Reasonable Idea??

[BK2008]

I am almost thru my CH7 filing (7/15 discharge date).

I have still hung onto the house, although the $500 a month in gas/tolls are killing me.

I have people interested in renting my house, which will give me $100-150 a month cash flow positive, and then renting cheaper digs closer to work (5 mi radius), that will be $100 a month less plus a small amount in savings for water/trash ($70), not to mention the savings on the fuel/toll bills which could come out to 1/2 or more of what I am spending now ($250.00)

Does this sound like a good plan??

I am so tired from overthinking this whole situation. The only reason I am trying to keep the house is because I consider it 'forced savings' so to speak, and an asset that when the market eventually recovers, I will get my small amount of equity back. This house is 1.5 years old, and with a warranty program in place for the rentors, I should avoid most 'surprise' repair costs if the occur.

Thoughts??

[Flamingo]

The housing market is not going to change for quite a while and it will not come rebounding back overnight but gradually when the time comes. Your plan sounds doable and has savings involved. Change is hard for us to do when we are comfortable in a particular situation but gasoline is not going to come down overnight and this economy will last for a while. You have to do what you have to do during this time to cut back and save and your plan sounds like it will work for you.

My husband and I with both of us commuting every day spend at least $550 plus for gasoline each month; it's a killer for everyone. We no longer do any extra trips and combine errands in one trip or to/from work. You have to cut back somewhere...

[BK2008]

Yaah...I';ve developed the "No Driving Saturdays, No Sundays' program now.

The car sits parked. Anything I have to do, i do it on my lunch break during the week (groceries, fueling up, etc). Or the first part of Saturday when I have to go out (daughters orthodontist), trying to keep everything within my route.

This is the only way I can come up with for saving on fuel. Trading in the car is not an option, my payment will jump from $140/mo to who-knows-what, for a 4MPG savings..hardly seems worth it, and where am I going to find a $140/mo car payment on a car that's running great, and I'm getting 22MPG right now?

[BK2008]

My kids think this program sucks, no more 'cruising around', no trips to McD's playland....

They're now forced to go outside and play in order to relieve boredom.
And that, my friends, doesn't cost a thing.....

[Phillymanhere]

hey bk2008,

Hello to a fellow overthinker. I do that sometimes--though I am in recovery for it. I think your idea sounds fine, it's quite reasonable and smart. You save money and you put yourself in position for equity down the road. I don't see the downside.

Here's the deal: every decision comes with a risk. There is no guarantee that it will work out. But that's OK. Because our goal is simply to increase the chances of a good outcome. This seems like quite a good idea of how to decrease your expenses (increase income.) It may or may not turn out. But I don't see that you have increased the risk compared to staying where you are. (I'm assuming that the neighborhood you're moving to isn't dangerous or run-down.)

So as far as I'm concerned, this is a great decision, no matter how it turns out later. How it turns out, the economy, etc.--that's out of our control. But the thinking and planning we do to put increase our odds of success--that's in our control. And you also pick up some time--man, there is nothing in life better than some extra time, which should also reduce stress and hassle.

Sounds like you're well on the road to recovery my friend. Congratulations!

[BK2008]

Phullymanhere:

Thank you very much! Let me run some more logic by y'all:
Right now, my job isn't real stable. Not sure what's going to happen over the next 3 months. I currently live in a rural area, 30 miles + from anywhere.
While it's nice and peaceful, I am not in an area with a lot of employment, It is all down where I was looking to rent *a decent area*.

My thinking is:Take care of the house by having it generate income, and building equity at the same time.Rent an apartment while it is close to my current job, and in the event if becoming unemployed I am in a better position to get something else near the new place.I have reliable daycare near the new place (my daycare where I live is precarious, at best...i.e. She is getting married in September, wants a week off, but doesn't have a 'sub' to cover, wants to get paid for that week in addition to my scrambling around for a sitter for that week also at my expense,which is going to be hard to come by)*You;d think....if I had a daycare business, I'd be scheduling stuff like this in the summer, where it's a little easier to find someone, but during the school year...I can see my kids skipping school that entire week because I couldn't come up with sitters in the area. Just more carp to add to the pile. What's that saying, what doesn't kill you makes you stronger?? My daily mantra these days.

Those are the positives...all financial.
The drawbacks: I like my house, the peacefullness.Starting my kids in a different school (altho I called, and they have the same iep programs for them, so they would not lose anything, except their friends)If the tenant becomes flaky...

So what else am I missing?? Like I said, I am an overthinker, trying to cover all of the bases.

Thanks for letting me vent, sometimes it looks easier when you get the stuff out of the head and onto paper,

[MajorMike]

Did you say your home is only a year and 1/2 old??? How much is your mortgage compared to your renting it? You should get a LOT for rent if it's a new build.
We had a home in the South years ago...we built it, then moved and rented it out for double what the mortgage was.....

[Phillymanhere]

Bk,

Brother, you are not missing anything from what I can see. I think you're feeling something--feeling nervous about the change.

The only advice I could give to calm your nerves some is to make sure you spend time out in the area near where you want to live. Go there at night, go there in rush-hour (if you can). Observe and talk to people about it, which I'm sure you've done. I never will forget how a colleague of mind once drove through an area where he was considering buying a condo-he drove there at night to observe the parking situation (this was in a big city). Sure enough, he found the parking unbearable for several nights and he avoided that particular area and bought happily in another area not too far away.

As for the unstable job, I say get a start on looking now. Get your resume together, start making phone calls to colleagues for tips, start the search ... That way, you'll have made progress in the event of bad news in three months. That might be the way to give yourself "something to do" while you await the move. Just taking the first steps in the job search might alleviate some anxiety.

I'm guessing that it's this last piece--the potential job loss--that is the source of your worry and fear. I'm guess that that is what is worrying you, probably as much as the move itself. And understandably so, this economy is frightening to many of us. (By the way, as you make your way into the new community, be gregarious as hell. Go to soccer games, meet parents, teachers ... this can be part of the job search thing. You can slyly get the word out that you might be open to new opportunities.)

The other thing I wonder if whether you have made decisions like this before. This seems like such an extremely thoughtful (and cautious move), with upside from all angles. I'm wondering if making this type of really smart decision (and a dramatic one in moving the family) is new to you. Or if you've had good decisions like this go bad at some point.

If this type of decision is new to you, then your worry may be the static generated by change. You just may be shocking your old self by acting so smartly. Just laugh at your worry or politely talk to it. Get in some walks or exercise if you can. If you're religious or spiritual at all, this is a great time to devote a little time to that each day.

But I applaud your thinking--this is the kind of move I want to make in the future. I will file sometime this summer, most likely for chapter 7. I am now in the process of cutting all kinds of spending and changing my life. I see your decision described her as a model. Good luck! .... Go for it!!!!

[CindyLou]

Another thing you should consider is making sure you get quality renters! That will make all the difference!!

[deafbroke]

One thing I just began doing to save gas costs is to use a 50/50 mix in my car of E-85 and regular gas. It saves about $4 or $5 every tankful. Article in local paper two weeks ago said many people are doing it. If you still have a warranty on your car you don't want to so it as it will void your warranty. Car manufacturers say it will harm the fuel system but people that have done it for some time say otherwise. My car is an early 90's buick so I have nothing to lose trying it. So far my car has run just fine. No problems at all after 2 weeks of doing it. Doesn't sound like much of a savings but it adds up over time.

DB

[BK2008]

UPDATE: Is this reasonable

I have a couple that are going to rent my house. This is good.
I still have to run the credit check, etc etc.

But now, I AM IN A PANIC!

I went to check on the apartment that I wanted, and one won't be available for another month now. And the new people want it the first week of July.

AND....the rent went up! It is now $80 less that what I am paying in mortgage.
But I will still be cutting on fuel/commute costs, altho my sitter costs will go up by $50 per month in the summer months to $200/wk.

My gut feeling....is to cancel the whole thing and stay put for as long as I can.

Advice, please...I am so tied up in knots about the BK, and now this...
Maybe I should just sit in it and let the foreclosure games begin!

[CindyLou]

Ok, take a deep breath! Sit down and write out exactly what your NET savings will be once you rent the home, make the move, pay the movers, new deposits, etc.....

Also, do you have a plan to pay for repairs, upkeep, etc....

Anyone who rents our their house should also be able to have at least 3 months mortgage in reserves to make up if they place goes unrented. I'm not trying to discourage you but just asking that you take a realistic look at the situation and make your decision based on numbers and facts.

Another thing to consider is if you stay in the house and ride out the foreclosure then you would be able to live rent free for a while and maybe save a few bucks???

Ughh...I know its stressful. But just try writing things down and then looking at it without emotion.

[BK2008]

Then I have failed that test. I will be in a negative after I figure in the movers, deposits, etc. Moving will pretty much wipe out my entire savings

No, no way do I have any reserves for mortgages or repairs.
In fact, my job is real unstable, I am not sure if I am going to be working by the end of the month (Ergo, try to save the house...but then again, why?? I am in BK!)

I'm thinking, this whole thing may not be such a hot idea after all.

[Cali]

If you are going to be negative and have no reserve, why are you moving?

[BK2008]

'Trying to save the house', so that maybe I will have something when I get older.