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?
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