Mr. Hutch and I are walking a pretty fine financial line these days, due to financing the building of our rental suite with the equity in our home. I found myself thinking the other day about my financial past and what I might have done differently had I known then what I know now.
I know. Like grey hair and back pain, this is sure sign that I am old.
When I was 23 and in my final year of university, my father died suddenly. My brother and I inherited a significant amount of money. This had a huge effect on my life for the next few years, and the consequences of the decisions I made then are still with me today.
The first thing I did with the money was probably smart: I paid off my student loan. With one cheque, my $12,000 debt was gone. It was my first and only payment on the loan. The enormity of this did not escape me at the time. I felt very fortunate on the one hand to be able to do this, and yet that it was at the expense of having my father meant it was bittersweet.
I had a bit of bad luck when I graduated university. I was all set to start working for one of my favorite professors in his lab. Just before I began though the job fell through, and along with it my reason to move into the apartment I had just rented downtown. On the upside, I suddenly found myself with no commitments and lots of cash in the bank. An enviable position to be in.
This is where I wonder if I could have made some better choices. I moved back home to mom, and basically had the kind of summer you have before you start your first job (which for me was 10 years earlier). I had a couple of other friends who were recent university graduates and in the same boat as me. We dubbed ourselves "team unemployed", and we made the most of that summer. We camped, we swam, we stayed at one guy's parent's summer home in the Gulf Islands. We drank beer and sat in the sun and watched seals swim in the harbour below. It was pretty great, and I still think of that summer fondly. One smart financial move I made at that time was to invest with a developer friend and build a spec house with my brother. We sold that house for a profit of around $20,000, without really lifting a finger. Not doing that several more times is one regret I have. I did look for work in my chosen field of wildlife biology all that summer though. Jobs were notoriously hard to come by in my field at that time, especially ones that paid more than a pittance. I was apparently "this close" to landing what sounded like an amazing job with a well-respected research institute in Ontario. Had I been chosen for that job and had I picked up and moved across the country that summer, I wonder how different my life would be now? Would I have met Mr. Hutch, had the Hutchlings? Would I have found my way back to the west coast, where my heart is? I'll never know the answers to these questions of course, but I have to imagine I wouldn't be where I am now.
After that summer turned to fall and still no biology job was forthcoming, I took a few internships in the hopes of beefing up my resume and eventually landing a paying job in my field. My inheritance subsidized a trip to New Zealand to study bottlenose dolphins that fall and winter (with a side trip to Fiji tagged onto the end of the internship) and a stint around home banding hummingbirds in the spring. Later that year I took off to Africa, Australia and Indonesia to travel for a while. When I returned, I took a position banding migratory songbirds in Oregon. All of these were incredible experiences, and I don't regret any of them. Had I not inherited that money, I wouldn't have been in the position to take these no- or low-paying, yet incredible jobs or take the trip that was purely for pleasure.
In fact, it was that final job in Oregon that sort of set me on the path that led me back to Victoria, and to my life today. I loved fieldwork, and intended to keep trying to make a go of becoming a professional biologist. Until one day when a realization came to me, crystal clear. I can picture now in my mind exactly where I was (walking along a trail beside a stream towards one of my mist nets), what I was wearing (pink tanktop, cargos, binoculars) and how the sun was shining directly overhead. And suddenly I just knew, without a doubt: this wasn't the life for me. It had a lot to do with my boss that summer, who lived and breathed ornithology and didn't care if he ever did anything else. He was willing to live in his car or couchsurf, going from short-term seasonal contract to short-term seasonal contract. And meeting him, I just knew that I didn't have that in me. I wanted a relationship someday, and to put down roots somewhere. I really just wanted to sleep in a bed that belonged to me, something I hadn't done at that point for a long time. I decided then and there that I would move back to Victoria at the end of that summer and try a new track.
I took a bit of a winding path once I was back in Victoria, but eventually it led to the decent-enough paying government job I have today. I put the final chunk of my inheritance down on a house with my brother and sister-in-law. That proved to be a pretty fateful decision as it was because of that house that I met the then-single tradesman named Mr. Hutch. I even made a tidy profit when they bought me out so that Mr. Hutch and I could buy the house we live in today.
So really, there not much point in wishing I had done things differently. Sure, I could have invested the money smarter or begun building my real estate empire. But oh did I have fun. I saw a good chunk of the world, grew up a bit. I still don't really know what I want to do with my life, but I'm happy with where I am and what I have. I think my father would be pleased to see what he afforded me.
Monday 20 August 2012
Saturday 18 August 2012
Having Twins: Double Blessing or Financial Death Knell?
Parents of twins are constantly bombarded with comments from strangers. One that Mr. Hutch and I get fairly often is, "Hey, two for the price of one!". I used to respond to this comment the same as any other: with a smile, maybe a polite laugh or a lighthearted reply. Secretly though, I would seethe. And the last time someone said it to me, I gave a different reply. I said, "no actually, it's two for the price of two". Because it is. At least two, emotionally maybe even closer to three is what I was thinking.
Having two babies at once is not the same thing as having two babies consecutively. I don't care if your kids are nine and a half months apart. It's not "basically" the same as twins. Nope. No way. There are a lot of reasons why this is true, and the financial aspect is not insignificant. At first blush, it might not seem that having two children at once would have much more financial impact than having two a year or more apart. But I want to run some numbers.
First off, the Hutchlings were born very premature. I had them at 29 weeks and 5 days, and even then only by the skin of my teeth. Apparently I was very close to having them at just over 27 weeks, though I didn't know that until well after they were born. V spent 56 days in the NICU, N spent 68. Luckily I live in a socially progressive country with universal healthcare so there was no tab to be paid upon their discharge. Had they been born elsewhere (looks southward) that would have been one hefty bill. My very quick research led me to a figure of $3000 per day for the average NICU stay for a premature infant, or a total cost of about $400,000 for infants born at 28 weeks, not including surgeries. At $3000 per day, that would be $168,000 for V and $204,000 for N. Quite likely more as their stay was not "average". They spent a good portion of their stay in the level 3 NICU (requiring the most care and money), before progressing through level 2 and then level 1 (least care and money). Plus N had one surgery so who knows what that cost. I honestly don't know how insurance systems work in places without universal healthcare so I don't know what portion of that (if any) would have to be paid by the parents. Regardless, any portion of that would have to be significant. So far though, we're at $0, on par with any other parent in this country.
Secondly, there are all kinds of things that we needed two of. When you have kids one at a time, you can save a lot of stuff from the first to use for the second. Not us. Now, we certainly don't believe in having two of everything and we try to get by with the minimum. Some things are unavoidable however. We have a double stroller ($800), two cribs ($140 each), double the cloth diapers ($300 for 12, we have 24), two rear-facing car seats ($230 each) and two front-facing car seats ($72 each), two highchairs ($40 each), two portable playpens for when we visit the nanas (the cheapest one was $40, I think). I think it's safe to say that we spent over a thousand dollars more than we would have for only one.
Next is the daycare. As I mentioned, we spend around $16,000 a year on daycare for both Hutchlings. Yes, parents of two children born apart still have to pay for daycare for each child, albeit staggered. On paper it looks the same. But parents who have their second child before their first has gone to school get a break on daycare, assuming they take a year of maternity leave for their second (as would have been the case for me) and they don't send their eldest child to daycare for that year. We can assume then that pulling one kid out of daycare while on maternity leave with the other saves $8000. This is a tricky one though, as whether that is a benefit or not depends on what mama is bringing home while on maternity leave. I have a relatively generous benefit package in this regard and so brought home about 78% of my salary in my year of maternity leave. That translated to about $12,000 less than a year in which I was working. So for me, taking only one year of maternity leave for two children actually looks like a financial benefit, to the tune of $4000. My situation is more complicated than that, though. I qualified for some extra maternity leave benefits for the period that the Hutchlings were in hospital. This extra leave paid about $5500 less than an equivalent period of salary. So the fact that I had two, and that having two was probably the reason why I had them ten weeks early, means any financial benefit I got by essentially serving my maternity leaves concurrently rather than consecutively evaporated, and then some ($1500 some).
One theme that I imagine will run through the Hutchlings upbringing is that they will always need roughly the same things at roughly the same time. Summer camps, sports fees, University. On paper it's no different than two kids needing those same things a few years apart, but somehow the financial hit just feels harder when you have to pay twice as much at one time.Of course there are some savings that go with having twins. In fact, I got two-for-one at a playgroup I brought them to this week. I saved nine bucks!
All in all, I think it's safe to say that having twins is more expensive than having two kids separately. But I never have to give birth ever again, and in my book, that's priceless.
Having two babies at once is not the same thing as having two babies consecutively. I don't care if your kids are nine and a half months apart. It's not "basically" the same as twins. Nope. No way. There are a lot of reasons why this is true, and the financial aspect is not insignificant. At first blush, it might not seem that having two children at once would have much more financial impact than having two a year or more apart. But I want to run some numbers.
First off, the Hutchlings were born very premature. I had them at 29 weeks and 5 days, and even then only by the skin of my teeth. Apparently I was very close to having them at just over 27 weeks, though I didn't know that until well after they were born. V spent 56 days in the NICU, N spent 68. Luckily I live in a socially progressive country with universal healthcare so there was no tab to be paid upon their discharge. Had they been born elsewhere (looks southward) that would have been one hefty bill. My very quick research led me to a figure of $3000 per day for the average NICU stay for a premature infant, or a total cost of about $400,000 for infants born at 28 weeks, not including surgeries. At $3000 per day, that would be $168,000 for V and $204,000 for N. Quite likely more as their stay was not "average". They spent a good portion of their stay in the level 3 NICU (requiring the most care and money), before progressing through level 2 and then level 1 (least care and money). Plus N had one surgery so who knows what that cost. I honestly don't know how insurance systems work in places without universal healthcare so I don't know what portion of that (if any) would have to be paid by the parents. Regardless, any portion of that would have to be significant. So far though, we're at $0, on par with any other parent in this country.
Secondly, there are all kinds of things that we needed two of. When you have kids one at a time, you can save a lot of stuff from the first to use for the second. Not us. Now, we certainly don't believe in having two of everything and we try to get by with the minimum. Some things are unavoidable however. We have a double stroller ($800), two cribs ($140 each), double the cloth diapers ($300 for 12, we have 24), two rear-facing car seats ($230 each) and two front-facing car seats ($72 each), two highchairs ($40 each), two portable playpens for when we visit the nanas (the cheapest one was $40, I think). I think it's safe to say that we spent over a thousand dollars more than we would have for only one.
Next is the daycare. As I mentioned, we spend around $16,000 a year on daycare for both Hutchlings. Yes, parents of two children born apart still have to pay for daycare for each child, albeit staggered. On paper it looks the same. But parents who have their second child before their first has gone to school get a break on daycare, assuming they take a year of maternity leave for their second (as would have been the case for me) and they don't send their eldest child to daycare for that year. We can assume then that pulling one kid out of daycare while on maternity leave with the other saves $8000. This is a tricky one though, as whether that is a benefit or not depends on what mama is bringing home while on maternity leave. I have a relatively generous benefit package in this regard and so brought home about 78% of my salary in my year of maternity leave. That translated to about $12,000 less than a year in which I was working. So for me, taking only one year of maternity leave for two children actually looks like a financial benefit, to the tune of $4000. My situation is more complicated than that, though. I qualified for some extra maternity leave benefits for the period that the Hutchlings were in hospital. This extra leave paid about $5500 less than an equivalent period of salary. So the fact that I had two, and that having two was probably the reason why I had them ten weeks early, means any financial benefit I got by essentially serving my maternity leaves concurrently rather than consecutively evaporated, and then some ($1500 some).
One theme that I imagine will run through the Hutchlings upbringing is that they will always need roughly the same things at roughly the same time. Summer camps, sports fees, University. On paper it's no different than two kids needing those same things a few years apart, but somehow the financial hit just feels harder when you have to pay twice as much at one time.Of course there are some savings that go with having twins. In fact, I got two-for-one at a playgroup I brought them to this week. I saved nine bucks!
All in all, I think it's safe to say that having twins is more expensive than having two kids separately. But I never have to give birth ever again, and in my book, that's priceless.
How Did We Decide To Renovate?
We took a long time reaching our decision to add a rental suite to our home. Having an income suite in your home is pretty common in our city, especially for first-time buyers. Real estate is so expensive here that many people simply can't afford to buy a home without one.
Yet when Mr. Hutch and I bought this house, our first together, we were particularly happy to not have to be landlords. My brother and sister-in-law had done it, and we'd seen them have to deal with some major headaches (a basement suite that flooded with backed-up sewage while they were on holiday in Europe, for instance). We Hutches looked at each other and said, "glad we don't have to deal with that shit!".
Sigh, we were so young and stupid.
Fast-forward four years and two kids: it was suddenly apparent that our cute little house wasn't going to cut it much longer. We started discussing our options.
The first was to sell our house and buy a new one that was better suited for our family. We had a couple of realtors come by and give us an estimate of the market value of our house. They were pretty much in agreement: one came in at $470,000-$480,000 and the other at $475,000 to $485,000. Using a valuation of $475,000, I ran some numbers. I figured that if we sold our house at that price, once we paid the realtor's commission, paid out our line of credit, our mortgage and other various fees, we'd walk away with around $80,000. We agreed that to buy a new house with the kind of space we wanted, we were looking at paying at least $550,000. Once we paid property transfer tax on a house at that price, we would have only about $70,000 to put down. That's a high-ratio mortgage, so cue the extra CMHC insurance premiums (to the tune of nearly $10,000). That meant a mortgage of around $500,000. I think I vomited then. If I recall, my exact words were, "no f***ing way am I taking on a mortgage of a half-a-mil". Never mind that a house in that price range was still going to need work. That option died a pretty quick death soon after.
The next option was to price out finishing our basement. We brought in the big guns to give us an estimate; the kind of company that specializes in basement renovations and have all kinds of fancy ideas about digging them out, raising them up, pouring new foundations and the like. They told us that to get our basement structurally sound, to able to start building something would cost around $80,000. Again: I think I vomited.
I remember those being some pretty dark days. I felt totally trapped by our home. It was made doubly worse by the fact that I blamed myself. It was me who really pushed to buy this house, and for no better reason that I thought it was pretty. Now we had no viable options to get out and raise our family in the kind of home that we had hoped.
Some time passed and we decided to get a second, and even a third, opinion. We have a couple of friends who are contractors and both told us we could do something with our basement for less than the first company estimated. It wouldn't have ceilings quite as high, or as much usable square footage, but it would still work. One estimated we could finish a suite for around $70,000 and the other said we could do it for closer to $50,000 or $60,000. While still a lot of money, we figured these were numbers we could manage. Turns out the first contractor friend was just about spot on. At the end of all this, we will have sunk around $70,000 into the basement, and the additional workshop Mr. Hutch built in the backyard to house all his tools and things that could no longer live in the basement.
So did we make the right decision? I'm still not really sure. At the end of the day though, we own a house in a neighborhood that we love. We'll have some extra income for as long as we decide to rent out the suite. And having uncovered nearly every square inch of this place, we feel safe knowing that we've found and fixed all the problems. We wouldn't have that confidence in a new place, even if it had been renovated by someone else. Which probably wouldn't have happened anyway. We couldn't have afforded a home that had already been renovated!
So whether it was the right choice or not, we feel like we made a great decision for our family.
Yet when Mr. Hutch and I bought this house, our first together, we were particularly happy to not have to be landlords. My brother and sister-in-law had done it, and we'd seen them have to deal with some major headaches (a basement suite that flooded with backed-up sewage while they were on holiday in Europe, for instance). We Hutches looked at each other and said, "glad we don't have to deal with that shit!".
Sigh, we were so young and stupid.
Fast-forward four years and two kids: it was suddenly apparent that our cute little house wasn't going to cut it much longer. We started discussing our options.
The first was to sell our house and buy a new one that was better suited for our family. We had a couple of realtors come by and give us an estimate of the market value of our house. They were pretty much in agreement: one came in at $470,000-$480,000 and the other at $475,000 to $485,000. Using a valuation of $475,000, I ran some numbers. I figured that if we sold our house at that price, once we paid the realtor's commission, paid out our line of credit, our mortgage and other various fees, we'd walk away with around $80,000. We agreed that to buy a new house with the kind of space we wanted, we were looking at paying at least $550,000. Once we paid property transfer tax on a house at that price, we would have only about $70,000 to put down. That's a high-ratio mortgage, so cue the extra CMHC insurance premiums (to the tune of nearly $10,000). That meant a mortgage of around $500,000. I think I vomited then. If I recall, my exact words were, "no f***ing way am I taking on a mortgage of a half-a-mil". Never mind that a house in that price range was still going to need work. That option died a pretty quick death soon after.
The next option was to price out finishing our basement. We brought in the big guns to give us an estimate; the kind of company that specializes in basement renovations and have all kinds of fancy ideas about digging them out, raising them up, pouring new foundations and the like. They told us that to get our basement structurally sound, to able to start building something would cost around $80,000. Again: I think I vomited.
I remember those being some pretty dark days. I felt totally trapped by our home. It was made doubly worse by the fact that I blamed myself. It was me who really pushed to buy this house, and for no better reason that I thought it was pretty. Now we had no viable options to get out and raise our family in the kind of home that we had hoped.
Some time passed and we decided to get a second, and even a third, opinion. We have a couple of friends who are contractors and both told us we could do something with our basement for less than the first company estimated. It wouldn't have ceilings quite as high, or as much usable square footage, but it would still work. One estimated we could finish a suite for around $70,000 and the other said we could do it for closer to $50,000 or $60,000. While still a lot of money, we figured these were numbers we could manage. Turns out the first contractor friend was just about spot on. At the end of all this, we will have sunk around $70,000 into the basement, and the additional workshop Mr. Hutch built in the backyard to house all his tools and things that could no longer live in the basement.
So did we make the right decision? I'm still not really sure. At the end of the day though, we own a house in a neighborhood that we love. We'll have some extra income for as long as we decide to rent out the suite. And having uncovered nearly every square inch of this place, we feel safe knowing that we've found and fixed all the problems. We wouldn't have that confidence in a new place, even if it had been renovated by someone else. Which probably wouldn't have happened anyway. We couldn't have afforded a home that had already been renovated!
So whether it was the right choice or not, we feel like we made a great decision for our family.
Friday 17 August 2012
Renovation and Financial Update
Mr. Hutch and I are on the home stretch with our rental suite. The drywall is up and is being mudded and taped this week. Next week it will be painted and then we can lay the flooring. After that we can install the kitchen and bathroom fixtures and button up all the finishing work. We may just reach our deadline of the end of this month.
We're also on the home stretch financially. We financed this renovation by remortgaging our home and pulling out our equity. We knew all along that the amount we could access would make a really good dent in our renovation, but it wouldn't fund the whole thing. The plan was to remortgage again once everything was complete, in effect accessing the equity we'd just added to our home by building the suite.
We're now at the point where the total bill for all the work left to be done outweighs the cash we have on hand. It's not the most comfortable spot to be in. We're playing the long game though, and trying to keep everything in perspective. We chose to put ourselves in this risky position but we're banking on a big payoff, long-term.
Before we started this renovation, our house was appraised at $513,000. Now we have to cross our fingers that the new appraisal will come in at $560,000 in order to get the equity we need to pay the final bill. We'll have sunk in the neighborhood of $70,000 into this renovation, so on paper it seems like it should work. But it's a risk. In reality, I'm not sure we would have got $513,000 for our house had we decided to sell it. Just the same, I don't know that we'd get $560,000 for it now that it has a suite. It's a game though, the appraisal business. It's has an aspect of correlation to market values but at the end of the day, it's just someone's opinion. And opinions can be subjective. We'll just have to wait and see where the final numbers fall.
We're also on the home stretch financially. We financed this renovation by remortgaging our home and pulling out our equity. We knew all along that the amount we could access would make a really good dent in our renovation, but it wouldn't fund the whole thing. The plan was to remortgage again once everything was complete, in effect accessing the equity we'd just added to our home by building the suite.
We're now at the point where the total bill for all the work left to be done outweighs the cash we have on hand. It's not the most comfortable spot to be in. We're playing the long game though, and trying to keep everything in perspective. We chose to put ourselves in this risky position but we're banking on a big payoff, long-term.
Before we started this renovation, our house was appraised at $513,000. Now we have to cross our fingers that the new appraisal will come in at $560,000 in order to get the equity we need to pay the final bill. We'll have sunk in the neighborhood of $70,000 into this renovation, so on paper it seems like it should work. But it's a risk. In reality, I'm not sure we would have got $513,000 for our house had we decided to sell it. Just the same, I don't know that we'd get $560,000 for it now that it has a suite. It's a game though, the appraisal business. It's has an aspect of correlation to market values but at the end of the day, it's just someone's opinion. And opinions can be subjective. We'll just have to wait and see where the final numbers fall.
Tuesday 7 August 2012
Will This Be Our Forever Home?
I don't think there's one square inch of our home that Mr. Hutch has not had his hands on. Consequently, he has a different sort of emotional attachment to this house than I do. Don't get me wrong, I love our home. When we first walked through it when it was for sale, I took one step inside and decided that I we should buy it. I still don't know if buying this house was a good decision. We ended up sinking a lot of money into it to fix so much bullshit that the various owners over the last century have done to it. Regardless, it's our home now and once the basment is completed, there should literally be nothing left to do for a good while. We're here now, and we're here for the long haul.
Problem is, I can see us outgrowing the space. I'm all for living simply, and with less. I don't want lots of space and lots of rooms that I have to spend lots of time cleaning. But I have visions of literally stuffing two teenaged boys into our tiny second bedroom, arms and legs sticking out of the door. And really, don't teenaged boys deserve a bit of privacy?
One option in the future is to take over our basement suite. Each of the boys can have their own bedroom, plus their own bathroom and rec room space. This would require a third renovation, however. There is currently no interior staircase between our two floors. We'd have to find a way to tag on a staircase, probably to the back of the house where there is currently a deck. It wouldn't be cheap or easy, and would require a variance from the city. I don't know that's it worth the money, or the hassle.
Mr. Hutch has come up with a second option. He said to me recently that he will never sell this house, now that he's spent so much of his time and our money getting it up to standard. He's also called in a lot of favours from his tradesman friends and he can't see letting it go. His idea is to keep our current home as a two-unit rental property and we buy another home for our family. I like this idea, but I don't know if we can swing it financially.
To buy a new home, we'd be looking at a $100,000 down payment minimum, and quite possibly a good deal more than that. In order to save that amount, I have considered stopping our monthly RRSP contributions and instead putting that money (plus a bit more - courtesy of the basement suite) aside in a short-term low-risk investment. After five years we could have around $60,000. We also could consider remortgaging our current home to the maximum, or 80% of it's value. Depending on the value of the house in five years I figure this could give us at least another $50,000 but maybe $75,000. I think I'm being realistic with these numbers.
Assuming the 2-unit rental carries itself, i.e. the rental income from the two units pays the mortgage, taxes and leaves a bit left over for repairs (which we expect to be minimal for the forseeable future), I think this could be a sound investment. Even if we do have to drop money into it every month, it could still be worth is as we'll end up with a paid-off home in 25 years. We then have the option to keep the second home as a rental and reap the monthly income in retirement, or sell the sucker and add to our nest egg. It's anyone's guess what the house will be worth in 25 years.
I'd love to hear some feedback on this plan. This is just the way I look at it, but I know others will have a different take on it. What do you think?
Problem is, I can see us outgrowing the space. I'm all for living simply, and with less. I don't want lots of space and lots of rooms that I have to spend lots of time cleaning. But I have visions of literally stuffing two teenaged boys into our tiny second bedroom, arms and legs sticking out of the door. And really, don't teenaged boys deserve a bit of privacy?
One option in the future is to take over our basement suite. Each of the boys can have their own bedroom, plus their own bathroom and rec room space. This would require a third renovation, however. There is currently no interior staircase between our two floors. We'd have to find a way to tag on a staircase, probably to the back of the house where there is currently a deck. It wouldn't be cheap or easy, and would require a variance from the city. I don't know that's it worth the money, or the hassle.
Mr. Hutch has come up with a second option. He said to me recently that he will never sell this house, now that he's spent so much of his time and our money getting it up to standard. He's also called in a lot of favours from his tradesman friends and he can't see letting it go. His idea is to keep our current home as a two-unit rental property and we buy another home for our family. I like this idea, but I don't know if we can swing it financially.
To buy a new home, we'd be looking at a $100,000 down payment minimum, and quite possibly a good deal more than that. In order to save that amount, I have considered stopping our monthly RRSP contributions and instead putting that money (plus a bit more - courtesy of the basement suite) aside in a short-term low-risk investment. After five years we could have around $60,000. We also could consider remortgaging our current home to the maximum, or 80% of it's value. Depending on the value of the house in five years I figure this could give us at least another $50,000 but maybe $75,000. I think I'm being realistic with these numbers.
Assuming the 2-unit rental carries itself, i.e. the rental income from the two units pays the mortgage, taxes and leaves a bit left over for repairs (which we expect to be minimal for the forseeable future), I think this could be a sound investment. Even if we do have to drop money into it every month, it could still be worth is as we'll end up with a paid-off home in 25 years. We then have the option to keep the second home as a rental and reap the monthly income in retirement, or sell the sucker and add to our nest egg. It's anyone's guess what the house will be worth in 25 years.
I'd love to hear some feedback on this plan. This is just the way I look at it, but I know others will have a different take on it. What do you think?
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