Okay, so my headline might sound a little weird given the "low income" and "house in cash", but hear me out. I am a married 32 year old expecting my first baby with my husband. My husband and I have a plan that we've discussed in detail, but there's a lot of context involved for our personal situation. I decided to post on here to get some less biased thoughts, opinions and advice. Its going to be a long post, so thanks to all who slog through! I will watch this thread and answer any follow up questions later.
My husband and I live almost rent free in my parent's house (we contribute a 200 dollar maintenance fee for rent which we can sometimes work off). I am very grateful for this because he and I each have about 100,000 dollars of student debt, and we live in one of the most expensive real estate/rent areas in the country on the West Coast. His are nasty private loans and mine are government ones. I started working as a special needs teacher in 2015, which has its advantages- its an incredibly in demand field (and I have 2 credentials and a MA which makes me even more marketable), but it can be AMAZINGLY stressful and crazy making, the extent to which people don't often understand (people assume it is all about the kids, but besides dealing with behaviors such as flipping desks or biting/scratching for certain positions, you also have to plan for every day and write and plan to finish legal deadlines throughout the year with tons of paperwork- all in your free time because you only get 3-5 hours per week of prep time).
Anywhoo, I worked for two school years at a 56,000 salary and saved every penny I got, packing lunches, crock pot cooking, cutting my spending to virtually zero impulse spending, freecycling, etc. Needless to say, I've been very proud to have saved about 42,000 dollars in that time, and paid about 15,000 for our wedding and honeymoon without accruing any debt. This saving is on top of what I'm into my state's teaching retirement plan (I don't actually even know how much I saved for that- anybody know how to access it?)
Due to (pregnancy) health complications and worries about the nature of my job while pregnant, I quit this year's position 3 and a half months ago, and again, am proud to say that due to picking up odd jobs I barely touched my savings in that time. I'm due in January, so I'll be out of work for a while longer, though I'd like to pick up part time work and resume full time again for a summer position, then work full time in the next school year. So, for my husband's situation: he started college at an expensive private school in Rochester, (upstate) New York but unfortunately dealt with health issues that resulted in him leaving with a mountain of loans but no degree. These problems still are a daily struggle for him, and he has trouble with working long term, full time. I have hope that maybe his situation will improve but I'm not sure we can count on it. He is school to finish a certificate program for engineering tech. My realistic goal for him is to be able to manage his own loan, period. His credit is crap, and mine is pretty darn good (720ish) because I'm very cautious and responsible with spending.
So, fast forward to our long term financial planning goals. He and I have discussed a plan for me to continue saving for 4-5 years and buy a house in cash in Rochester, which has insanely reasonable real estate from the research I've done. My husband's friends bought a 4 bedroom for 45,000. We'd like to look for foreclosures below market value (that we have carefully inspected) with potential to put a LITTLE sweat equity into. We'd thought of living in Rochester area for several years before renting, but when I discussed this with my mom, she balked. Her and my dad tried to poke every kind of hole in my plan they could think of, but I think that a lot of this is based on "Don't take my grandbabies away from me!!!!". That said, we considered and told my parents our goal would be to continue saving, set up the house as a rental and move back to the West Coast as soon as possible (within 2 years if possible). Knowing my parents, they also might throw money at my husband and I to make this happen. Yes, I understand that managing rentals cross coast is an undertaking. We plan to vet renters VERY carefully, check backgrounds and credit and just be awesome landlords in hope to inspire loyalty... hah. Good luck, right? But I'd love to hear from people who have actually experienced this in more detail.
We want to have more kids, and more space than the tiny space that is available in my parents place right now. But we might be able to squash here for a while after setting up the rental, so I could get rental income and my teaching salary (higher in this area than anywhere else in the country) while saving for a down payment.
From my research, a house in Rochester can rent between 1,500 and 2000 dollars. Teaching salary there is lower, probably around 8,000- 10,000 a year annually. I know there will be people on here who will say that we are wasting ROI by not investing my savings. However, I know my temperament. I have anxiety over money and a low risk threshold (at this time in my life, at least). We can't/don't want to live in my parents house forever and I am hesitant to take on more debt. I like the idea of long term, passive income because of my husband's situation and the nature of my job, which puts a lot of pressure on me as the main breadwinner. My husband would probably be an excellent rental manager, and we could get a travel credit card, and rack up points to fly him out to stay with friends for this purpose, but we're open to a rental managing company eventually if we get tired of dealing with it. So my risk aversion is a consideration, and my husband's uncertain work status, and the fact that I might need breaks from my job to do less stressful, lower paying work for periods of time. I know some people will mention diversifying and that its a lot of money to tie up in real estate, but I would definitely start to squirrel away some of the rental income/my income into a 403B and/or 401K as soon as I got it. I'll likely get an inheritance from my parents some day, as they have at least half a million in assets, and I'd likely pay off some of my husband's debt with that. I should eventually get PSLF loan forgiveness as a public school teacher, assuming Trump doesn't take that away so I'm kind of not making plans around mine besides my income based repayment plan. Phew! I think that's it! Thank you in advance for any thoughts, and I'm open to hearing them but please be gentle, as this plan is kind of our baby. :)
Submitted January 01, 2018 at 05:31PM by artisanne2017 http://ift.tt/2qbw4aC
