and toppings.  Folks assemble their own personal-size pizzas.  We bake them.  Relatively easy and even adults seem to enjoy it.

Cookies — you can make the cookies in advance and just frost (similar with cupcakes), or for older kids, you can have them help with cutting/shaping dough.

Sushi — we haven’t done this en masse but know people who have.  We only have one sushi making kit, so DC1 has done it with a friend over, but not with more than one person.  Seaweed, sushi rice, and fillings and you’re good to go.  I bet you could make things other than rolls without more sushi kits.

Vietnamese fresh rolls — DC1 has done this with friends over before too.  Similar to sushi, only you need a big bowl of warm water to soften up the wraps.

Wontons — We went to one of these in graduate school.  The hosts had wonton wrappers, fillings, and egg-wash ready.  Guests stuffed, folded, and sealed.  The hosts cooked the filled wontons (in this case in a soup, but in high school I vaguely remember we deep fried them one time since I had a fryer and we didn’t have ovens or stoves).

Taffy pull/popcorn balls — I used to have taffy pulls at my birthday parties growing up.  They are sticky and messy and fun, but kids do grow out of it I think.  (#2 had this event THIS YEAR at a new year’s party and it was all adults doing it.)  My mom would make the candy, then we’d let it cool enough to touch.  Kids would wash and butter their hands and then pull the candy until it was stretchy and cool.  Popcorn balls are similar, but with butter handed kids shaping sticky popcorn/candy into balls.

This is not cooking, but maybe is frugal: #2 just came up with the idea of a booze-trade party.  “I have this two-thirds full bottle of gin I’ll never use.”  “Cool, I’ll take it!  A friend gave me this tequila and I don’t drink tequila, who wants it?”  “I’ll trade half my six-pack for half of yours and we can both try them both!”  “This bottle of vodka was in our freezer and my roommate moved out, it’s up for grabs.”  “I need 3/4 of a cup of Grand Marnier for a dessert but I don’t want to buy the whole bottle, who can hook me up?”  Doesn’t that sound great?  Maybe?  Or it could be just an exchange of weird foods that you bought for one recipe but you’ll never use the rest.  Black rice?  Fenugreek?  Turmeric?  (You should use turmeric though, it’s cool.)  It cleans out your kitchen guilt-free!

Have you ever been to a cooking party?  Cooking what?

Renting in paradise, an update

I’m afraid to post this and almost afraid to write it, but we’ve sent in a deposit for a place in paradise.  How did we do on our priorities?

1.  I will be able to get enough sleep at night– no thin walls, no cigarette smoke.  (Also non-crazy landlord, but how does one screen for that?)

We ended up with half of a duplex that has a staircase separating the two parts, so it’s more like a townhouse.  There’s an empty lot with trees on one side and a house on the other side.  It’s also on a busy street, but I think I can handle traffic noise.  The landlord seems laid back and our friends know the tenants who are moving out (who are moving out because they bought their own place).

2.  At least 2br.

Exactly 2br.

3.  In unit laundry.  Dishwasher.  Reasonable appliances (though we can always buy cheap ones).

Laundry is in the garage.  Dishwasher in the kitchen.  The other appliances seem reasonable, though my in-laws have their stove and it’s not my favorite.  (It’s that electric kind with the glass top so it’s easy to clean, but not that much fun to cook with.)

4. In a decent to good school district and DC1 can stay grade-skipped (or they want to test before keeping the skip– I’m fine with that too).

The elementary school will allow DC2 to go into 5th grade.  It’s a 9 star school with a good mix of demographics and SES and not 100% white or wealthy.  Languages are optional and expensive after school ($500) and I don’t think they offer band or anything like that (update:  there is a musical instrument option offered through the school from a local non-profit), but we’ll see once we’re allowed to actually register.

5.  We can keep at least our main kitty, little kitty.

Cats allowed!

6.  A reasonable commute to:  Sabbatical Uni, DC1’s school, DC2’s preschool, given that we will only have one car.

7 min walk to DC2’s preschool.  It’s an hour and some round-trip if DH walks to drop both kids off, according to google.  There are some other options, including having DC2 bike hirself, or walking to the closer school and taking the bus ($700) to the assigned school, but we’ll figure that out.  For me it’s about a 30 min bike-ride or a 40 min drive (20 min without traffic…) or a 40 min bus drive (20 min without traffic).

7.  Walkable neighborhood that includes a playground.

The playground is across the street.

8.  Allows us to take Nice kitty

Allowed!

9.  3 br

Bzzt.  Only 2br.  :(

10.  Walking distance to a library

Yes!  7 min walk.

11.  Walking distance to shops

Yes!  Like, right around the corner distance.

12.  Excellent schools (as opposed to decent)

9 star is pretty good.

13.  Driveway or garage space, not just street parking.

One car garage and driveway.

14. Out door play area such as yard.

Bzzt!  There’s basically a dog run.  But hey, there’s a park across the street.

15. Furnished.

Bzzt!  I hear Ikea is cheap.  Once we have this lease thing figured out we will ask if the current tenants want to sell us any of their stuff.  Figuring out how to get other stuff over there is, of course, a bit of a nightmare problem we’re still trying to figure out.  (Like, we have to take the piano, but what about mattresses?)

16.  More than 1000 sq ft.

1200sq ft.  We had an apartment in grad school that size at the very end (using the money we’d saved being RAs for two years) and it seemed enormous.  It will probably be less enormous with two kids.

17.  Nice appliances.

Bzzt!

18.  Nice extras (countertops etc.)

Bzzt!

19.  Fruit or nut trees.

Bzzt!

20.  A price considerably lower than 5K/mo.

This place was listed for 4K/mo.  I don’t know what our friend out there told them, but she sweet talked the landlord into thinking we’re so amazing she should cut an additional $100 off the rent.  Also some additional utilities are included in the rent because it’s a duplex.  So instead of paying close to 5K, we’ll be paying just under 4K/mo.  That means I’m feeling a bit more relaxed about money, especially with a month of summer salary also happening.  If our house rents out, we’ll be able to make our savings goals!

And as an added benefit, since our friend did such a great job talking us up, if this all goes through, DH won’t have to spend a week of his vacation time apartment-hunting.  So he can spend it doing moving stuff instead.  :)

June Mortgage Update: And 1K interest left

Last month (May):
Balance:$24,703.22
Years left: 1.833333333
P =$1,112.22, I =$102.19, Escrow =$809.48

This month (June):
Balance:$23,586.60
Years left: 1.75
P =$1,116.62, I =$97.78, Escrow =$809.48

One month’s prepayment savings: $0

I’m now at the point in the loan where the amount of interest left to pay is almost exactly $1K. So if I paid it off today, I would save about $1K over the next 1.75 years. (If my calculations are correct, that’s an effective interest rate of less than 3%.) $1K seems like a lot of money, but it actually isn’t that great of an investment on $23.5K. Depending on the vagaries of the stock market, I could be making more like 3K on that in a retirement account or 529 plan. Of course, that isn’t a risk-free 3K. I could lose all 23.5K, though that’s pretty unlikely (losing some amount is less unlikely!).

Of course, most likely I’m not putting that money into the stock market. Most likely I’m spending it on riotous living over the course of a year long research leave. I guess that’s worth 1K to me. We’ll see!

In my situation, would you pay off the mortgage to save the 1K, invest the money to hopefully get more than 1K in earnings over that time frame, or spend that 24K on daytrips, sushi, and rent for a house someplace walkable (or possibly part of a kitchen remodel when we get back)?

Health insurance options revisited

When I’m on half pay, I have to pay for part-time benefits instead of full-time benefits which means the university contributes a lot less and we need to revisit our insurance choices.  Previously we’d opted for the family plan from the university which was a bit less expensive than the other options from DH’s company (partly because DH’s company’s plan covers a lot more stuff even if it’s not any more generous with copays or coinsurance).

This year, just to make it difficult, DH’s company has added a second health insurance option.  We can do either their PPO or their HSA.  If this were a “we have lots of extra money” year, the HSA would be tempting on the basis of the way they act as additional tax-advantaged long-term savings.

Based on my calculations the cheapest monthly payments are:
1.  DH’s family HSA:  $494.06
2.  DH cover himself and the children with the HSA I take my insurance:  $584.41
3.  DH’s family PPO:  $611.88
4.  DH covers himself and the children with the PPO I take my insurance:  $660.87
5.  DH covers yourself with the HSA, I cover the children:  $701.09
6.  DH cover yourself with the PPO, I cover the children:  $742.43
7.  I cover the family:  $791.74

Of course, these plans all have different copays and different deductibles and different coinsurances. With only a fraction of the full-time subsidy, my plan is just flat out dominated by DH’s PPO, so we can throw that out. The HSA costs more every time it is used and has a higher out of pocket limit than DH’s PPO.  All three plans have exactly the same provider networks.

So, the difference in monthly payments between DH’s two family plan options is $1413.84 annually. If DC2 stuck a pony bead up hir nose, it would be $3000 + possibly another $170 for the emergency room trip under the HSA and $500 + possibly another $170 for the same trip under the PPO-500.

Do we want a sure savings of $1400 vs. a potential additional cost of $2500 for one emergency trip? That’s a potential out of pocket loss of $1100, not counting the unknown costs of doctors visits under the HSA.

The final piece of information is how office visits are treated.  From the literature they gave us, it is clear that preventative visits are free and office visits for sickness are $25 under the PPO.  With the HSA it wasn’t clear if we had to pay for the entire visit up to the deductible or if they were free without copay.  That could make a very big difference when you have two kids going into a new disease environment for a year.  After googling and looking on the plan’s webpage only produced information from 2009, we called up.  And were told to call again the next day during business hours.  After a lengthy discussion the next morning we determined that we would have to pay the entire negotiated rate for an office visit under the HSA and just the $25 copay under the PPO.  The numbers the lady on the phone threw around for predetermined office visit rates were something in the 100 range, though she wasn’t quoting anything.  (Online rates range from $65 to $380, but I’m guessing the negotiated rates are in the $100-$200 range.  Who knows!)  Because we have children, it’s likely that we will have to visit the doctor’s office for more than just the one annual allowed well-child check-up.

Assuming no emergency room trips and that an office visit is $150, then we would need to visit the doctors office 10 times while sick over the course of the year before we lost monetarily.  Assuming a $200 trip, that would be 7 visits.  Those assumptions put the HSA in as being more beneficial.  But, thinking about it another way, we will need to have at least two visits under the HSA because you always need doctors visits for school and preschool and DC2 won’t quite be three yet meaning ze won’t have tripped onto the allowed annual well-child check-up and DC1 has already has hirs for the year.  So that would really only be a savings of $1100 under the HSA or perhaps $1000, given higher office visit costs.

Really it comes down to risk.  Will DC2 need to use the emergency room?  Will we be way more sick?

We can afford the $3000 HSA max should the worst case scenario happen.  But a sure loss of ~$1000 also isn’t that big of a deal to us if it pays for peace of mind.  Having an HSA account would be nice, but it would also be a hassle given that we’ll only contribute to it for the one year (since my insurance will be more attractive once I’m full-time again).

After a long discussion with DH, we decided we’re risk averse and, more importantly, hassle averse.  We think chances are very high that we’ll be out $1000 for the year but we’d rather not have to think about how much the doctor costs in advance of a visit or what bank to use for an HSA that we will at most put $3000 in.  So, we’re going for the PPO, even though financially the HSA would make more sense.

How do you decide between insurance options?  Do you get any options?  (And are you like me and would prefer not to have options?  That ‘more options is always better’ part of microeconomics is such bunk.)

 

DH discusses cell phone plans

Overview:

I’ve assumed we want two smartphones with at least some 3G or 4G data.

Smartphones default to wifi, so when we have wifi access any data should not count towards plan limits.

[ed: With our flip phones and no data we currently spend $84/mo including fees and taxes because people keep texting us.  Without the texting it would be more like $78/mo.]

Considering two extremes…
We can get as low as $50/month plus fees & taxes for 6GB data each using Republic Wireless on the Sprint network (i.e., same network we use now).

If we go for the best network, we’d be paying Verizon $90/month plus fees & taxes for 1GB data each per month.

Details:

This website has pretty good overviews.  Here’s some more info about coverage.  Also here.

Verizon has the best network in general.
AT&T seems to be second-best network in general.

If we bring our own phones, then Verizon has a 1GB “prepaid” plan for $45/month.
So that would run us $90/month plus taxes & fees for two lines.

Verizon’s contract plan (in which they subsidize the phone cost and we’re locked-in for 2 years) would run $120 / month for two lines and 2GB shared.

AT&T has a similar setup for Bring-Your-Own-Device of $90/month for two lines ($25/mo/phone plus $40/mo for 3GB), and it would be $120/month on a 2 year contract with subsidized phones.

T-mobile doesn’t have contracts, though one can pay off a device over 2 years like with a contract. They would be $80/mo for two lines with 1GB each. Interestingly, once you hit that limit you can still get data, it’s just really slow, whereas almost everyone else charges you an additional $15 for the overage or just cuts you off.

Sprint’s prepaid is $70/mo for two lines with 1GB each.

It’s unclear if Sprint’s family/contract plan has any options, but it looks like it would be $90/month for the first year, then $120/month after that.
Another factor is that Sprint has a discount on our account of 15% because of our university connection.

Then there are the MVNOs, which are services that use another company’s network.

Republic Wireless. Uses the Sprint network. No contracts. Extremely limited in phone selection. Calls automatically switch to wifi whenever possible. A flat rate depending on whether we want wifi + cellular talk & text ($10/mo per line), wifi + cellular talk & text + 3G data ($25/mo per line) or wifi + cellular talk & text + 4G data ($40/mo per line). So we could both switch to this now and pay $20 per month (plus tax & fees) instead of our current Sprint bill which would effectively give us smartphones around wifi and dumbphones away from wifi. The call quality might even be better since it’ll default to wifi instead of the poor reception we get indoors. The plans can be changed up to twice a month, and they prorate the bill.

Ting. Depending on the phones we use, Ting will use either the Sprint or T-mobile networks. It doesn’t offer unlimited talk or text, unlike everyone else, but charges each aspect based on buckets at the end of each month (and then an incremental cost past the last bucket). Ting has the potential to be the cheapest plan, but we would have to keep an eye on minutes, texts, and data, to make sure we didn’t bump up into the next bucket. For example, 500 minutes, 100 texts, and 0.5GB would be $36/mo, but add another minute and another 0.001GB and it’d be $52/mo. If we go over 2GB data the bill goes up quickly. Based on our history, we’d be paying $33 – 62 / month depending on data usage.

Cricket Wireless. Uses AT&T network. $70/month for two lines with 2.5GB of high-speed data, then throttled data after that.

Freedompop. I don’t trust them. Their website broke when I was trying to view their plans, and they required an email just to see their plans. Then, they prevented me from using a mailinator email account, which is ridiculous because the majority of people that use mailinator (to avoid exactly what Freedompop was attempting to force me to do) know that there are many domain names that forward directly to mailinator, so I just used the forwarding domain name that was prominently displayed on the mailinator webpage at the time.

Project Fi is invite only.

Review:
Republic Wireless is interesting in that it’s a low flat rate with the catch is that we can’t go over 6GB of data used away from wifi. I doubt we would since we spend the majority of our time with wifi access.

Ting is not as appealing, even though it could save us up to $17/mo over Republic Wireless, because I don’t want to have to keep a sharp eye on usage. I think we’d end up around $45/mo, but then be anxious about using data during trips.

Verizon’s network sounds great. The bill would not be so much more than we’re paying now for dumbphones. In the end, I think we just don’t use our phones enough to make the extra cost over Republic Wireless or Ting worthwhile. Maybe once we have smartphones that will change, but who knows.

Ed:  None of these are affiliate links.  #2 would like to put in a plug for Credo Mobile, because they have a social justice bent.

What will we do?  My best guess is nothing.  We will continue to put this decision off even as other plans that offer more than our current plan get less expensive.  My best guess is that eventually one or both of our phones will break and we’ll go through this process again and actually make the switch at that time.

What do you all use?

Follow

Get every new post delivered to your Inbox.

Join 291 other followers