We just got word a few days ago that the closing date for our house in Minnesota will be July 29th (plus or minus a few days, depending on paperwork stuff). This should be very exciting for our friends who own property in Minnesota, because it means real estate values should shoot through the roof within the next six months or so. We don’t expect another massive real estate downturn with plummeting property values until after we’ve purchased some wildly expensive piece of property here in Washington, so everyone enjoy the gains during this exciting window of opportunity. 😉
One especially nice thing about the closing is that we are selling the house to our renters, who have been wonderful. They have family in the neighborhood, and really love the house. They were renting because the recession hit them pretty hard, so it’s a real treat to be able to sell the house to a family who will enjoy it as much as we did.
Another nice thing is that selling the house in Minnesota will put us in a better position to purchase property here in Washington. When you own rental property, the mortgage companies only count 75% of what you receive in rental income as “income” – they figure you’ll spend the rest paying for repairs and whatnot. That poses a challenge if your renters are already paying $100 less than you owe on your mortgage payments each month, because it looks to the mortgage company like you’re insolvent when really you just made the mistake of buying your house in 2006 and are currently making enough money to cover basic expenses without a ton of extras. Once we sell the house, the mortgage company will no longer count us as owing both mortgage and rental payments, and our debt/income ratio will more accurately reflect reality.
Overall, it will be a big weight off our shoulders. We enjoyed living in that house, and look forward to living in a house here one of these days. Hooray for removing roadblocks.