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Our Rental Condo Investment

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Our Rental Condo InvestmentI just signed a lease with a tenant for our rental condo! This is great news because the unit has been vacant since November. The extended vacancy really sucks. We had this condo since 2011 and this was the longest vacancy we’ve seen yet. The previous longest vacancy was just 25 days. Winter is a terrible time to look for renters or buyers. We also had a tough time finding a tenant because there is a building under construction next door. Many prospective tenants don’t work regular hours and they didn’t want to deal with construction noise.

It worked out for the best, though. I have a good feeling about our new tenant. She has been in the workforce for awhile and seems to have it together. Our condo is right next to a college campus so I’ve been showing the unit to many students. I like students, but older renters with stable jobs tend to be easier tenants. College students aren’t going to stay long. They have many changes ahead of them. Our new renter may turn into a buyer too so this might work out for everyone. Anyway, I’m very happy our condo is rented out. Today, I’ll tell you a bit more about our rental condo investment. Our complex has a pretty interesting history. After that, I’ll share how the investment is working out.

Condo history

Our complex has 3 almost identical towers that were built in 1965. One of these 3 was the tallest building in Portland for about 4 years. That’s pretty neat. These buildings and the historic Halprin Open Space Sequence were part of the first urban renewal project in Portland. Back then, cities were falling into decline and residents were moving to the new suburbs. This area south of downtown was a Jewish and immigrant neighborhood. The city condemned 54 blocks for redevelopment and relocated more than 1,500 residents. Here is an aerial picture of what the area looked like in 1935.

Urban renewal

By 1964, most of the buildings were razed. This image below is looking north. If you’re familiar with Portland, you can see the old US 99W freeway on the right edge of the picture. Traffic was rerouted to the I-5 across the river in the 70s. The Tom McCall Waterfront Park replaced the old freeway.

South Auditorium district

Our buildings went up in 1965. This image is looking west.

South Auditorium Portland

Our complex was built as apartments and they stayed that way until the real estate bubble in 2006. A developer purchased the complex and renovated them. Two towers were turned into condos in 2006 and 2007. The last one didn’t finish renovation until 2008, but the real estate bubble had popped by then. The last tower was turned into an apartment complex presumably because nobody was buying in 2008. Many units in the 2 earlier buildings were foreclosed or turned into short sales.

Purchased in 2011

Previously, I haven’t talked much about this condo because we co-own this unit with my brother. This condo wasn’t meant to be a rental when we purchased it in 2011. We were hoping my parents could live in this unit. They had just moved back to the United States after living in Thailand for 10 years. We lived in the next building so it would be very convenient for everyone. However, my dad didn’t like living in the US and moved back to Thailand. My mom stayed in the US and she didn’t want to live alone. She preferred to live with her kids. She lived with us in the summer when the weather was nice and went to stay with my brother in California in the winter. Now that she’s older and needs more help, she is staying with us full time. Moving back and forth caused minor anxiety and confusion. This problem is not severe at this time, but she prefers to stay put in one place.

Anyway, we purchased the condo in 2011 as a short sale. This was at the bottom of the financial crisis and we got a pretty good price on the unit. The purchase price was $140,000. It was a significant discount from the previous transaction. The condo was sold for $240,000 when they finished renovation in 2006. Today, the condo is worth around $270,000.

Unfortunately, this building hasn’t seen as much appreciation as the other condos in Portland. I guess it is because of the age. We love living here, though. It’s less noisy here than the rest of downtown and it is still very close to everything. We can walk, bike, or take the streetcars almost anywhere. The only major drawback is that we don’t have a washer/dryer in our unit. Residents need to go down to the basement to do laundry. Also, the HOA fee is pretty high.

Turned into a rental condo

After my dad moved back to Thailand, we turned the condo into a rental. In 2011, we rented it for $1,075 per month. Now, the rent is $1,350 per month. This is the market rate for our building. Other units around this area charge 10-20% more rent because they are newer. You can see more detail about our rental income at my Passive Income page.

Cash flow

Unfortunately, our rental condo has negative cash flow even with $1,350/month rental income. The HOA fee and property tax has increased over the last few years.

Rental income: $1,350

  • HOA: -$505
  • Property tax: -$360
  • Mortgage: -$570. (We probably should have refinanced the unit to bring the rate down. Our current rate is 5.25%. We talked about it, but we kept putting it off because we were going to put it up for sale. It looks like the mortgage would reduce by about $100 if we refinance.)

This means our cash flow is -$85 per month. We co own this unit with my brother so it’s really not too bad at -$42.50 per month each.

Price appreciation

I think the Portland real estate market is expensive at this point. The price probably won’t appreciate that much over the next few years. That’s why I put it up for sale at the same time I put it up for rent. Unfortunately, our unit overlooks a new building under construction next door so we haven’t had much interest from buyers. We should have better luck with selling it once the building next door is completed. These new apartments will be more expensive to rent and probably smaller than our condo. There are 4 high rises going up in our neighborhood. I guess it is fine as long as people are still moving to Portland.

Anyway, we’ll put the unit up for sale again when we get a vacancy. I hope our new renter stays at least a couple of years. The building next door will be done by then.

I’m about ready to cash out and move the money to RealtyShares. Real estate crowdfunding is a lot more passive than being a landlord. That’s okay. I can be a landlord for a couple more years. This unit isn’t that much work because there are only a few appliances inside. The HOA fee takes care of everything outside the unit. It is only a lot of work when there is a turn over.

Alright, I hope you enjoyed reading about our condo. The cash flow isn’t great, but we should make a nice profit once we sell the unit. Hopefully, the housing market stays steady for a few more years. Let me know if you have any questions.

*Late breaking update – Ugh! The prospective renter backed out on the lease. There is a family issue so she can’t move at this time. Oh well, I’ll put the condo back up for rent. I’m bummed out.

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Joe started Retire by 40 in 2010 to figure out how to retire early. He spent 16 years working in computer design and enjoyed the technical work immensely. However, he hated the corporate BS. He left his engineering career behind to become a stay-at-home dad/blogger at 38. At Retire by 40, Joe focuses on financial independence, early retirement, investing, saving, and passive income.

For 2018, Joe plans to diversify his passive income by investing in US heartland real estate through RealtyShares. He has 3 rental units in Portland and he believes the local market is getting overpriced.

Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help every investor analyze their portfolio and plan for retirement.
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{ 67 comments… add one }
  • Mrs. Groovy February 12, 2018, 7:37 am

    Oh man! I was about to congratulate you! That sucks. I guess it’s better that she backed out now than cause more problems for you down the road, but it’s disappointing.

    Hang on, you’ll get a bite from a better fish soon.

    • retirebyforty February 12, 2018, 8:44 am

      I was really bummed out when she told me. I guess I shouldn’t get my hope up so high and treat it like business.
      The weather is nicer so it should be better very soon.

      • snowcanyon February 12, 2018, 9:30 am

        Still unclear why you haven’t sold a cash-flow negative asset in a hot market?

        • retirebyforty February 12, 2018, 11:21 am

          There is a building under construction next door that will block the view. Buyers are reluctant to buy at this point. Once the building is done, it should be easier to sell.

          • snowcanyon February 13, 2018, 6:59 am

            Have you tried listing it just to see? Seems like everything sells in Portland…

          • retirebyforty February 13, 2018, 10:57 am

            Yes, I tried listing. Buyers are not interested mainly because they’ll lose the view.

      • Cubert February 13, 2018, 3:32 am

        Hey there, Joe! I know the feeling on this topic. It sucks to have vacancies for even ONE month! Curious if you’ve tried a couple of things – 1.) Stage the bejesus out of the place. Even if you have to haul in your own nice sofa and dining table/chairs. Sometimes you can pull off a sweet bedroom with a disguised air mattress. I’ve found I get huge interest with great pics in my listings. 2.) Do you offer incentives for 2+ year leases? I’m happy to knock a few bucks off each month, say, from 1,350 to 1,325 with a 2-year. 3.) Finally, you have the benefits of depreciation and business tax deductions, so you’re doing fine, net-net, even likely above net-zero after all the tax stuff. Small solace, but it’s something.
        Good luck – I’m sure you guys will figure this one out. It is odd that in Portland you’d be hard up for tenants, but each market, even the great ones, has its nuances.

        • retirebyforty February 13, 2018, 10:56 am

          Thanks for the ideas. I’m listing apartment separately from parking now. This is generating a lot of interest. Other apartments in the area do the same thing. There are many students here and they don’t have a car. I can rent out the parking spot to other resident if needed.

  • J.D. Roth February 12, 2018, 8:09 am

    Huh. I knew some of the history of that area, but learned a lot more from this article. Thanks, Joe. For me, one of the fun things about living in any given place is learning its history. I feel like history provides context. (And in the U.S., most folks don’t give a fig for local history in any way.) Growing up in Canby, I knew lots of the local history (in part because my family had been there for 100 years). When I moved to Oak Grove, I learned about its history. Same with Sellwood. And now I’m learning about West Linn.

    Anyhow, this sort of thing probably isn’t as interesting to most of your readers as it is to me. But I say publish more of it haha! 🙂

    • retirebyforty February 12, 2018, 8:46 am

      You’re welcome! We have a few readers from Portland and I thought this would be very interesting for them.
      The area is nice now, but I imagine it would developed organically even without Urban Renewal. Who knows.
      I do’t know anything about Canby and Oak Grove. 🙂

      • Matt February 12, 2018, 10:01 am

        Always like history as well.

        As far as Portland, my family actually came there in a covered wagon on the Oregon Trail back in the middle of the 19th century and my Mom grew up there before moving away, so it is good to see.

  • BusyMom @ CountdownToTranquility February 12, 2018, 8:09 am

    I was just about to congratulate you. I know exactly what it means to have it empty.
    We have two condos in India, that we rent out now, and will sell sometime in the next few years.

    • retirebyforty February 12, 2018, 8:53 am

      I’d love to sell, but it’s tough because of the construction. Nobody wants to buy the unit because they’ll lose the view. Once the building next door is done, it should be easier to sell.

  • Mr. Tako February 12, 2018, 8:13 am

    Oh man… that update at the end was a real bummer. Extended vacancies can be really tough, but having negative cash flow month after month must be even tougher.

    This is one of the many reasons why I like to hold my real estate as REITs or through other vehicles. When you only own a few properties, one bad tenant, extended vacancy, or bad HOA can kill the investment.

    Good luck Joe! Hope you manage to sell this unit.

    • Mr. Tako February 12, 2018, 8:14 am

      P.S. I love all the old pictures. Nice job finding them for this post.

    • retirebyforty February 12, 2018, 8:54 am

      Negative cash flow really bites. At least we make enough from our duplex to cancel it out. Hopefully, we’ll be able to find a good tenant soon. It’s not a good time to sell because of the construction next door.

  • Lily | The Frugal Gene February 12, 2018, 8:15 am

    Aw Joe that sucks! Winter is a terrible time to find renters. We talked to an agent about possibility of long term rental for our rental and she literally told us to just wait until March. All part of the RE game…I hate this game.

    Summer’s coming, I’m sure you’ll get more offers very soon!!

    • retirebyforty February 12, 2018, 8:55 am

      Good luck with your Airbnb too. Nobody wants to visit the NW in the winter. 🙁
      I’m so ready for nicer weather.

  • Tom @ Dividends Diversify February 12, 2018, 9:06 am

    Gosh Joe. What a disappointment. I’m glad you can hang your hat on the appreciation. I have never been to Portland. I like the old pictures. Where did you get them? Tom

    • retirebyforty February 12, 2018, 11:12 am

      The old pictures are from the internet. They are very old so I’m pretty sure they are public domain. I’ve seen similar pictures at the Oregon historical society museum.

  • Ms. Frugal Asian Finance February 12, 2018, 9:07 am

    Oh no I’m so sorry the prospective tenant backed out. The good thing is spring is coming. One more month, and everything will be blooming and pretty!

    We plan to take care of our parents in the future too, but we also know it’s a lot of trouble living with parents. I hope we can find a duplex or something so that we can live on different levels. Family drama can get really stressful!

    • retirebyforty February 12, 2018, 11:13 am

      It’s tough living with parents especially in a small condo. My mom woke my up this morning because she was on Skype to Thailand. It’d be great to move into our duplex so we can all have more space.

  • GYM February 12, 2018, 9:09 am

    I was so excited for you and then I read the last part 🙁 sorry what a bummer! I hope you are able to sell or lease it soon. With the nice weather rolling around soon that should happen soon for you. Thanks for sharing all the cool pictures and history of the area! That’s cool that you bought it initially for your parents to live. Did you end up taking your mom to see her doctor about her memory?

    • retirebyforty February 12, 2018, 11:15 am

      I got a few leads already this morning so I’m hopeful. We’ve been seeing her primary care physician. She’s going to see a neurologist next month. It’s just part of getting old, but she’s getting it earlier than normal.

  • gayle February 12, 2018, 9:09 am

    Oh No !! Sorry to hear about your condo !!! Spring is coming !!! It will rent soon ! Wanting your opinion..I have a cute little studio in Chicago..I only make $110 positive cash flow a month..but I get amazing people in there..its a great part of Chicago..I have about $76,000 in equity ! Im wanting to keep it in the family and pass on to my kids..my hubby says get rid of it ?! What are your thoughts ?

    • retirebyforty February 12, 2018, 11:16 am

      Your condo sounds okay for now. You’ll have to work it out with your husband. 🙂
      If the equity is growing, I don’t see why you need to get rid of it. Assuming it’s not a lot of work.

      • gayle February 12, 2018, 11:20 am

        Thanks Joe ! Its beyond easy to take care of..Im going to pass it on to my Kids..Thanks I value your opinion !!! Hoping yours rents soon and with an excellent tenant !!!!!

  • Financial Samurai February 12, 2018, 9:15 am

    Joe, how does the back up system work? The prospective tenant put a deposit down that you cashed? Did they sign the lease?

    Sorry this is such a hassle. Do you share the calendar with your brother 50-50?

    Sam

    • retirebyforty February 12, 2018, 11:19 am

      I’m going to return the deposit. I wasted a week of time, but it’s not a huge deal.
      Legally, I’m pretty sure I can keep a month of rent because that’s written into the break lease clause. I don’t want to go to court, though.
      Share calendar? We share the cost about 50-50 and will split the profit after we sell the unit. I might try to renegotiate to 60/40 because I’m doing all the hard work here. He’s a passive investor in CA.

      • Sam @ Financial Samurai February 13, 2018, 9:39 pm

        Sorry, typo. Calendar should be condo. I was using voice dictation.
        I’m thinking the hassle is not worth the income, especially if you have to split the rent. It doesn’t move the needle for you, so I would just lower the rent to boost the pool and find the best tenant possible. Giving up $50/month or $100/month seems like nothing for a man of your stature!

        • retirebyforty February 14, 2018, 8:44 am

          I decoupled the parking so the price looks lower. There are many students in the area so it should be easier to rent now. I’m meeting a bunch of people this week so I’m hopeful. Yeah, just get it rented for now.

  • [email protected] February 12, 2018, 9:19 am

    Your tenant backed out and our buyer for our 8-unit place backed out last week! We hope you find a new renter soon. Spring is coming and hopefully that will help!

  • Helen February 12, 2018, 9:23 am

    Hope that condo works out soon, either renting out or selling it. Being a landlord is tough, and needs a lot of patience. The HOA fee $505/month is even higher than the property tax. That’s very expensive. To me, even the maintenance for my house is a hassle. I’m just not a landlord person.

    • retirebyforty February 12, 2018, 11:20 am

      The HOA is very high here. It’s comparable to much newer buildings. There were various repairs and new security measures also cost money.

  • TJ February 12, 2018, 9:32 am

    Thank you for sharing your story with a rental. Things can go wrong and I’ve found it’s best to plan for those days. Best of luck either selling or renting it out as soon as possible.

  • Chris Urbaniak February 12, 2018, 9:55 am

    Joe, that really sucks: Obviously because now you’ll have more vacancy, but emotionally because you were all set with the “ahhh” moment following the turn-over activities. Stay strong 🙂 I hope you find someone quickly.

    I wonder the same thing as Financial Samurai: Did you get a deposit that you can now hold onto? In Ontario most landlords collect “last month’s rent” when the lease is signed and then first month’s when you hand over the keys. We’re not legally allowed to collect security deposits.

    Also, I really love the old pictures and your narrative. Similarly, our local newspaper publishes about 5 or 10 archive images each week from around our community. Last week actually showed our subdivision in 1977 after they cleared the roads but before the houses went up. Very neat!

    • retirebyforty February 12, 2018, 11:23 am

      I was crushed when I heard the news. The light at the end of the tunnel disappeared! Oh well, back to the drawing board. I got a few leads already so I think it will be rented out relatively quickly.
      I’m going to return the deposit in full. I don’t want to go to court over this.

  • Revanche @ A Gai Shan Life February 12, 2018, 10:19 am

    Aw, I’m sorry to hear your good renter had to back out! My fingers are crossed that you’ll get another really good prospect soon.

    Your appreciation may not be as high as some others but it’s certainly been good! And your location will remain desireable for a while longer, I think, Portland still seems to be high up on the Move To lists. Our rental has appreciated a lot more than I thought it did (I usually ignore the valuation since I’m not going to sell for a long time) but that’s still all on paper.

    Oh I should ask, though, where do you get your numbers for the appreciated value and how do you track it? I have only used our county tax assessed value which is apparently $30-40k behind the market estimates. I err on the side of being conservative since gains are only on paper until and if we sell. Which would you use?

    • retirebyforty February 12, 2018, 11:26 am

      I got a few prospects already this morning. Hopefully, they’ll be okay with the construction next door. That’s a tough sell if they work from home or non-regular hours.
      We put this unit on sale so the number is about right. County AV is usually a little low. I think being conservative is good too. It’s paper gain until we sell. I haven’t updated our property value in my spreadsheet for over a year.

  • Done by Forty February 12, 2018, 11:01 am

    Sorry for the last minute back out, Joe.

    Our rental in Indianapolis was also vacant since November 1st, and having to pay the utilities in the winter is no fun at all. I keep thinking we should sell, and that’s why we, too didn’t refinance the past couple years: we’re at 5.25% as well. Great minds?

    We got a renter at the beginning of the month so hopefully this puts us in a better part of the year for the next time we have it vacant. Best of luck with the condo and I hope you get a new, good tenant soon, and that they stay for multiple years.

  • Accidental FIRE February 12, 2018, 12:00 pm

    Good luck with your new tenant Joe and thanks for the Portland history lesson. Love the old pics!

  • Angela @ Tread Lightly Retire Early February 12, 2018, 12:03 pm

    Oh no! Just read the astricks down below! The good news is we’re heading into the better time of year for rentals (listing in the winter is really just the luck of the draw). I’m wondering though if it isn’t worth listing it for sale now versus waiting a few more years.

    • retirebyforty February 12, 2018, 1:20 pm

      We haven’t had much luck with sales either. The construction next door is a huge turn off for buyers.

  • Ditching Your Desk February 12, 2018, 12:14 pm

    The long vacancies are killer. We ended up listing ours with an agent to get it rented after a longer-than-anticipated vacancy. It’s a tough call with the commission but in our area it’s common for renters to go through agents and we got someone right away. Good luck!

    • retirebyforty February 12, 2018, 1:19 pm

      That would be our next step. Activities seem to be picking up now, though. Hopefully, we’ll get it rented soon.

  • jim February 12, 2018, 12:29 pm

    Oh that sucks that they backed out. I’ve had that happen a time or two myself.
    You can spend a whole month trying to fill a place, interviewing tons of people, showing it, taking applications, doing credit checks, deciding who to rent to, etc and then the person backs out and you have to start all over because at this stage everyone of the other prospective tenants had moved on and found somewhere else. 🙁

    I appreciate the interesting history and the cool pictures, thanks for sharing.

    You said: “We probably should have refinanced the unit to bring the rate down. Our current rate is 5.25%. We talked about it, but we kept putting it off because we were going to put it up for sale.”
    We’ve been in that exact same situation with a rental too. WE alternate between thinking we should sell and refinance and end up just doing nothing.

    Jim

    • retirebyforty February 12, 2018, 1:19 pm

      Exactly! It was such an emotional let down. I moped around for hours after I found out. I’ve got a few promising lead already so maybe it will be easier now. Refinancing is no fun. My wife hates it.

  • Steve @ familyonfire.org February 12, 2018, 2:17 pm

    Ouch that sucks. That’s a nice part of Portland with good amenities. We live a bit further out but always enjoy coming into downtown.

    • retirebyforty February 13, 2018, 10:50 am

      This area is great. It’s downtown, but not too busy. Other parts of downtown are much more sketchy.

  • Steve February 12, 2018, 3:01 pm

    Aw that sucks, I am sure you will find a tenant soon. I am not the landlord type so I stick with REIT. Thanks for sharing the history and awesome old pictures.

  • Joe February 12, 2018, 3:10 pm

    Interesting reading about rentals in other areas. I have rental condos in the SF Bay Area, bought them as short sales in 2012 for 105K and 110K. Rented for $1500 and $1575 in 2012, could rent for $2400 each now but I’m charging only $1800 for long-term trouble free tenants. Price appreciated to $350K each by 2016, not much change since. HOA $305 a month. Your HOA fee is nuts!

    • retirebyforty February 13, 2018, 10:52 am

      That’s a great price for the Bay Area. Nice job for taking advantage of those opportunities. The HOA fee is pretty crazy. There have been many repair and maintenance projects. I think it will come down a bit next year.

  • Lazy Man and Money February 12, 2018, 4:11 pm

    That HOA-to-rent difference/ratio is super high. Now I see why you want to get rid of it. We have two properties that we rent for $1375 and $1400 and their HOAs are around $300. They used to be much lower, but they needed massive renovations (poor planning by the condo board).

    The property tax is very high too, especially for not owning any actual land.

    It just seems like a poor place to be a landlord in general. The market seems very unbalanced.

    • retirebyforty February 13, 2018, 10:53 am

      Your HOA fee is much more reasonable. Our HOA is high. I think it’s due to the age of the building and location. We need more security.

  • Nicoleandmaggie February 12, 2018, 4:11 pm

    Good luck!

  • Dave in Sunny FL February 12, 2018, 4:56 pm

    Real estate pays you five different ways: appreciation, cash flow, depreciation, mortgage pay down by the tenant, and inflation. The last of those refers to the fact that you borrow in present dollars, and re-pay the loan with inflation-weakened dollars, years in the future. There are other real estate benefits, of course, like deduction of business expenses and the 1031 exchange. You may not want to wait until the unit is vacant to list it for sale. An investor would love to have a tenant in place; and when the unit is vacant, you may feel more pressure to sell at a lower price.

    • retirebyforty February 13, 2018, 10:54 am

      I don’t think this is a good unit for investor. It’d be a great unit for someone who wants to live downtown.

  • Mr. Groovy February 12, 2018, 7:03 pm

    Hey, Joe. That condo looks pretty damn nice. Sorry the prospective tenant had to back out. I’m sure you’ll get it rented soon enough. But the wait isn’t fun. How come Carlton Sheets never talked about vacancies in his awesome real estate “course”?

  • Adam February 13, 2018, 6:15 am

    My wife and I visited Portland for the first time last July; before that we hadn’t been to the PNW before. It’s a whole different world from our DC-area home and upbringing. We really enjoyed the climate (albeit during that stretch of dry heat), the culture, and the topography. I would love to live somewhere in the summer with cool nights and no crippling humidity.

    Best of luck with getting that space occupied. Sounds like there’s no lack of interest, just random bad circumstances for your prospective renters. When is the construction next door due to be complete?

    • retirebyforty February 13, 2018, 10:56 am

      Portland is really nice in the summer. It’s better than many parts of the country. The winters are long, though.

  • Littlemissfire February 13, 2018, 6:57 am

    I love seeing the pictures and reading about the history of the condo. So sorry to hear she backed out.

  • [email protected] February 13, 2018, 7:02 am

    Sorry to hear the prospective tenant backed out. With the small amount of cash flow and the appreciation, I guess it would make sense to sell when the construction is done as you mentioned. I’m not sure if the HOA would allow or if it’s in a prime location but would you consider renting it out as a short term rental to increase the revenue.

    • retirebyforty February 13, 2018, 10:58 am

      The HOA does not allow Airbnb. I’d love to try that if possible. This unit would be a great Airbnb unit.

  • Caroline February 13, 2018, 10:23 am

    My rates are between 2.89 and 3.09% on my three rentals and I was complaining! I won’t anymore:) Being a landlord is a tough business, I always go back and forth on whether I like it or not.
    Hope you find a tenant soon. I have a vacancy coming up and not looking forward to it.

    • retirebyforty February 13, 2018, 10:58 am

      Those are great rates. Nice job. Being a landlord is good when things are going smoothly. 🙂

  • K. McGarrett February 13, 2018, 11:18 am

    Just watch you don’t get burned with a large levy. We paid $23,000 for new roof and siding on our older condo a few years ago. After 20 years the refurbishment and renos never stop. New or newer is the way to go I think.

  • Alex February 14, 2018, 9:21 am

    I don’t know if it’s worth it at current rates or with a balance as low as you have, but you might be able to do a no cost refinance into like a 10 year loan. Just pay a higher than nominal rate and the negative points cover the refi costs. If you don’t plan to keep it long you get some interest rate savings without worrying about recouping refi costs. The only downside is some (a lot of) paperwork, and if you keep the mortgage longer you may wish you paid to get the lower rate.
    We did something like this, we went from a 30 year at 3.9% to a 10 year at 3.1% for free, about 4 years into our mortgage because we decided we wanted it paid off so were paying off like a 10 year anyway, figured we should get the interest rate benefit. Could have gotten in at like 2.7% if we paid the refi costs.

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