Transcription
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>> I had a question. Um, my husband and I are finally able to live together after being married for 3 years. And um, but I own my house and he doesn't he he rents, but because of our job, you know, his house is the better option to live at. I'm just not sure what to do with my house. It's got that great interest rate. It's, you know, I'm not I'm not sure what to do.
>> What's it worth if you were to sell it today?
>> Um, probably two over 200 220 row um 122,000.
>> Mhm.
>> Sell it today and put 100,000 down on a new house. Both get out of his rent house and you find yours. Who cares about that stupid interest rate, man?
>> Yeah.
>> You don't want to be a longist landlord. People are parking their whole lives on a once in a millennium interest rate.
>> Yeah. Let's play this out a little bit.
>> Let's play it out cuz I I hear the doubt and we love doubt. Doubt's not bad. Love it. Let's put this to the test. Okay. So, let's say you keep it at that fabulous interest rate that you're in love with. Uh what do you think you would rent it for? Any idea?
>> Uh well, I think it depends on the runner. My my my daughter, she's an adult. Um she's actually interested in either renting it herself or buying it.
>> Let's keep playing this out. Let's play the renting thing out because you presented us with I kind of emotionally want to keep the house. Am I right?
>> Um no. I don't think I'm emotionally tied to it.
>> You seem very confused by John's suggestion. You don't want to give up your This is the last attachment to your former life.
>> Oh, is this true?
>> Oh,
>> and you may have gone through a divorce or somebody passed away and you got up and you dusted yourself off and you worked your butt off and bought a home and you've paid off half of it and by moving in with this person, your husband, by the way, this is the period at the end of that former sentence, right?
>> Yeah.
>> Well, I am just so nervous. I just hate the thought of so much of that new house payment going to so much interest. It just makes me sick.
>> So much so that you're going to have a $100,000 brick tied around your ankle when you move in with your husband after three years in a new state.
>> No, it's I mean I I move right now. That's
>> all right. Let me let me go back to where I was going.
>> Let me go back to where I was going. Here's why you shouldn't keep the house. Number one, you're going to be long distance landlord. I don't care if it's your daughter renting or someone else. True or false?
>> Well, two hours away. Yeah. Yeah.
>> The answer is yes, Ken. Okay. Next. Okay. All right. So,
>> and and let's add to that that issue. I'm not I don't know home repairs.
>> I know you don't. I know. I'm getting ready to make this situation worse. All right. So, you're two hours away
>> and you don't know anything about home repairs. You have to hire somebody. Now, let's talk about how much actual money you would make on renting this house. Okay? What I was trying to get at, I never got an answer from you, is is what is the market-based rent for that house? You don't have to tell me now because we don't need to get bogged down. But here's what I'm going to tell you. You will be shocked if you run the numbers, John, at what you can get in rent versus your mortgage payment. Okay? And let's just say you cleared three, four, 500 bucks a month. Is that a fair guess?
>> I could. Yeah. Okay, great. Let's say 500. Let's be aggressive in my example. Okay.
>> Okay. 500 a month times 12 is $6,000 a year. That's your gross that you're going to get. Then you got home repairs, somebody taking care of the house. That's all on you. So, you aren't even going to net $6,000 a year. All that nuisance, all that worry for maybe 3,000, 3500, 4,000 a year. It's just not worth it. That's why we were so quick to say sell it and move on.
>> Yeah. Oh, yeah. That's uh that's when you lay it all out like that, man. I really was stuck on the interest rate. Two 2.875.
>> I know. And I wanted to destroy the emotion around that because guess what's going to guess what? When you get a call at 10:00 on a Saturday night and you've just settled down with some ice cream to watch a movie and the and the person who's renting your house goes, "We had a water pipe burst." And you're going to go, "Ha,
>> man, that's a bummer." But 2.875% I'm doing the happy dance.
>> And then you're going to call somebody. They're going to say, "Cool. It's going to be $6,500 to repair it. We'll get it done on Saturday."
>> And then your then your tenants going to say, "Whoa, whoa, whoa. In our lease, you have to put me up in a hotel and I have to actually have two rooms because
>> there sell the house."
>> But you know, no, no, no. Cuz what you're going to do is you're going to go, "Man, that's a bummer.
>> Just out of pocket 10 grand." But boy, that interest rate is crazy.
>> I love that interest rate. No, no, no. It doesn't sound so good anymore. So, you would just sell it for anything I could get for it and then just put
>> No, that's you being dramatic.
>> No, sell it for market value.
>> I'm like that's what I'm wondering. What is the what you guys would recommend?
>> I would re I would get a I would get a real estate pro in that area and do and sell the house or I'm not opposed to you cutting your daughter a deal. You got $100,000 in equity
>> and maybe you say I'm going to knock off 25 grand for you because I love you or 50 grand. Who? I mean, you pick the number. I'm going to sell it to you for $1 150 grand. I'm going to take $50,000 into my um three-year-old marriage that we're finally combining our households. Honey, I'm not living in your gross rent house cuz sick. We're getting a new place and I got $50,000 to put down on it.
>> Yeah. And then your your daughter's got a great start. That's an I like that option.
>> That's actually what I wanted to do. And I talked about that with her, too. like if that's what they decided to do with her and a bunch like
>> I was going to say I was going to say as a parent uh don't do any um sweetheart deals just for the daughter. This needs to be a big girl deal now. Cut her cut her a break on the the the overall total, but don't start getting tricky with financing. She needs to be a big girl and she goes and does it just like everybody else
>> mortgage and buys the house from you. We're not going to shake hands and you just pay the mortgage.
>> That's my only concern. then you're going to blow up every Christmas from here the next year.
>> I told her, well, I told her flat out like, I'm 42 years old. I can't start out, you know what I mean? Like at a full house payment, like I need to have that chunk to put down to make sense where I'm at in my life. I don't want to start over. So, we gave you nothing.
>> We gave you two really good options, but they're both sell the house and let's let's move and let's And you said you were ready to go today. I think this is the last piece.
>> Yeah,
>> this is great. List it. Go listen. Go to ramseolutions.com and uh look up the real estate pros. Interview two or three of them. Have them come over and look at the house. Go with the one that you like the most that feels like they've educated you and let a pro walk you through this process and and to begin to exhale and get excited about this new chapter.
>> Can I do can can you do one exercise for me? I want everyone listening at home in this similar situation to do this exercise, but will you do this with me?
>> Can I do it as well?
>> You can. Can.
>> Okay.
>> All right. Are you ready?
>> All right. Lauren, close your eyes and I want you to picture
>> that interest rate. What's the number? 2.75 3
>> 2.875
>> 2.875. I want you to see those numbers. Okay, John.
>> Now,
>> I want you to um open your eyes real quick. That's a little pallet cleanser. Close them again. And I want you to imagine you're looking at your laptop
>> at your checking account that has $105,000, which is what you've cleared. Oh, I like it.
>> Which number do you like looking at more?
>> That big one.
>> That's right. Bank account. Sell the house.
>> Awesome.
>> And America, stop holding up your life
>> for a freaking interest rate.
>> If you got to move, if you got to change jobs, go. I loved that visualization because I was envisioning her money in my account. I don't know if that was supposed to be what happened, but boy, that's where I went. Create your free every dollar budget today.