Friday, July 15, 2011
To Risk Or Not To Risk? That Is, Indeed, The Question.
So Jonah wants to buy another house and either rent that one out or move into it and rent our current house. Obviously, the goal is to have an investment that hopefully will prove to be a source of income. Jonah says that since we aren't intending to have children and, therefore, will have no one to take care of us when we get old that it might be beneficial to create something that will provide us with a nest egg.
Home prices where we live are amazingly low, and we could get a really nice piece of property for relatively cheap. If we choose to live in the new property, we would be paying a much lower mortgage for a house that is equivalent or better than our current one and then our renters would be paying for our current mortgage, and perhaps we could get a profit.
If the renters live in the new property, we could charge rent that is higher than the mortgage and, therefore, pay for the property and make a profit as well.
I have friends who have bought properties and rented them out, and they agree that, if done right, such a venture could be profitable and beneficial
This sounds all well and good in theory, but I must admit it makes me nervous and anxious. First of all, I feel I'm out of league as far as real estate is concerned. Secondly, if we go about it the wrong way and can't get anybody to rent the property (or can't get them to rent it for as much as we want or need), then we will be stuck paying for two properties when I feel I am barely able to pay for the one we currently have. I do not feel I am a gambler or a risk taker, and there is always a gamble or a risk involved in such a deal.
I will say this: Jonah has very good instincts. When it comes to his gut, Jonah is right about 99% of the time. He feels this is something we should at least try to do (or, at the very least, research), and because experience has taught me so, I am trying to trust his judgment and get on board.
Jonah's parents had the opportunity early in life to buy property, and they didn't, thinking it would not be worth it. That same property they failed to acquire is extremely valuable, and Jonah wonders if some of their present financial difficulties could have been averted had they bought it when they had the chance. Jonah doesn't want to make a similar mistake with us.
Jonah also has some money saved up to do this and also has a wealthy friend who would likely to be willing to help us out if we need it. I, on the other hand, do not feel that my own finances would be adequate for such a venture.
I've been taught my whole life to stay out of debt. I already have car payments and student loan payments I am still making as well as our mortgage, and if this venture were to fail, I would be in serious debt.
I'm also not eager to be a landlord. I don't want to deal with any of the headaches such as late rent or maintenance concerns.
Yet it could be a good investment, and furthermore, it could actually improve my financial situation.
Jonah has started sending me properties to look at. It reminds me of when we were looking for our present home and how overwhelming and stressful it felt to me (plus how long it took to find just the right place). I've been looking through some of these places, and there are, indeed, some really good deals, but it's giving me a bit of anxiety as well.
Jonah says (often) that we have to guide our lives by faith, not fear. And like I said, while I consider myself a practical, pragmatic guy, Jonah's leaps of faith are usually spot on. Where I can only see the present reality, Jonah sees possibility, and even though he doesn't always know how things will work out, he believes they will, and he is usually right.
If we do this the right way, it could be a really good thing. If we go into it the wrong way, it could be disaster. As I've thought and prayed about this, I found it interesting that a friend's Facebook status leaped out at me today. It said simply: "If you do it, you'll regret it. If you don't do it, you'll regret it. So you might as well just do it."
Jonah knows that I carry a bit of trepidation. But he also knows I'm genuinely trying to have an open mind and heart. I know, ultimately, he is looking out for us. But is this the right thing to do? I still don't know. I just know I'm feeling anxious about it.
So, what about any of you? What are your opinions? Do any of you out there have any experience with real estate deals or renting? What advice do you have? I welcome any thoughts on this.