I’m 35 years old and live and work in Vermont. I have saved $175,000 so I’m putting $60,000/21% down towards buying a 1,980 sq ft country house for $287,000. The property has a detached 400 sq ft garage and small 700 sq ft pole barn. The house, garage, and pole barn were built in 2012. This all sits on 25 private quite acres which I intend to monetize as an organic farm in the spring-summer-fall while doing tax accounting in the winter. Moving will over double my commute to my accounting job but brings me closer to my girlfriend, It’s seasonal work so I’m alright with commuting during tax season. I plan to convert the small barn to an in-law suite and short term Airbnb rental at $140 per night which is in line with short term rental prices.
My girlfriend and I have agreed to move in together, and I need help with deciding on all-inclusive rent amount to charge her. I’m putting my capital to work for our mutual benefit by providing her with exemplary housing service in comparison to what she has now. I’m a seasonal tax accountant making about $35,000 a year. My girlfriend is a public school teacher earning $49,900 per year so you can see she earns approximately 42% more than I do. She is saving over 30% of her income ($16,000) each year while I am currently setting aside 16% of my income for savings ($5,800). The rest of our monies go towards housing, utilities, food, transportation, medical, clothing, debt, income tax, vacation travel, misc.
She doesn’t want to pay a rental amount that undermines her super savings goals and this creates a difficult situation for us. She currently rents a 700 square foot apartment for $750 w/ utilities included except for rubbish removal. She always drops off her trash and recycling at my existing apartment when she comes to visit on the weekends to avoid paying the expense herself. Her place is a dump and she’s not happy with it except for it being cheap and close to work so she can meet her saving goals. Her unit is one of three apartments converted from an old farm house. Her place had dirty moldy carpets which we extracted, holes in the wall and ceiling which we patched, a 35 year old gas stove that occasionally leaks propane, an improperly vented basement furnace, missing window screens, missing gutters over entrance so a waterfall cascades off the roof and onto your head whenever entering her apartment. There is also an outdoor window in her apartment which opens into the neighbor’s closet which makes for a security concern. This unit houses a family who work on cars as side income there are a couple parts cars taking up visitor parking space.
I’ve calculated my housing costs:
• Monthly mortgage (P+I): $1,085
• Monthly HOI: $63.50
• Monthly property tax: $235.42
• Monthly property maintenance @ 1% property value: $239.17
• Monthly utilities: $490 / month
• Total $2,113.09
• $1,056 each 50/50 split (is this fair?)
So what’s a fair rental amount to charge my girlfriend? She would prefer to pay no more than the $750 she is now paying for a dumpy apartment sharing 1 acre between 3 sets of tenants. She doesn’t believe a 50/50 split of an all-inclusive $1056 is reasonable since 51% ($542) of that amount is going to towards paying down my mortgage. I wouldn't mind reducing it to $970 all-inclusive to appease her. I explain to her that my place is up to code, beautiful, has land to recreate on, that my rental assessment is pure costs and doesn’t contain profit margin unlike passive income rentals, and that housing is a service and that no matter who she has rented from in the past, she has either been paying off or recouping the cost of someone else’s mortgage. What troubles me is she believes herself as a renter entitled to 50% of any Airbnb revenue I generate from short term renting the in-law suite. She explains that when she had two roommates, everyone’s share of the rent would decrease as a result of bringing on another roommate so she likes my situation to ours. I see that as unreasonable comparison since my name is on the title, I’m responsible for the mortgage, and only my capital is vested in making additions/improvements to the property beyond the scope of regular maintenance and repairs.
Submitted July 26, 2017 at 03:42PM by vermonthomepurchaseh http://ift.tt/2tKm9u7
