All Forum Posts by: Cheryl Stevens

Thank you everyone for your knowledgeable advice. The down payment would be painful, but doable.  One thing I should mention is that we would most likely pay off any mortgage in 5-7 years when we will have more income and cash than we do now.  

Thanks to everyone for their ideas.  It seemed that the investment property was the right one to finance since it is a rental, but the higher rates and out of state location were barriers.  It is interesting that no one suggested financing the new home in Florida.  Is it an interest rate issue or out of state hassle or something else?

Hello Everyone,

My husband and I live in Maine and want to buy a home in Florida in the $250K-$300K range. It would most likely not be a rental. Our home in Maine is not mortgaged. It would probably appraise for $500-$600K. We also own an investment property in Arlington, VA that is not mortgaged. It is appraised at $750K. Which property should we finance? The new house in Florida, our home in Maine, or our investment property in Virginia? Our credit is good, but we are retired and our income is $4300/month from Arlington, VA rental (gross), $2000/month Social Security, $1100/month pension, and $2000/month from investments (stocks/bonds).

Thanks in advance for your advice.

Cheryl

In the past at least half of my tenants wanted to use all or part of their security deposit as the last month's rent. This decreased significantly when I added  to the lease (in bold) "Under no circumstances may this security deposit be used as rent".  And then when they give notice I repeat that the security deposit can not be usd as the last month's rent. I rarely deduct anything from the deposit. I have deducted for cleaning. One time a tenant painted the first floor sunflower yellow without my permission and took me to small claims court when I deducted $800 to repaint it. Since I am in Maine and the rental is in the Washington DC area she pointed out to me that I would have to appear in person. Since it was April and I have good friends in the area, I went to court and won. However, in this case I wouldn't bother filing eviction notices or lose any sleep over it. if your lease allows you to show it before the lease is up, I'd plan to do that soon. In Virginia the law is very restrictive about what can be deducted from a security deposit but also does not allow the tenant to use it save rent.  I now charge less than a month's rent for security deposit. 

I agree with Tanya.  Although you are required by the IRS to charge Fair Market Value, there is a wide range to work with.  Low Maintenance/Long Term tenants that pay rent on time and take care of your property are quite valuable and they save you a lot of money in the long run.  I've been a landlord for over 25 years and have found that the closer I am to Fair Market Value the higher my maintenance costs, the more telephone calls/emails I get and the more frequent my turnovers.  So this time I am lowering the rent and will try my best to find a reliable, long term, tenant.  I will however raise the rent by 5% or less every year.  Otherwise I have found you get way below Fair Market Value and are in a tough spot.