Creative Mortgage Budgeting

[TurboPants]

Greetings magnificent people.
I searched the forum a bit for mortgage related topics but didn't find much related to this specifically. I have a $570 mortgage and am not making enough to save $6/mo worth of rent and utilities for the house to sit empty while I take a hike. The only thing I can think of is use HomeAway or AirBnB to rent it out while I'm gone. It's a pretty nice 2 bedroom house in a central location so I expect bare minimum I could rent it for 1 weekend a month. I'll also have to quit my job so that's a little scary! If anyone has suggestions or has read about other ideas I'm open to anything at this point. I just don't want to give up on my dream because of a mortgage. Thanks in advance.

[Slo-go'en]

Sell the house or give up your dream.

Renting can be nightmare if your not around to monitor the tenants. They can do a lot of damage in a short period of time and you have little recourse. They could also stop paying the rent after a month and trying to evict them is a real pain and expensive. You'd have to hire a rental management compony to oversee the deal or you could get screwed.

Weekend rentals are worse, someone would have to go in and clean up after every weekend and you'd have to have an agency to handle to bookings and other details. Then what do you do with all the personal stuff you have that you don't want them rummaging threw or stealing? You'd have to move it all into storage for an added expense.

And the real kicker is what happens if after a couple of weeks or a month something happens and your off the trail? You rented the house for 6 months and now you have to find a place to live in the mean time. Since 80% of those who start a thru hike don't make it, that's a real possibility.

[MuddyWaters]

Theres a number of potential pitfalls.
Yeaaah, people do it all time
But you expose yourself to liabilities


In many states there are codes governing rental properties.
Where I live, for example , you must have commercial insurance, and metal entry doors.

Should something go wrong....you could be sued. That 6 mo mortgage would be aa drop in the bucket.

If you cant sve $4000, how did you save money to hike?

[One Half]

if you are near hospitals you may see about renting to travel nurses. but yeah, you should have someone around to "manage" things. Travel nurses usually take assignments for 3 months at a time and expect "all expenses" included - so water, electric, gas and wifi. If you are on facebook check out some travel nurse housing groups to get an idea of what is expected. then see if you can either hook up with an agency that places TN or start advertising it yourself.

[Analog_Kidd]

Yeah, I wouldn't tent it out. Air bnb rentals require you to meet the tenant to provide instructions, give keys, etc. And you have to clean it every time. You can hire someone to do all that, maybe even a property mgt company would do it. If you are dead set on doing it contact one and see. of course you still don't have a guarantee of even renting it out.

You didn't say when you are going, but I'll assume 2020, since you have no money now. If this is your dream, make it haopen. You have a year to work like a fiend. Take three jobs and save every penny. Save enough to pay ahead your mortgage. You can easily make an extra 500 a month for a year and that would be enough to fund the trip and the mortgage.

You can also sell some stuff if you got anything. When it gets closer sell the car.

Get on a budget and see where you can cut corners. Stop eating out, ditch cable. You can always find ways to save.

[fastfoxengineering]

I would only recommend renting it out to a trusted friend or relative. Even then there are inherent risks. But if you really trust that person, just charge them enough to cover the mortage and bills while your gone

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[4eyedbuzzard]

You say you can't save enough money to pay the mortgage while you are off hiking for 6 months. What's that, 6 x 570 = $3420. But you've saved at least that much for hiking expenses, haven't you?
How did you save up the money to pay for hiking? Do the same thing to save up to pay the mortgage, and all the other life expenses that don't stop just because people go on vacations.

Or, just sell the house or rent it out through a local Realtor if you don't have the patience to wait and save. Typically Realtors can rent it, do background checks on tenants, manage the money and maintenance, etc for a percentage. Beware the quit job, spent savings on hiking gear, then quit the trail at Neel Gap scenario. It happens.

[TurboPants]

To fill in some blanks, the house on the same road as my parents who are getting older and to the point they'll need my help (only child, yay). This is why I rehabbed/gutted this house from nothing the last couple years so I could be close to help them. So I can't and won't just sell it. In terms of cash, I have a good start on savings right now ($5k) so the hike itself isn't a as big a problem as the mortgage. I just don't make much more than what my bills are right now and I'm already super cheap (no lights on, low thermostat, eat in 95% of the time etc). The points brought up have definitely scared me on potential rental nightmares, especially if I got hurt and needed to come home early.

All great points. This is why I asked, because I know many have been down this thought process.

[Slo-go'en]

Move your parents into your house and sell theirs or sell yours and move into theirs.

[IslandPete]

Move your parents into your house and sell theirs or sell yours and move into theirs.

^^^ This. Or save some more money so you can afford the hike...

[FreeGoldRush]

Rental property requires far more than accepting a rent check from someone. It’s a job and a business. This is not something you want to get into while hiking. And don’t expect to hire a management company to operate your new business idea for you and provide you with a profit. It does not work that way.

The reality is that we must earn our dreams, even if it’s just hiking.

[Slo-go'en]

The other problem is most renters would want at least a year lease. Six months is a bit short unless your house is on a lake and is a good summer vacation rental.

It seems a lot of people who have this "dream" of hiking the AT got the idea from watching YouTube videos and have never actually stepped into the woods before. If your one of those, make sure you do at least a 2 week backpacking trip somewhere to find out if it really is something you want to do for months and months. If your already a seasoned backpacker, never mind.

[Analog_Kidd]

Perhaps take on a roommate. They can pay you, and will have the place to themselves till you return. However it would be a dick move to kick them out once you return, especially if you get back early. So make sure it's someone you like.

[fiddlehead]

I was in the same boat back in the 90's when I did 3 thru-hikes (triple crown).
What I did was find room-mates.
Usually friends, but once, I put an ad in the paper and got a retired man who I am still friends with to this day.
It worked or me.
My savings went towards my hike, and their rent payments paid my mortgage.
I paid the balance off after the 3rd thru, and my hiking life got much easier to support.

[Slow Trek]

If your mortgage is with a local bank,ask if they will defer payments for 6 months. This will not be free,it will cost extra interest. If your mortgage is in the secondary or online market,don't bother asking. But if you have a great track record with a local bank,you might be surprised what they can do.

[perrymk]

I paid the balance off after the 3rd thru, and my hiking life got much easier to support.

I realize this is a bit of a thread drift but still partially applicable. My house is paid and I will retire with adequate funds to hike pretty much as I please, but I am not keen on giving up my house. What do you do now with your house when you hike/travel for more than a couple of weeks? Do you have a friend house sit? Have you used a house sit service?

I like the traveling nurse idea, I hadn't thought of that. I've thought about renting and pretty much dismissed the idea. I prefer not to live with roommates long term but might handle a week or so overlap if I'm off trail for a few days. My other thought is to find an older graduate student (not too far from two universities) and offer a free place (electric, wifi included) in exchange for mowing the lawn and sending me mail drops.

I'm still very open to ideas.

[rickb]

If your mortgage is with a local bank,ask if they will defer payments for 6 months. This will not be free,it will cost extra interest. If your mortgage is in the secondary or online market,don't bother asking. But if you have a great track record with a local bank,you might be surprised what they can do.

That is a creative idea!

Or you could take out a home equity loan.

$3500 over 5 years would almost certainly be under $100 per month.

Would that be a wise financial decision? Probably not for most people, but then again neither is quitting one’s job to take a hike.

That said, we don’t t know you — it could be a wise life decision

[fiddlehead]

I realize this is a bit of a thread drift but still partially applicable. My house is paid and I will retire with adequate funds to hike pretty much as I please, but I am not keen on giving up my house. What do you do now with your house when you hike/travel for more than a couple of weeks? Do you have a friend house sit? Have you used a house sit service?

I like the traveling nurse idea, I hadn't thought of that. I've thought about renting and pretty much dismissed the idea. I prefer not to live with roommates long term but might handle a week or so overlap if I'm off trail for a few days. My other thought is to find an older graduate student (not too far from two universities) and offer a free place (electric, wifi included) in exchange for mowing the lawn and sending me mail drops.

I'm still very open to ideas.

You ask what I now do when I travel or hike now that it's paid off.
I rent it out.
I ended up building an apt. for myself above the garage but now, rented that out too.
So, last year when I came back, I slept in a warehouse (no heat or water) on my property.
It works for me.
I got used to hiking so much that I'm comfortable anywhere and living in my house, alone would be such a luxury anymore, I don't even consider it.
I am in Thailand about 7 months a year now, and hiking somewhere in Europe or Asia for 2, then the rest back in PA.
I think life gets to a point where you figure out what your biggest priorities are and then make it work.
For me, hiking and traveling is more important than a big house with lots of stuff inside.
It's not only hiking that has me downsizing, living in Asia with smaller houses and lack of storage makes one feel more comfortable with less too.
A house is just a place to keep my guitars anyway.

[beefsmack]

I'd either move in with parents and rent it out or take on a roommate for the next year. A roommate makes the most sense to me because they could look after things while you are gone. I can't speak to weekend rentals such as AirB&B, but I have multiple rental properties and rarely have problems because my tenant screening process is so good. It is definitely a business though and not passive income! Bigger Pockets podcast and books by the same company are an excellent resource for getting into the rental business. Instead of deferring payment...find something to earn money from 5-9 and beef up that savings to where you can pre-pay your mortgage while gone hiking. No fees plus you will save a smidge on the interest!

[orthofingers]

Well, so far you've got a lot of reasons why you shouldn't rent it. They are all valid and many point out the potential pitfalls of renting while you're taking a long walk in the woods. But, that's not what you asked.

My wife is a realtor and someone is always looking for a short term (3-6 month) rental while their new house is getting finished or they sold their own house to a cash buyer and it closed much sooner than expected. Or call any large corporations in your area and see if they have people coming in for work for a short period of time. A good friend has a small rental house which he rented to the US Coast Guard. They put their own people in it who were here on temporary duty. They had very high standards and most of the time, there was no one in it but he still got a check every month from the Coast Guard.

You still need someone who can take the call for when the dishwasher breaks or a window sticks but, if you can get everything working properly before you depart, it could work for you. Keep us posted on how this works out for you.