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You may want to get another quote on insurance, at least a dwelling fire policy if you indeed are "renting" it out. $500 a month seems awfully expensive, and in a prior post you said around $100, that's a huge swing.
You can always look into a high deductible to cut down on premiums, that way you are paying less knowing that you aren't going to nickle and dime the insurance co.
What is the set up of the "condo complex"? is this a large housing development? a converted multi family? is there a master policy, HOA? If this is a bigger place, just know that repairs/upgrades taken on by the HOA can sometimes fall to the individual occupant's for coverage. Something that your insurance policy may have shielded you from potential exposures that are out of your hands.
for full insurance that was the cheapest.
there was supposed to be a HOA, but it crumbled away and disappeared years ago. it's just like 7 units in a small building. 5/7 are owned by the same property manager.
Why is "no one getting high on the street" the determining factor of getting insurance? To me, that would have been the factor before BUYING the place.
I don't see the point in paying a high insurance rate on someplace that is clearly going to get broken into and destroyed regularly.
I'm certain in 5-10 years this area will be desired (there's a lot of things that are cropping up nearby), and that will get rid of a lot of the crime/raise property value.
for full insurance that was the cheapest.
there was supposed to be a HOA, but it crumbled away and disappeared years ago. it's just like 7 units in a small building. 5/7 are owned by the same property manager.
What do you mean full insurance? as if you were living there?
As owner unoccupied you could get away with just a dwelling fire policy. I can't see that costing $6k a year for a $40k property.
You may want to call around for quotes and explain that this is not an owner occupied location and see what your quotes are. As I said, ask for different deductibles to see how much swing there is in price. I would think cost would be closer to $500 a year vs $500 a month. Ultimately it's your call, and the only way I see you are getting away with this is having a non-traditional purchase and financing. I'm surprised the seller didn't put a clause in there to require insurance to protect his interest as well.
If you don't mind sharing, where is this property? (city/state? not looking for specifics)
What do you mean full insurance? as if you were living there?
As owner unoccupied you could get away with just a dwelling fire policy. I can't see that costing $6k a year for a $40k property.
You may want to call around for quotes and explain that this is not an owner occupied location and see what your quotes are. As I said, ask for different deductibles to see how much swing there is in price. I would think cost would be closer to $500 a year vs $500 a month. Ultimately it's your call, and the only way I see you are getting away with this is having a non-traditional purchase and financing. I'm surprised the seller didn't put a clause in there to require insurance to protect his interest as well.
If you don't mind sharing, where is this property? (city/state? not looking for specifics)
I'd be happy to pay $500/year for insurance. it's now like 6k/year for a 40k condo (it is assessed at 100k though, so that might be why).
no. he knows this is an investment piece.
anyway, it's in English avenue, Atlanta, ga. have you heard of the beltline? it will be less than a quarter mile away once they build it.
Not where you are, that's for sure... I was on the cusp of entering near poverty for 5.5 years. At least it was in the best of circumstances, but yeah, didn't know what a 401k was until I was in my 30's.
Same.. I turned the corner around 33 years old. My 20's were just a wash of awful. Establishing myself at a job, thinking if I proved myself it would pay off with them.. It didn't. I stayed about 10 years and after another 5 or so, I found a good company and started saving.
Now, at 44.. My house is paid off (As of last week).. I just bought a new vehicle, so.. Have to pay on that for a few years.. I have money in the bank and several 401ks and IRAs that I don't roll over because I don't even look at them more than once a year.. I find it best to keep the thought of that as "not my money". All but one of them is doing really well.. And that's the smallest IRA I have, so.. Right now it's just not worth the effort to move it somewhere else. It's not losing money, but it's not growing like the others, either.
Same.. I turned the corner around 33 years old. My 20's were just a wash of awful. Establishing myself at a job, thinking if I proved myself it would pay off with them.. It didn't. I stayed about 10 years and after another 5 or so, I found a good company and started saving.
Now, at 44.. My house is paid off (As of last week).. I just bought a new vehicle, so.. Have to pay on that for a few years.. I have money in the bank and several 401ks and IRAs that I don't roll over because I don't even look at them more than once a year.. I find it best to keep the thought of that as "not my money". All but one of them is doing really well.. And that's the smallest IRA I have, so.. Right now it's just not worth the effort to move it somewhere else. It's not losing money, but it's not growing like the others, either.
I currently have 50k in my 401k, (very good) and another 20k in my roth IRA (diversification; very good as well). I have very low actual savings (8k) (this might seem low but you just purchased an investment property, so I'm guessing you had some more money before you completed the purchase) because I just bought an investment condo (around 40k, I owe 22k, I give the previous owner 1k/month). I feel a lot of stress over this condo, especially because I'm renting it out for free to a friend of a friend even though similar condos are renting for $650/month. I thought I could easily afford it, but it's preventing me from building up my emergency savings (I still contribute to my 401k and roth) this year. My job is ok, and I've been lowering my expenses even more, but it's still frustrating (just continue to chop away like it's a tree). I don't want to sell the condo because I am super certain that it'll be worth far more than what I paid for it (I've gotten an offer that is already 10k more than what I paid) in a decade, but I just really feel stressed out. I'm considering getting another job even though I make just slightly under 6 figures (I wouldn't recommend getting another job in this circumstance and I wouldn't get another job if I was in this situation either. Your free time away from work is precious and you won't get it back). I don't have any debt other than this stupid mortgage, which helps. My car is also pretty new (2015), so hopefully I don't have car issues.
Did I screw myself over?
At 24, I was a year removed from moving across country with my own money to a new job after graduating college by myself. I lived alone in a one bdr apt (still the best apt I've ever had IMO), had student loans around 10k, high CC debt around 5k at the time and was trying to climb the ladder and advance my career like others would be at that age. Before I lived in that apt I stayed in different motels throughout town for at least 2-3 weeks since the family I did know didn't take me in. The apt was very good but I had a crazy, eccentric landlady that caused problems with the other nice tenants for no apparent reason other than wanting to screw up her own cash flow. Eventually, I moved to another apt somewhere else. If I would have stayed in that area, I would bought a house in about 2-3 years from then. Also the recession was beginning around 2008-09 so alot of opportunities dried up (both professional and personal). Outside of the rental situation with your condo, I think you're beating yourself for no reason. As others have said, you're doing very well for yourself especially with your 401k and Roth IRA. I think once you figure out the rental situation you got yourself in you'll feel better about everything.
Believe me, I would be in a really good situation if I was participating a forum like CD when I was in my early 20's.
At 24 - in 2007 - my husband and I had 3 children (infant, 1, and 2 year olds - our only three still) and were about to close on our first home and had $10K liquid cash, no debts, and around $27K in a 401K.
But I suspect you didn't come here to find out anything but validation for yourself. :P You're doing fine. Focus on your projects and be conservative about them.
Paid off a 30 year mortgage in.. 10 years.. Well, 10 years 8 months-ish, I think.
Bad part was.. I bought in '07.. Right at the height of everything, and there was bad info on my credit report.. Bad as in negative and bad as in incorrect.. I wound up with a horrid 7.375 rate. By the time I got the credit report cleaned up... Refinancing would hardly have saved me anything because of how quick I was paying it off.
But.. It is pretty cool to go onto Wells Fargo's site and see "Pd in Full"
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