Viewpoint Question????

[trying to be frugal]

We are renters that went through a foreclosure about 15 months ago. Afterward we moved to an apartment. We are half way through our second lease with them. Our lease is up in Feb 11'. Here is my question. We had a friend call last night and ask if we wanted to rent his house. His renters just left and if we want it we would have to jump on it now.

Here is the dilema for us.... We would be breaking our lease. It would cost us about 2200.00 in penalty. On the surface it seems like a no brainer duh.... No! But listen to some of the things surrounding it.

1. We pay 1425.00 a month for this apartment----the house would be 1100.00 a month

2. We have to move in Feb when are lease is up anyway because we have a baby coming in Jan and we do not have room here and it is on the third floor.

3. When we move in Feb when lease is up we will have to pay a deposit anywhere we go and a substantial one because of our credit. One place we are looking at that is a town home big enough for all of us requires a 2600.00 deposit and is 1645.oo a month.

4. Rents are very high here and 1100.00 in the long run is a great deal for us. They just want to cover there payment. We would potentially be paying more in Feb for a deposit than the fee for breaking our lease now.

One note... we would not have to string out the breaking our lease fee. We could pay them with major scrimping within 30 days of leaving.

What do you all think when you look at these scenarios? The other tight option of course is to stay where we are even after the baby. It would be very trying in a small space in the long Minnesota Winters with a 16, 13, 8 year old and newborn. We could do it though. The rent difference would be 325.00 more a month for an apartment than this house.

Do we take this opportunity before it is gone?

Thanks in advance for all your great brains.

[Russ]

my thought is this: Friends don't go into business with friends.

But if you must, get everything in writing and both parties need thier expectations known, UP FRONT!!

[Greebo]

If you break the lease and have to pay $2,200 (and you should really try to negotiate on this), you'll make up the difference in 7 months. That's an excellent break-even time period.

So like Russ said - make sure you have a solid business agreement in place - no handshake deals "because they're friends" - and do the deal.

[trying to be frugal]

my thought is this: Friends don't go into business with friends.

But if you must, get everything in writing and both parties need thier expectations known, UP FRONT!!

That was my quick way of explaining it. Here is the full scoop. Our friend has a neighbor across the street who had move quickly to Texas. He asked our friend to keep an eye on his property, he is not moving back. The renters were terrible and got kicked out. This man asked our friend if he knows anyone that would want to rent his house. He said he would go off of his recommendation since he is long distance and his last renters turned out to be terrible.

[jas]

So your friend would not be your landlord right? The friends across the street neighbor is? Like Russ and Greebo said get it all in writing and do the deal. There is no deposit on this house rental right?

[trying to be frugal]

So your friend would not be your landlord right? The friends across the street neighbor is? Like Russ and Greebo said get it all in writing and do the deal. There is no deposit on this house rental right?

Correct on all counts. Friend would be neighbor and no deposit

[trying to be frugal]

Okay scenario changed a wee bit. I went into the rental office and talked to the manager. It is a two month penalty $2859 instead of 2200 like I thought. How much does that change things in your minds with the same above scenario and options?

[trying to be frugal]

One more thing... I just did the budget through November with all three scenarios and I could pay the penalty in full by Oct 19th. so that would be exactly 34 days after moving. Also we would give them 30 days notice Aug 17th through Sept 15th (30 days) I would pay partial rent on Sept 1st and partial on the new place Sept 15th.

[Greebo]

Okay scenario changed a wee bit. I went into the rental office and talked to the manager. It is a two month penalty $2859 instead of 2200 like I thought. How much does that change things in your minds with the same above scenario and options?

2859/325=8.8 months - or 9 months to recover your losses.

How long do you anticipate that you'll live in the other place?

[trying to be frugal]

2859/325=8.8 months - or 9 months to recover your losses.

How long do you anticipate that you'll live in the other place?

As long as possible. Rent for a couple years at least and we have opportunity to rent to own or just rent.

[Greebo]

As long as possible. Rent for a couple years at least and we have opportunity to rent to own or just rent.

So you'll make up the cost and then some in less than a year, and then it'll be all in the black. If you were looking at not breaking even for more than a year, I'd say reconsider, but less than a year? Definitely still a bargain in the long run.

But when you start thinking rent-to-own, come back and we'll talk. Generally those are beneficial for the landlord/owners, not the tenant/would-be-buyers.

[McD]

Question for all doing the math--are you factoring in things like utility bills, lawn mowing, general maintenace, etc?

[trying to be frugal]

Question for all doing the math--are you factoring in things like utility bills, lawn mowing, general maintenace, etc?

Thank you for asking.

I did factor all that in the budget. It is no problem to pay those things. I am not really comparing it in the difference between the rent for this apartment and the house offered because wherever we move we will have to now pay utilities whether now or at the end of the lease. The difference would be the opportunity now would not have a deposit and the rent is less than the rental market value of everything else we have been looking at for a move in Feb. The only way utilities would truly factor in as an added is if we wre going to stay in this apartment after the baby is born because we only pay electric here.

Does my thinking make sense?

[frugalfranny]

Okay scenario changed a wee bit. I went into the rental office and talked to the manager. It is a two month penalty $2859 instead of 2200 like I thought. How much does that change things in your minds with the same above scenario and options?

What is the possibility of negotiating this along the line of "if they get it rented sooner" type thing?

what is your rental market like? could they get it rented within a month? Always worth a try...............all they can say is no.

But........I would move...........with a written agreement.

[NewLeaf]

It sounds pretty good. I can see that you need more space with the kids. A yard would be a plus too. Good luck.