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What is the right move here?
Newbie here and I would love some feedback on what you would do in this scenario. Would you Stay-Sell-Rent? We are realizing that this home doesn't fit our lifestyle anymore and we want to pay down debt and start saving to buy our first rental property. We are considering either selling the home or renting and moving into an apartment with much less overhead. However, we are worried about losing our "investment" and such a low interest rate.
We purchased a Trendmaker home west of Houston in Katy, in 2020 with 10% down at 3.3% interest for $319,000. The house is 2660 sq ft, 4 bd 3 ba, 2 car garage & pool built in 2006. Zoned to "sought after" Katy ISD and Seven Lakes High school (one of the top in the state & country, so I am told) in Cinco Ranch. It would sell or rent very quickly.
To make a long, expensive story short, we discovered that builder failed to insulate an entire 3rd attic space and didn't seal wall cavities up in the main attic or insulate chases properly (Inspector failed too). This, coupled with the fact that the HVAC company didn't run a Heat Load when we purchased 2 new units in 2021, has led to extensive, repeated water damage and remediation on 3 separate occasions in different areas of the home.
To finance the remediation we took out a HELOC to the tune of $70k with a bit of money from insurance (another saga) ... paying $600 month interest only on HELOC.
The house was just appraised at $514,500.
Realtor said he'd list in $540,000 range.
After paying off HELOC and closing costs etc we would be left with roughly or so $110,000-$140,000 if we sold it.
Rental estimate $3200. Mortgage $2600 -cashflow calculator $350+ (didnt take HELOC payment into consideration)
Question #1... Should we bother trying to wrestle with Trendmaker or HVAC company, who has since rebranded, for compensation (all of this did lead to significant health issues which is another story entirely as well)
Question #2... Should we sell it?
Question #4... Should we rent it?
Question #5... Should we just stay in it for now?
Quote from @Michael Megarity:
Newbie here and I would love some feedback on what you would do in this scenario. Would you Stay-Sell-Rent? We are realizing that this home doesn't fit our lifestyle anymore and we want to pay down debt and start saving to buy our first rental property. We are considering either selling the home or renting and moving into an apartment with much less overhead. However, we are worried about losing our "investment" and such a low interest rate.
We purchased a Trendmaker home west of Houston in Katy, in 2020 with 10% down at 3.3% interest for $319,000. The house is 2660 sq ft, 4 bd 3 ba, 2 car garage & pool built in 2006. Zoned to "sought after" Katy ISD and Seven Lakes High school (one of the top in the state & country, so I am told) in Cinco Ranch. It would sell or rent very quickly.
To make a long, expensive story short, we discovered that builder failed to insulate an entire 3rd attic space and didn't seal wall cavities up in the main attic or insulate chases properly (Inspector failed too). This, coupled with the fact that the HVAC company didn't run a Heat Load when we purchased 2 new units in 2021, has led to extensive, repeated water damage and remediation on 3 separate occasions in different areas of the home.
To finance the remediation we took out a HELOC to the tune of $70k with a bit of money from insurance (another saga) ... paying $600 month interest only on HELOC.
The house was just appraised at $514,500.
Realtor said he'd list in $540,000 range.
After paying off HELOC and closing costs etc we would be left with roughly or so $110,000-$140,000 if we sold it.
Rental estimate $3200. Mortgage $2600 -cashflow calculator $350+ (didnt take HELOC payment into consideration)
Question #1... Should we bother trying to wrestle with Trendmaker or HVAC company, who has since rebranded, for compensation (all of this did lead to significant health issues which is another story entirely as well)
Question #2... Should we sell it?
Question #4... Should we rent it?
Question #5... Should we just stay in it for now?
Without knowing the full story on the Homebuilder and HVAC company, I'd reach out to an attorney and see if you have a case.
What do you mean by the home does not meet your lifestyle anymore?
We are really taking a look at our spending and lifestyle "creep". We hardly use the pool which is $180 month to maintain and we spend all our time together in the kitchen/living which leaves 4 other zones empty 95% of the time. It seems excessive now that we are really taking a hard look at things. However, a smaller apartment that allows pets is not much cheaper than our mortgage.
Quote from @Michael Megarity:
We are really taking a look at our spending and lifestyle "creep". We hardly use the pool which is $180 month to maintain and we spend all our time together in the kitchen/living which leaves 4 other zones empty 95% of the time. It seems excessive now that we are really taking a hard look at things. However, a smaller apartment that allows pets is not much cheaper than our mortgage.
I hear you on lifestyle creep! I'd have a lawyer review your case. But if nothing comes of that, it sounds like it may make sense to sell and move on. It seems this house has been nothing but trouble for you. A fresh start might give you clarity on what you all want to do.
Thank you for your input. I appreciate it very much!
#1 Insurance Contributor
- Insurance Agent
- Norwalk, CT
Michael,
If the builder and/or HVAC contractors gave you proof of Insurance. You can open a claim directly with their Insurance company. You may want to approach the contractors and let them know you plan on putting in a claim and see if that prompts them to offer a compromise. You should also, if your Homeowners policy paid for the remediation, find out if they are going after the Contractors. If so, you may be able to piggy back on that claim. If not, find out why they are not pursuing it. That reason may give you a clue on what your potential success will be.
Question #1. YES! threaten both of them with a lawsuit and they will very likely settle with you. Hell, add the inspector as well.
Question #1: probably worth it.
Question #2: Definitely yes.
Quote from @Gustavo Delgado:
Question #1. YES! threaten both of them with a lawsuit and they will very likely settle with you. Hell, add the inspector as well.
Thank you! We are looking into it.
Quote from @Adam Laurenzo:
Question #1: probably worth it.
Question #2: Definitely yes.
Yes to selling... just because its a headache?
Yes to selling... just because its a headache?
Because you've wisely identified that it no longer fits you as a home, and because if you wanted a rental property you could probably get a better one.