We have been struggling on deciding what to do with our house over the last few weeks. The neighborhood we are is really great, with a few young families on the street for the kids to play with, only local traffic and a house that meets all of our needs both immediate and currently anticipated. In addition, we have only been in the house for 9 months and it just seems crazy to move again so soon. To help determine the right course of action I financially evaluated 4 options for the house:
- Sell the house and invest all the cash
- Rent the house with current mortgage and invest our cash
- Pay down as much of the current mortgage (nearly all) with the cash we have and rent it
- Pay down one annual payment worth (25%) and rent it
Without getting into the numbers too much I calculated our net worth now and what our net worth would be after a year of cruising for each of the cases. What I discovered is that for each of these cases in the current financial climate and rental market our net worth would be the same after a year regardless of the choice taken. That made it easier and harder because now we would have to decide based on non-financial terms like desire to keep the house for when we get back, amount of work and disruption to life between now and when we leave and amount of complication while we are out of the country. If one option had stood out then it would have made things much simpler.
On the disruption side, selling or finding a renter will be equally hard as we need to keep the house in near showing condition until it is sold or rented. If we sell we would also have to find a place to store our stuff (expensive) while we are away and move it there. Renting simplifies that end of things as we would use one of the two basement bedrooms to store the stuff while we are gone. Most “get out there now” crusing books say not to get rid of everything and cast off with nothing to get back too if cruising doesn’t work or ends – another point for renting out the house.
The reduced disruption and the fact that we wouldn’t have to rent storage space have pushed us over the edge toward renting the house while we are gone. Financially, having the house makes sense as it provides a hedge against major changes in the world such as value of Canadian dollar, another market crash, zombie apocalypse 😉 etc. We now to need to scale back our stuff to fit the room in the basement, find renters, a property manager (we hope my brother will do it) and get rid of the stuff we can’t store.
Leaving is hard