Or maybe they’re all wrapped up in one? See, now I’ve gotten myself all confused again.

We swore we’d never be long-distance landlords again.

We’re considering renting out our house, something we swore we’d never do.

Some local friends/acquaintances are wanting to move out of the home they are in, for very personal reasons that are none of your business, and they would like to rent a place in this part of town for the next three years, after which they are considering moving out of Ohio altogether.

I hadn’t seen this particular friend in quite awhile. For our first couple of years in Ohio, our sons were inseparable. They became fast friends, literally, Conner’s first day of sixth grade, which he started one week later than the rest of the school because we were still scrambling to close on this house and settle in to our life here after moving from Italy.  Conner just needs that one, good friend, and he’s good to go. And Mitch became it day one.

But Mitch also plays soccer, “Lifestyle Soccer,” I call it, because Ohio has hard-core year-round soccer teams that travel for tournaments all over hither and yon and it really does consume your life. We’ve donated our fair share to the door-to-door fundraising cause.

So the boys remained friends, but they don’t see each other much outside of school anymore. Mitch got busier with soccer and his soccer friends, and Conner started hanging out more with another friend in the neighborhood, who has since become a semi-permanent fixture in our home. (When Conner’s not at his.)

Chance Encounter

All this to bring me to a random encounter with Mitch’s mom a week or so ago, after not seeing her for ages. We talked about this and that and the other, like women are good at doing, and I thought she was just being thoughtful when she sent me a message later telling me how nice it was to chat again, how sorry she was that we hadn’t been able to sell our house, and had we thought about renting it out?

Well, she wasn’t the first person to ask us that question, so I replied, “Why, are you interested?”

Ha-ha, and all that. Turns out, she was.

We’ve been talking back and forth for the past week, about numbers and other important things. I’m expecting to hear from her today to find out if they’re officially ready to move forward. She and her husband have been working on some details on their end, to make sure this is going to work for them and it’s really the best thing for everyone involved. Theirs is a sad and complicated situation, and moving would give them much-needed hope and a desperately needed fresh start. And just to clarify one thing, their problems do not involve a bank or any other financial institution.

Whether or not this moves forward we will find out soon enough. If it does, I feel like we will both be helping each other out, and I can’t help but wonder if this is why our house hasn’t sold… What are the odds we run into each other the week after we take the house off the market?

 If we decide not to go forward, we’ll simply return to the originally scheduled programming and put the house back on the market, as soon as next week.

In the meantime, I’ve been checking on the housing availability in Monterey, and it’s not looking good at the moment. However, it changes daily. We’ll just have to keep calling to see if anything new becomes available. In true government form, there is no waiting list or any other system in place that allows us to secure housing any other way. Even once they get to know you on a  first-name basis because you’re calling every day, they are not allowed to take the initiative and call you first. First-come, first-serve, baby. It’s a dog-eat-dog world out there. Welcome to the military, we hope you enjoy your stay.

I walked through our saga of how we became reluctant landlords of a rental property in Las Vegas over at The Man J.D. Roth’s blog Get Rich Slowly. Go on over and check it out! (Please?)

And if you found your way here for the first time from GRS — welcome! I hope you’ll pull up a chair and stay awhile. We don’t always have such grandiose tales to share of woeful financial mishaps — but our lives are never dull! And I’m having a blast documenting (most of) the financial details on this blog and sharing our journey with all of you. Not only does it motivate me to hold us accountable; I learn so much when you all share your stories with us, too. I think of this blog as the place where I can talk about that taboo subject of finances and my audience won’t shirk away in horror.

I hope you’ll check back in again soon! You can subscribe via RSS or by email (look on the right sidebar). You can also follow me on facebook and twitter.

…when you discover that one of them is actually a stalk of corn.

Corn and Life and Loose Metaphors

I have no idea how a corn seed blew into that our yard. None of our immediate neighbors have gardens. We aren’t terribly close to any fields. How did it flourish? We’ve barely had any rain in weeks. Is it edible? Is it corn for feed? No idea. But there’s at least one ear growing so we might find out.

Or maybe I should just yank the whole thing out by its spindly spider roots and be done with it. It doesn’t belong there: it’s probably an eyesore. But what do I know? Lately, less and less, it seems. And how long has it been there, anyway? Has it really been that long since I’ve paid attention to this side of the house?

This feels like such a metaphor for my life right now you have no idea. Oh sure, I sort of saw something large sprouting up by the house whenever I’d pull in to the garage from that side of the street. But I assumed it was just some weed gone wild. Not something that normally requires, you know, planting.

Bear With Me Here

We are trying to figure out what we will do if we do not sell this house by the end of the year. John reports to his new assignment in November no matter what. Do we join him in California in December as originally planned? Or do the kids and I stay in Ohio and wait and see what happens with the house? Do we *gasp* consider that perhaps this house could serve as (yet another) rental property, even though (yet again) that wasn’t our original intention when we bought it?

To Recap

We thought we’d be in Ohio for four years, at least. Four shrunk to three. And who would have predicted the continuing (and worsening) downturn in the real estate market? No one is buying, it’s as simple as that. Least of all military folks moving into the area. For some reason, everyone’s scared and wary. For those of you who have suggested we get a new realtor, I do appreciate the advice. We have discussed that and we’ve also looked around and talked to lots of people. Thing is, no one’s house is selling: not the $90k ones; not the upscale ones for $500k. It’d really be a stretch to blame this on our realtor. We’re coming up to the end of our six-month contract: if we wanted, we could take the house off the market and put it right back on and the results would be the same as switching. We’ll see.

For now,  we’re trying to figure out what our Plan B is. Or Plan C. Or K. It’s getting hard to keep track, in so many different directions do our minds take us.

Our Options as We See Them:

• Do the kids and I stay in Ohio until the house sells?
• Do we join John in California in December and leave the house empty until it sells?
• Do we stay until we find a buyer or a renter, whichever comes first?
• Do we put the house in the rental market and see what happens, but leave in December no matter what?

That Crazy Rental Business

The latter option requires so many details to plan and put in place it makes my head spin. One thing’s for sure, if we rented out this house, it would be with our eyes wide open. I know just how much work, and how many people employed to help you, that owning a rental long-distance requires. We’d really much rather sell the thing and be done with it. But are we just jaded from our experience with our Vegas rental? The market here in Ohio is much more stable, the people much less transient (to say the least). It may be that we’ve learned things the hard way and could apply that knowledge to a rental property in a market that’s not so volatile.

I am very interested in what you all have to say. I’ll leave you with just one more metaphor, from an image that has been greeting me near the entrance to my bedroom for the last several days.

John had some fun with some toys the kids left in our room, along with some acorns that were scattered across his dresser. (Doesn’t everyone have random stashes of wild nuts strewn about their house?) We both can’t believe the set-up hasn’t fallen or otherwise been knocked down. It cracks me up every time I see it. It’s like it’s saying “I will prevail!” and seems to portray the essence of taking lemons (messy toys) and making lemonade (a creation) that refreshes and invigorates.

Okay, maybe that’s stretching it a bit. But it does make me smile whenever I see it. And right now that’s enough for me.

I’m not sure if that really makes sense. Just work with me here.

The Hubs is Home!

As of Friday night, well after Olivia and Peter were in bed. But it was nice for Conner to have his dad all to himself for a bit.

Hubs slept fine that first night, courtesy of complete travel exhaustion. The little ones didn’t even wake him up right away — I think they forgot he came home! Peter finally remembered his excitement about a purchase we’d made at the Thrift Store a few days prior — we’d scored a brand-new Bionicle for $3.50 ($12.99 at your local Tar-zhay), unopened, still in its box. He could hardly wait to open it, but I told him he had to wait for his daddy to get home. (Of course, this was before I realized how many flight delays he’d have.)

Imagine waking up to a little guy breathing in your face, “Daddy! I have a Bionicle!”

Silly daddy, he thought he could hold off building it for a day. I think he lasted two hours before breaking down and just getting it done — with quite a bit of help, it turns out.

Hubs took a break to make some bacon — ooh, he missed his bacon — and turned around to find that Peter was doing quite fine on his own.

I knew that little guy’s destructive tendencies inclination to take things apart would someday turn into putting things back together.

Our House is For Sale! Again!

Oh, what — you think I jest? Or just didn’t think that could happen? Ha! There’s never a dull moment around here, I tell you what.

The buyers for our house are also selling their house. They had buyers for their house, but that contract just fell through because their house appraisal came back $30,000 less than the sale price — effectively canceling their buyers’ loan approval.

Follow?

So we’re releasing our buyers from our contract and putting the house back on the market.

Did I mention that our buyers were representing themselves? As in, they’re not working with a realtor but trying to sell their house By Owner. It doesn’t seem to be working too well.

Our Rental Property is Vacant! Again!

Remember those tenants we just got? Yea. They bailed. And we’d just gotten our first full rent check… It’s actually a sad situation, though, as our property manager thinks that domestic violence may be to blame.

We did briefly entertain — again — the thought of selling it. Until we saw the comps. Yea. They still suck rocks.

In other news — we still don’t have orders, but the class The Hubs will be attending is still starting in November. Right now, we’re thinking he will go on ahead and the kids and I will stay behind to at least allow Conner to finish his semester. His first semester of high school. *gulp*

Yes, homeschooling is still on the table. I’m looking at that first semester as an opportunity for more time to prepare, so it’s all good. Now I just need to get a handle on how to go about homeschooling a high schooler… Compared to that, a second grader and kindergartner seem like a piece of cake.

Oh, and we’ll also have to see what ends up happening with this house — and where we might be living. You know, minor details.

Like I said, never a dull moment around here.

Rental Property

Remember how we recently rented out our rental property in Vegas? Right after the new tenants moved in, our property manager notified us that the water heater wasn’t working. Yea. So I’m thinking, “So much for our first rent check.”

Good news! We have enough money left over in our property management account from the last tenant’s security deposit to cover the $850 bill.

Of course, we no longer have that cushion in our account — leftover because the last tenants broke their lease and thus did not get their deposit back — but we also avoided having to pay for it out of our personal savings. Phew.

Auto Issues

The Hubs drives a ’99 Toyota 4Runner — when he’s not deployed, that is. I drive the lean, green, mean machine: aka, a 2002 VW Eurovan. Both of them are doing strange things right now. You might recall my mentioning that I am clueless about cars. Clueless.

I drove the Van today by the shop where we get the oil changed to tell them about this mystery (to me) light that’s been coming on now and then for the last two or three days, complete with a piercing buzzer-beep screaming at you, “Warning! Warning! Do not ignore this red light!”

Turns out the light’s for the coolant, which seems to be fine — at least the temperature gauge shows everything’s fine. So it’s probably some kind of electrical short. But what if it’s not? What if the gauge is malfunctioning?

That’s the gist of what the guys at the shop told me, anyway. They couldn’t actually know for sure without the light actually being, you know, on. Which it wasn’t at the time. Of course.

And it hasn’t come on again since. So maybe it is just one of those electrical flukes?

The 4Runner makes a really loud noise whenever you start it. It lasts about ten seconds and then stops. My best, completely uneducated guess, is that it’s the fan belt. Or just something to do with the fan. It sounds a bit cranky right when you turn off the engine, too, like when the engine is still cooling.

Have I mentioned I know nothing about cars?

So I need to get the 4Runner over to the Toyota place. And I need to call the VW dealer and see what they have to say. Normally, we would avoid them…  $$$ …. But the mechanic from the shop followed me out to the car and did a sort of between me and you thang that a dealer would be the best route to try first because they might actually know exactly what’s wrong right away, thus actually saving me in the long wrong from being charged by the hour for the regular shop to tinker a couple two hours or more.

Now I just need to figure out which of my friends to hit up to help me drop the cars off, one at a time, at the respective dealers. Or maybe the dealers will provide transportation for me to get back home? Sigh. Have I mentioned that The Hubs normally deals with this stuff? I’m feeling like such a rambling whiner. I think it’s time for him to come home now.

They’re moving in now with free rent for March; we’ll get our first rental check for April. Hallelujah!

I really was not expecting this so soon. Our rental house in Vegas has been empty for three months — we’ve been without tenants longer than that before, in a better economy.

The Terms

The tenants signed a one-year lease for rent at $895/month. After taking out the 8% property manager’s fee, that will bring approximately $823.40 our way each month.

(I say “approximately” because occasionally a repair or some such expense will come up that our property manager will take care of and then deduct from our share of the rent check.)

That’s about $50 less than the amount of rent we pulled from the last tenant’s lease, but I’m okay with that.

The tenants will also pay an extra $20 each month for the water bill, which will be more than enough averaging out the winter and summer months.

I find it highly ironic that our water bill here in Ohio is considerably higher than what you pay in the Nevada desert.

Other Expenses The Tenants Pay:

• Power Bill
• Gas Bill
• Water
• Phone/Cable

As the Owners We Still Pay:

• Sewer/Trash
• Association/Assessment Fees
• Homeowners’ Insurance
• Property Taxes/Mortgage, etc.

I am very excited about what this rent check will mean for us in reaching our financial goals for this next year. I was truly taken aback when I received the message from our property manager that the house was rented. It must have happened very quickly; we didn’t even know this person had inquired about it.

Next stop: Emergency Savings! We were already well on our way into that before these tenants signed the lease. Now we’ll be able to build one up that much faster.

I feel the need to clarify our position regarding our (still empty) rental home in Las Vegas, and a new post seems like the best way to do it. So for the record, we are not at all considering a short sale! As I stated in the previous post, I do not believe our situation warrants one: We are able to meet the expenses of owning the rental, even without tenants to pay the rent — we just don’t like it!

SHORT SALE For those of you still wondering, a short sale is when a bank agrees to allow the sale of a home for less than what is owed on the mortgage, without the borrower making up the difference. (At least not immediately.) (Read the fine print!) Usually for a bank to consider this, you will need to already be behind on your mortgage payments: the bank needs to determine that they will bring in more on a short sale than if they had to foreclose. Obviously, this is still not good for your credit score, but it’s not as devastating as a foreclosure.

MILITARY MOVES When I queried realtors in Vegas late last year about the possibility of selling our rental, one of them told me that they had been gaining a lot of experience helping local military families facing a PCS work out short sales. Obviously, a military family on orders is moving, whether they like it or not. Apparently, the banks are recognizing that as well and are working with them.

That particular realtor, and the others I spoke with as well, all agreed that a short sale is not the best choice for our situation.

I do believe that you should pay back money that you borrow. God willing, someday we will do just that!

So, speaking of our rental mortgage debt. (We were talking about that, weren’t we?) Here’s the dilly: It’s costing us a lot of money.

In case you need a reminder: We owe $109,150.33 (as of today) on a house we own in Las Vegas. We’re going on four months of vacancy. (In other words: No Rent Check).

We lost our tenants (again) right before the holidays last year — yes, right into the tail-end of our initial debt snowball. Thing is, we still met our goal of getting rid of our $19,375.72 of  (non-mortgage) debt within a year. And that’s despite losing our tenants (and their rent check) and cash-flowing a few thousand dollars in car repair during that same time period.

(Factors that I think contributed to making that possible is a future post.)

So back to our rental debt. It’s a house in Las Vegas, and it didn’t start out as rental debt: It was originally our primary residence. As in, we used to live there. But nooo, we couldn’t have been smart and sold it when the market was hot and taken the money and run. Oh, no.

Why, then I wouldn’t have anything to blog about!

So the house is still vacant, and the few inquiries we’ve had on it have been from people with large dogs. (The house is small and the yard is smaller.) And the last couple of days I’ve been thinking, “How much is this wonderful vacation home empty house costing us exactly, anyway?”

And here’s where I make a confession: I have never actually added all the numbers up before.

(That seems a little funny coming from someone who’s blogging about her finances for all the blogosphere to see, doesn’t it?)

Rental Expenses

1. $758.00 = Mortgage / Monthly
2. $   40.00 = Association Fee / Monthly
3. $   66.00 = (another) Association Fee / Quarterly
4. $ 160.65 = Assessment / Bi-annually (I’ve never really understood what this was for.)
   
5. $   59.00 = Sewer / Quarterly
6. $   39.33 = Trash / Quarterly
   
7. $   21-$39 = Power Bill / Monthly

We Pay Whether Rented Or Vacant ~ We Only Pay When Vacant

Lots of Nickels and Dimes there!

Now, obviously I was familiar with the figures above. What I had never done before was calculate how those numbers all played out as a monthly total.

Monthly Cost of an Empty Rental House: $871.58 + Power Bill (Let’s call it $900, shall we?)

Oh, and in case you’re interested. The last rent we collected was $894.00 a month.

When the tenants moved out I immediately picked up the phone and started inquiring with realtors about selling the place. Our house size is smaller than typical for the neighborhood/part of town, and at the time I called, only two houses similar to ours were listed for sale: One for $65,000; the other for $80,000. Both Short Sales.

Just a reminder: We still owe $109,150.83 (as of today).

I just took a quick look on Zillow: Another house similar to ours sold on 12/31/09 for $97,000; another on 1/11/10 for $76,000. (Were those the short sales the realtors mentioned in my phone calls with them? If so, they sold for more than the listed short sale price. Hmmm…)

So now I’m left to quander (and yes, quander is a word, you pin-headed spell checker)…

Should we look into selling the place again? Even listing it for a loss?

We are, after all, throwing copious amounts of money at it as it is, with no guarantee of when some of that money might come back our way.

Some more numbers, in case these affect your opinion sage advice (which you will offer up, yes?):

Breakdown of $758 Mortgage Payment at 3.25% RE 3-1 ARM

(Go ahead, this is where you *GASP* an ARM?! Oh, the horror!)

• $249.74 = Principle
• $296.29 = Interest
• $211.97 = Escrow (property taxes are cheap in Vegas)(brought to you by Gamblers’ Anonymous)

Other Points to Consider

• We don’t have the cash to pay the difference; we’d have to come up with some creative financing to make up the difference between the sale and the amount owed the bank.
• Spring/Summer is coming up: typically a better time to find renters.
• Spring/Summer is coming up: typically a better time to find buyers.
• I don’t believe a short sale is warranted here. We are able to cash flow the expense of an empty rental. We just don’t like it.

Either way, it feels like money is just flying away. The question remains: Do we stick it out for the long-haul and hope that some of it flies back?

Opine in the comments, if you please.

… a whopping $715.

Keeping It Real Does that seem like a lot? How much did you spend? Did you create a budget and stick to it? Do tell.

The thing is, despite the name of this blog, The Hubs and I never really sat down and said, “We’re only going to spend this much on Christmas, and when it’s gone it’s gone.”

That is kind of how a budget works, after all.

Have I mentioned lately that this blog is chronicling a true-to-life work in progress? I’m just keeping it real here, people.

Budget-Schmudget Based on past Christmases, I sort of had an idea in my head that we would spend about $600. I didn’t write this figure down anywhere, and I didn’t keep a running tally as I spent along. I know, I know… what was I thinking? Like keeping track of how much I was spending as I went along wouldn’t be a good idea.

The Hubs and I didn’t even discuss the Christmas budget: since I do the majority of the Christmas shopping, it didn’t really seem necessary. (Again, I know, I know…) Because I’m writing about it this time around for all the internet to see should they so desire, I mentioned to him what the final figure was: no sense having him read it for the first time along with you all, after all. He kind of gasped.

I guess he thought it was a lot.

Did You Pay Cash? I did pay cash for everything (or debit card – whatever). Well, almost everything. I was too lazy to get up and get my debit card for a couple of online purchases so I did buy those using the credit card information the websites already had on file.

The Main Culprit… The biggest spending culprit was, by far, the Wii (and Wii Fit), which I actually purchased last summer. Well over half the total amount spent went to those and a game and accessories. We had all been wanting a Wii since last Christmas, when our financial situation was much more tenuous that it is now: Then, too, the tenants in our Vegas rental had just bailed, only we were not organized and working together on any kind of budget and we were still in a bit of panic mode, wondering how long we could keep up with two mortgages.

Looking Back Those tenants bailing on us in the Fall of 2008 was, really, a wakeup call for us as it highlighted our two very different reactions to a major financial shakeup: The Hubs thought we should go to the bank and see if we could renegotiate our loan (or something); I thought we just needed to crunch some numbers, cut out unnecessary spending, and hunker down and make do until we could rent it out again. Because I have always paid the bills and done the finances, I had a better understanding of where the money was going and where some corners could be cut. The Hubs just saw big neon lights flashing,  “Tenants Bailed! Tenants Bailed!” and kind of panicked.

We did hunker down and cut corners: kids’ activities; ordering out; impromptu trips… This mindful spending paved the way for me to discover Dave Ramsey a few months later in the Spring of 2009. I really don’t know if The Hubs would have so readily jumped on board if we had not had that wake-up call. Then about the same time we decided to start our debt snowball, our property manager procured new tenants. Only instead of going back to our usual way of doing things and putting that rent check toward activities and pizza and who knows what else, we had a plan to get out of debt. Hence the start of this blog.

Looking Ahead Our latest tenants bailed last month. We’ve come a long way since that time over one year ago when we weren’t even sure if we could support two mortgages. But we could be doing so much better. I have been contemplating making the move to cash. *gasp* Yes, cash. As in, no debit cards. It seems to be the missing step we need to take to really get a grip on more mindful spending.  Especially with our grocery budget, if I’m to be honest.

Jars? Envelopes? Anyone out there wanna give their input based on personal experience using cash for variable spending?

On the Horizon The New Year presents new challenges as The Hubs is getting ready to deploy. (More on that later.) But I’m sure you can relate: if we wait for everything to be nice and pretty and straightforward before we implement any changes, we’ll be waiting forever. Life is what happens while you’re busy making other plans, and all that. Maybe that’s not the right quote for this situation… but you get what I mean.

What Did Your Christmas Total Include? This post started out as being about Chistmas spending and morphed into something akin to New Year’s resolutions and reflecting on the Ghosts of Christmas’ Past… To return to my main point of how much we spent on Christmas this year — the $715 went to my immediate family, my parents, MIL, sisters, and the name exchange that my side of the family does each year: each of our kids gets one present for one of their cousins. I also lumped teachers’ and bus drivers’ gifts in there, though I only spent a nominal amount on mostly homemade gifts for them.

How did you fare this Christmas? Did you stick to your budget? (Did you even have one?) Did you spend more or less than last year? Do tell!

November’s Progress

• Debt #1 Original Balance: $2260.17
• Paid Off
  

• Debt #2 Original Balance: $6493.00
• Paid Off

• Debt #3 Previous Balance: $6,607.12
• paid $1000.00
• Current Balance: $4,907.12

Original non-mortgage Debt: $19,375.72

Current Grand Total: $4,907.12

***

Obviously our tenants moving out of our rental house in Vegas is going to put a damper on our debt eradication. We can cash flow two mortgages… But it ain’t pretty.Looking at December’s budget, I’m really not sure yet what progress, if any, we will make toward our snowball this month.