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My mortgage is $1,250 (just went up $100.00 due to taxes)
My brother and his friend live there.
My brother pays $600.00 (works on yard, my car, family, etc)
His friend pays $700.00
Total of $1,300 a month.
For info sake, I can rent it out for $1,700 a month but I would have to deal with renters who don't take care of my house. My brother does so it's worth it to let them pay less.
The house is 3 bed 2 bath. I thought about the idea of moving in with them and in turn, lowering their rent.
I wanted you all to give your opinions on if I'm being ridiculous or what...
My thought was..
My friend would pay $500.00 (generally impossible to find a place in this area for $500.00/Room
And my brother would pay $400.00 leaving me with $350.00 to cover the mortgage.
What would happen to the bsthroom situation if you took over the master?
A few years back, I lived with my tenants and they shared the 2nd bathroom that my brother now uses. Basically the guest bathroom by the living room. And I used the master since I slept in the master.
He would have to be okay with that. I plan on discussing all of this with him but wanted to see if I'm out of line with the numbers before asking
I'm with CCC , but here is another way to look at it, you are leaving $400 on the table a month, that is buying your peace of mind. Is that worth $5000 a year?
So you want to move in with your friend and kick out his friend?
As far as fair, it doesn't matter, you paid a down payment, it is on your credit, it is how you want to spread it?
I don't know if you've followed the tax rules, how long you want to keep the house, when how long you've lived there, but there can be tax consequences by moving back.
Have you though about just renting it out for $1700, buying a new 4br place for you, your bother and each of your friends and rent out the rooms. Then just pay him to work on your rental if something comes up?
I made the mistake of not selling when I should have.
A few years back, I lived with my tenants and they shared the 2nd bathroom that my brother now uses. Basically the guest bathroom by the living room. And I used the master since I slept in the master.
He would have to be okay with that. I plan on discussing all of this with him but wanted to see if I'm out of line with the numbers before asking
Great Attitude, btw - as long as what you meant was "discussing it with them". As a homeowner, I think the rent reductions you are offering make sense, though BOTH are losing a private bathroom as that they will have to share. You are reducing EACH for the same amount - $200/month. That's logical to me.
As far as tax consequences go, I'm gonna bet that you have not been reporting the rental income and this home was purchased as your primary residence. Somewhere along the way, you left and have been renting. If I am accurate about that, there are no tax consequences (unless IRS found out about the unreported rental income, but that's a whole different kettle of worms).
Other than that, I can't figure out what TheLopez is talking about.
If the OP reported income , if they move back in, if they sell in the future thinking they'll get to take the $250k tax free, they'll find themselves paying taxes. But that is a lot of if.
Last edited by thelopez2; 09-18-2014 at 04:48 PM..
I don't see why you're basing the rent on your mortgage payment. (Okay, so you want to give them a break for being good tenants.) Another way to consider would be to split $1,700/month three ways...perhaps allowing a slight adjustment given the particular living arrangements of each. You could put your "extra" payment into a special bank account that you set aside for maintenance and repairs. Certainly you're going to need some repairs in the future, so creating a special bank account for that might give you the discipline to plan ahead.
Of course, anything you do needs to be by mutual agreement--unless you just want to kick one or both of them out (under the terms of any rental agreement that is in place).
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