Sunday Gathering – Update on our rental house

by glblguy | Posted in Friday Gatherings | 8 Comments

for-rent

Those of you who have been following me here on Gather Little by Little will recall that last year we decided to move up to the NC mountains.  We put our home in Charlotte, NC up for sale and began house hunting in and around Waynesville, NC.  Within a few weekends we found the perfect home, made an offer and inked a deal for purchasing it.  Only one problem: our house in Charlotte never sold.  We finally decided  to rent it using the services of a property management company.

I’ve received a number of inquiries from various readers asking me if we ever sold the house and if not how things were going.  Renting our home has worked out really well thus far.  With the exception of this month, our tenants have always paid their rent on time.  I say with the exception of this month, as it seems our tenants ran into some cash flow issues this month but I’m expecting to receive  the check early next week. Our property management company has been awesome to work with as well.  To be honest, renting has gone so well that I’m not sure I would even considering selling a house in the future, but always look at renting.

Now, with that said I realize I’ve only had one tenant and have only been renting now for a few months.  I’ll of course continue to evaluate this and update you on anything interesting, but so far so good.  The value on the home continues to rise as well, which is making it a great investment property too.

Important Stuff!

Just a few important reminders this week:

  • The YNAB discount coupon expires tomorrow! If you’ve been wanting to start a budget than here’s your chance to do so using the best budgeting software available AND get it for 10% off.  I promise this isn’t just an empty sales pitch either.  I use YNAB Pro to do my own personal budget and love it.
  • 30 Day Budget Challenge – Just a reminder that if you made a commitment to my 30 day budget challenge, we’re now over half way through the month of May.  How are you doing?  Are you on budget?  Are you keeping it updated?  Are you reviewing it with your significant other?  I’ll write a post next week asking you to share you progress!
  • Trent who writes at The Simple Dollar released a free eBook: Everything You Ever Really Needed to Know About Personal Finance On Just One Page.  The eBook expands on a few posts he wrote sometime back.  Great stuff and free!

Favorite Reads:

Here are some of my favorite reads this week:

Photo by: TheTruthAbout…

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Home vegetable garden

by glblguy | Posted in Home Vegetable Gardening | 7 Comments

home-vegetable-garden

My wife loves working outside and gardening.  As a child, she worked with her parents on their home vegetable garden and has always had a vegetable garden of some kind since we purchased our first home.  Until now, we never had much room for a large vegetable garden.  Prior to this year, we used alternative methods which included a container vegetable garden and square foot gardening.  Those worked well of course, but never really yielded a large amount of vegetables, at least not enough for canning which is something I’d really like to do.  I love canned green beans and corn.

Finally some room

One of the many things we liked about our new mountain home was that we finally had some land.  My wife started our garden during the winter by purchasing seeds and planting them in seed starters.  We literally had a miniature green house on our front deck  most of the winter.  We also picked out a location, which wasn’t hard.  Our lot is heavily slopped.  We literally live on the side of a pretty steep mountain.  We aren’t sure why, but for some reason up behind our house is a “cut” in the hill that is about the only large flat area of land we have.

Vegetable garden site

From the picture above, it’s difficult to appreciate how steep the hill really his, but to give you some perspective, our home is about 15 feet behind where I am standing but I am above the roof.  Literally right behind where I am standing in this picture is a very steep drop with a path leading down to our back deck.  Here’s a shot to show you what I mean:

img_0491_small

Nothing like a vegetable garden with a view huh?

All of the grass, sticks and natural debris we cleaned up prior to and during tilling went into a pile towards the woods.  This was the start for our compost pile so we can avoid having to purchase the compost from Lowe’s in the future.  Right now, we have a compost pile, but I’m building a nice two bin compost container.  More on that later.

Tilling the vegetable garden

About a month ago, we borrowed my father in-laws rear tine tiller and spent most of a Saturday tilling.  Yes, it took us all day.  We started off using our cultivating tiller (highly recommended) and quickly realized it just wasn’t going cut it for the initial till.  Ever tried tilling fresh ground in the mountains?  Here’s how it goes: till, till, rock, till, till, rock.  Lather, rinse, repeat.

Unfortunately we found two rather large rocks that I still haven’t figured out how to remove.  If you look close in the picture above, one of them is the white/gray area just above the rake.  My son jokingly suggested dynamite.  After trying a number of different options, I’m beginning to think he might have been right!

As you can see from the picture, we did finally finish tilling.  The following weekend, we headed to the local Lowe’s and purchased about 10 bags of mushroom and black cow compost to enrich the soil. We spread it out and used our cultivating tiller to mix it in real good.  We intended to plant that weekend as well, but it started raining.

Planting the vegetable garden

We were able to finally plant 2 weekends ago.  We raked up dirt into small mounds in rows down the length of the garden.  We then found a few sticks about 1-2″ in diameter and poked holes about 1 foot apart in the mounds.  Per the instructions on the seed packs, we placed seeds into the holes and covered them.  We used small sticks and the seed bags to mark our plants so we can tell what is where until they begin to grow.

For the seedlings my wife grew over the winter, we followed the same procedure, just using a small hand shovel instead of a stick.  These were primarily tomatoes, but a few others as well.  Growing the seedlings was an experiment that turned out pretty well.  We plan to grow far more seedlings next year.  Given the late frosts and freezes we have here in the mountains, using the seedlings is a great way to get ahead of the game without risking losing plants.

Waiting and more work

So now we wait.  I am not a patient person, as I am sure my wife will attest too.  I go up and check each night to see if anything has broken through the soil.  So far, nothing yet!  In the mean time, I am working on a few related projects.  We’re planning out how to best tie up the vines and tomatoes.  I’m also really getting into composting.  We currently have a compost pile, but I’m building a 2 bin compost bin to put up there.  I’ll write up a whole article on this project along with another on composting very soon.  Composting is a great way to not only save money, but reduce your waste as well.

Do you have a home vegetable garden?  How big is yours?  How long have you been vegetable gardening?  Share your story and thoughts on vegetable gardening by adding a comment!

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What should I do with my house?

by Stew | Posted in Ask the Readers, Misc | 33 Comments

house-cropped

Okay, I am going to lay it all out and see what you think.

We own a home in another state. I am gainfully employed and making a decent wage – at least for us – in our new location. We are coming up on fourteen months since our move and we have had little or no interest in our home. When we last refinanced, our home was 90% mortgaged. We used most of the money from our second mortgage to improve the home just before the subprime mortgage crisis hit.

Our house has plummeted in value over the last year and a half. The mortgage is now worth 120% of the value of the home. A drop in value would not be so bad if we were living in the house, but the problem is that we now live in a different state.

We have stayed current on our mortgage, home equity loan, insurance, utilities and property taxes by rustling up extra income as best we could. We had a renter in the house for a short time, but the rent did not cover our expenses. Our monthly obligations for this house are between $1,000 and $1,200 per month, depending on utilities.

Our credit score is currently very good – in the top 10% of all credit scores, but this month we officially go into the red. We have a little bit of wiggle room since I recently took out $14,000 by virtue of a 0% APR balance transfer through March of 2010. We have exhausted our savings (other than the balance transfer money) and have cashed out most of our retirement savings.

Here are my options as I see them:

Short sale

This means we lower the price as far as possible to get it to sell. I think this means that our second mortgage probably does not get paid and our first mortgage holder gets what they gets. In a short sale, the balance of the loan counts as household income on my tax return next year. So if my loan amount is $150,000 and I sell it for $90,000, I have to report the difference of $60,000 as income to the IRS next year. Lovely.

It is unclear to me how this strategy affects my credit.

Foreclosure

Just quit making payments. I have seen some calculators where a foreclosure only dings my credit score by 100 points – which is not too bad since my rating is very high. It seems to me that there must be more to this penalty.

Bankruptcy

Thankfully, this is not strong a possibility at the moment, unless I lose my job. We could be living relatively comfortably on my income if we did not have this house. In fact, we probably could have put $8,000 to $10,000 in the bank this last year . . . instead we have stayed current on our payments and have nothing to show for it.

Deed in lieu

With this strategy, I strike a deal with the second mortgage company where I agree to pay them or they forgive the loan or let me pay it off at a reduced rate. As a result of our agreement, they release their lien on the home. I then simply give the house to the first mortgage holder and beg them not to foreclose. I have friends who made this work and it did not affect their credit, however,for most of them, they executed this strategy before this current crisis.

Status quo

Stick it out, keep making payments and hope it sells sometime in the next year. The problem is that I would be very unlikely to recoup my investment, unless home values shot up 30% in the next year. The payments I am making are not going into equity and in the meantime I am making no retirement contributions and we have no savings or emergency fund.

So you can see, we are in a pickle.

I am not desperate or worried – I am confident that God has a plan. Even in bankruptcy, He will meet our needs. However, that fact does not excuse ignorance or laziness on my behalf. I am researching every possible option in order to make the best decision for my family and our future.

Most GLBL readers are smart people – any thoughts or suggestions?

Photo by dingbat2005

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Help Your Local Church

by glblguy | Posted in Guest Posts, Misc | 7 Comments

camp

This is a guest post from the blogger behind Studenomics a personal finance blog that offers common sense advice for college students and recent graduates. Studenomics is the ultimate resource for young people looking for advice on how to survive this current recession, grow their careers, manage their finances, and still be able to enjoy the weekends.

How many times in the last 8 months have you used the excuse, “I would attend church today if I didn’t have so much homework.” Well guess what? You can longer use this excuse for not attending church since college is out for the summer. I’m realistic and I know many college students won’t read the Bible daily or attend church services regularly, but there are many ways you could help your local church.

  • Volunteer at your church. If you find that you can’t sit through a one hour service then you could try providing your services to the church for free. There is so much going on at every church that any help is greatly appreciated. I have helped out in the past by serving food and offering my time to do some yard maintenance work (what can I say I enjoy cutting grass). The point here is that an hour may be nothing to you but it would be really beneficial to your church.
  • Work as a church camp counselor. Not only is this an excellent opportunity to meet some great people but you also have the privilege of giving back to your community. We were all little kids at one point and I’m sure we were sent to some of the free camps offered by our local churches. This is your chance to return the favor and do some good for your community.  Even if you help out once a week it will make at least a small difference in someone’s life.
  • Pilgrimage. Yes they actually exist in real life. In fact my cousin goes on a pilgrimage every summer. I have always personally wanted to try this but it is impossible for me to get the time off from work that time of year. It’s approximately 2 weeks in duration and they walk about 6 hours a day for those 2 weeks until they arrive at their destination.

We all want to have a productive summer but we just don’t know where to start.  Here’s a little secret: you can start by reading The Summer of George- The Most Productive Summer a College Student Will Ever Have:

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Are you an ATM parent? Am I an ATM parent?

by Stew | Posted in Kids and Money | 14 Comments

atm-cropped

I remember the first time I saw my father use an ATM or automated teller machine. I can still remember the name of the bank my parents used and picture the whole ATM setup in my mind – right down to the now-ancient looking digital numbers on the screen. I was quite inquisitive about how a machine could spit out cash. I mean, how much cash must have been in that metal and plastic box? Or did it print the money on the spot? Was there a tube leading from the bank vault that kept the ATM loaded with cash? Why was there a $200 withdrawal limit? Why were ATM bills so crisp? What if I watched closely and figured out my dad’s pin number?

I remember, though, that my father was careful to explain to me that this was not just money from a machine, but real money that came out of his bank account. No one had really ever heard of a credit card at this time, so the ATM was a pretty big deal in the cash or check society of that day. The other vivid memory that I have from this time period was paying for gas with a $10 bill and developing the skill to make the pump stop exactly on $10.00, so that you would not get a penny in change or have to search through the car for an extra nickel or dime. But I digress. (Boy, I sound old sometimes, don’t I?)

Even though my father used the ATM from time to time, he was most definitely not an ATM parent – at least when I was at home. By the time my younger brothers and sisters were older, my parents were earning a little more money and probably saving more, since I was not there to eat everything in the house. They were probably most generous in regards to my baby sister whose wedding is coming up in a month. She is 13 years my junior and let’s just say that if money was love, my parents loved her more. . . or did they? hmmm . . .

What is an ATM Parent?

From the context, I was pretty sure that I knew what an ATM parent meant, but let me develop and define this term a little bit. I am making assumptions and speaking in generalities, this is not meant to be completely literal in every part. The truth is probably that many of us will identify with some parts of this list more than others.

If the shoe fits, wear it:

ATM parents allow $5’s, $10’s, $20’s and $50’s to flow freely without accountability.

Children of ATM parents often know their Christmas and birthday presents in advance. The prospective toy is always something fantastic and ATM children love to proclaim it loudly at the lunch table or on the bus. There are times when I wonder if the future gift is something that the parent promised to the child in order to get him to behave.

ATM parents want to make everything in life as fair as possible for their children.

ATM children grow up thinking that tanning, facials, designer jeans, summer camp and expensive basketball shoes are not luxuries.

ATM parents are not necessarily rich, but most seem to struggle financially – whether or not they make $30K or $250K annually.

ATM children do have piggy banks, but they are empty.

ATM parents rarely say no, but they often make a counter-offer.

ATM children know that money does not grow on trees, however, it does bloom whenever they tug on a parent’s sleeve.

ATM parents feed the instant gratification habit rather than delayed gratification.

ATM children believe that saving up for something means telling their parents what they want a month in advance.

Does your child know that if ATM father says no, that ATM mother might be willing to contribute?

ATM children carry credit cards for which they never see the statement.

ATM parents assume that the automated teller machine should also pay for college and then room and board after college.

Can you add to the list? Am I raising children who have ATM tendencies? I hope not. Are you raising ATM children or – gasp!- Credit Card kids?!

By the way – there is absolutely nothing wrong with an ATM grandparent.

Photo by: frankh

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