Mid-Month Money Manifesto - Month 4

Month 4:  On Being a Landlord

One of the biggest changes over the last year was my decision to move out of the condo I own (well, technically I do not own anything because the mortgage is higher than the value of the home.  So I own a mortgage).  For those who are newer to my blog, I had been pretty miserable in my suburban condo for quite awhile and last year when I got back from Paris, I had an epiphany and realized that I could choose to continue to live in a home I didn't like or I could choose a different path.


I chose a different path and decided to rent out my condo and rent a place downtown.  Buying a place was not an option as I did not have enough money for the down payment.

I definitely took a more unconventional approach to my living situation, but it has worked.  I know there are people out there who view my approach as moving backwards in life, but I don't view it that way.  I am so much happier downtown, and while my housing expense has increased, it's been partially offset by a decrease in some expenses.  Like going from buying gas once a week to once a month, no longer needing a bus pass or a gym membership (my condo has a really nice gym), and paying $70/month less for cable/internet (which makes no sense to me but I will not complain!).

I do feel extremely fortunate to have a wonderful tenant who pays his rent on time (or early most months).  He takes great care of the place and said he plans to stay there until he buys a home. I hope and pray that he stays in my condo for years!

Being a landlord has not been too bad, but it's not the easiest thing either.  I had to figure out how to draft a lease agreement, run credit/background checks, and apply for a rental license.  I did all of that in the weeks leading up to taking my 1st CFA exam when I was already stressed to the max.  Filing my taxes was way more complicated/complex and I had stomach aches until I filed them as I was worried about how my taxes might be impacted (it ended up having very little impact, thank God, as I had all those medical bills to pay and could not handle a big tax payment on top of that).  And I have the added worry of knowing that some day this tenant will move out and I'll have to start all over and maybe the next tenant won't pay so promptly or won't take good care of the place...

But in the end, it's worth the stress - because I am so much happier in my new home and can't imagine living anywhere else.  Some day I will buy again, maybe in 2-3 years, but for now, I am content with renting.   I look forward to the day when I will be able to sell my condo and close the door on that bad decision, but in the mean time - renting it out is the right thing for me to do.  Financially speaking - I'd prefer to own the home I live in as renting is sort of like treading water, to some extent.  Right now I want to buy in the development  I live in, but I want to give myself 2-3 years to make sure this is truely the lifestyle I want in the long run.

But this whole renting out my condo and renting a condo?  It's definitely been a step forward in my life - not backwards.

Do you own the home you live in?  If so, are you happy you made the purchase or do you wish you had waited to buy.  If you rent, do you wish you had bought or have plans to buy?  I unfortunately bought at the peak of the market, right before it burst. It's a decision I completely regret, but I have learned a lot in the process, and I will be a much smarter buyer next time around.  I am hoping to be in the position to sell my condo in 5 years as I should have some equity at that point.