Personally, I would either fix it up myself, or pay someone to do it, and sell it. 10 hours is too far away to keep an eye on it, unless she’s willing to pay someone to be the local manager. And if they don’t make their payments, then she’s going to have to drive ten hours to the courthouse to fill out the eviction papers, etc. What a hassle.
However, I agree with others that it is indeed her inheritance and hers to do with as she pleases. And I’d say this even if they had been married for thirty years.
And I back that up with action. My husband received a substantial inheritance about ten years into our marriage. My sole bit of advice to him about what to do with it was to spend it in a way that best honored his parents. After all, it represented their entire life’s labor. (FTR, our children have benefitted the most from it, as it’s funded their education. As is fitting, IMO.)
So, I’d advise the OPer to offer his opinion once and then to stay out of it. How she chooses to spend it will speak volumes about what kind of values she has and what kind of partner she’ll be. Honestly, whether she rents it out or sells it, either shows a ton more maturity than cashing it in and buying a Porsche. Know what I mean? So I think you’ve got yourself a keeper.
The house is about half paid off. At $100 a month, how long does it take before you earn as much from the rental as you would get from selling? A loooong time.
Just chiming in to say that I think your girlfriend should keep it and rent it out. The profit is more than $100 per month. It’s $100 + monthly repayment (less interest) + appreciation in house value. Given that house prices are low now, I’d hold on for a while, unless she has a real aversion to the potential problems of renting.
Are there any people who she knows that may be interested in renting it? If she knows and trusts people who would be interested in renting it will definitely be worth it. I’d even consider offering a slightly reduced rates to people she knows to encourage their renting as it would reduce the chances of headache.
Update: GF has decided to sell. I think that’s what she wanted to do anyway, and after we discussed some of the issues raised in this thread, she feels more confident about it being the right financial choice in her situation, and much less hassle. Thanks to all for the input.
I am a commercial real estate agent with over 20 years experience and I sell commercial industrial and investment properties for a living. At first glance the obvious answer is “sell”. 10 hours away is too far to properly manage a single unit residential investment unless you have an amazing tenant willing to properly handle detail items.
The only negative to selling at this time is that it is likely (IMO) your house will appreciate substantially (far faster than inflation) over the next few years as the housing market recovers. Also, you are in a very desirable price range where a well kept house in good shape can sell more or less instantly.
If I were in your shoes I would probably do the following. I’d go just a bit under market on the rental price to make it super attractive and then be extremely selective about finding the perfect tenant (ie long term 3-5 year lease, require financial statements, rental history etc) and have a very explicit understanding that they will take care of small detail maintenance items.
I would rent for 3-5 years then sell and I think at that time there would be a very substantial increase in the value of the house. If I could not find this perfect tenant I’d sell immediately.
I agree with this. To the OP, until you’re married you really shouldn’t profit from your girlfriend’s windfall. Why not have her sell and just pay down her debt? If there’s anything left and you do get married then you can decide how that money can be used together. I’ve seen all too many gf-bf couples who are so sure that they will marry and don’t.
That’s probably the right thing to do, especially if she feels pretty good about it. I had a townhouse here in Calgary that I bought before the big boom, and if I had held onto it, I would have made, oh, 400% profit or something on it, but I couldn’t afford to hold onto it at the time due to job problems, and I made the right decision for the time. You really can’t look back on things like that and say what you should have done; you just make the right decision for what you are dealing with now.
(People not reading the thread and still feeling the need to comment are annoying as hell, I know. They’re probably not reading this, either.)
Hey, it’s IMHO. If you don’t want other opinions, go to GQ. Of course I read the thread and I agree with the previous poster. If I were advising your gf I’d tell her to sell and keep all the proceeds and spend it as she sees fit. If she wants to gift you some money to pay down your debts that’s her call.
Whatever confusion re his OP I think he had expressed repeatedly to several similar prior posts by the time you answered, that he had no intention of using her house equity on his debts. Re-addressing it once again after he’d addressed it multiple times is kind of annoying.
Jesus, people are so stupid. How the hell do you hang onto a piece of property for emotional reasons (as some people are suggesting). How does that make an iota of sense? A home is where your family is, not the damn plaster and wood. Astro’s advice is spot on. But if you’re not smart enough or willing to pay a lawyer to draw you up an airtight lease, I say you sell it. Which, if you’re asking a message board, you should have done in the first place anyways.
The vast majority of people are simply NOT meant to be landlords. They lack any and all knowledge or street smarts to go about it. It doesn’t surprise me much anymore, sadly.
Yeah, my Dad who was country head of a global oil company in two different countries and retired at 50 to travel the world was a real idiot to struggle with the decision to sell his parents’ house, which they built in 1941 and lived in through a 60 year marriage. Doofus! Clearly not smart enough to put finances before emotional connections.
In some cases, it does. It doesn’t sound practical and certainly not logical. But emotions never are, especially if the house is the GF’s childhood home.