Contemplating things further, I think I can finance a bathroom remodel. Especially since the estimate I received is under $6K. Add on 10% for overruns, as most places advise, and it’s still slightly under the $6K mark.
Resources available:
1. The insurance company will pay me for the repairs ~$950.
2. My tax refund is ~$1400.
3. My stimulus payment is $600.
4. Liquidating my savings accounts ~$1300.
5. Cash I can raise from my next two paychecks, $1200.
6. Balance transfer at 1% APR till January 2009, $5000.
So that’s $10,450 in resources, not bad. Of course, I have debts to pay. And to get my apartment ready as a rental, I need to do a few more things to the plaster and the kitchen. The plaster work is only about $1000-1200. However kitchens are expensive and that’s what gives me pause. I’m not sure I should go as far as fixing the kitchen up really nice. Should I stick to something cut rate? Should I only update the kitchen appliances? At the moment, I am leaning towards replacing only the dishwasher.
Right now, in the aftermath of tax season, I think the only way I can take on all this cost is to sink it into my apartment as investment or improvement costs on a rental unit. Make it all a Schedule C line item.
Renting out my condo at market value will end up having negative cash flow for me each month unless I find a really sick cheap room for rent, which is possible in my neighborhood. I looked at a sublet for $575 a month last week. I could net about $300 in my pocket from positive monthly cash flow and put it towards debt repayment. Then I’d also be able to reduce my tax liability from a Schedule C net loss. But all of this makes me exceedingly uncomfortable. I am just not confident I can make it work out in my favor though.
I would have the hassle of finding a stable roommate situation and signing a lease. I’d have to move all my stuff out of my house and find storage for it. Having moved 7 times in 2 years during a transient period of my life, and recently reliving those times while filling out a security clearance form, I really hate the situation I’m in.
Of course, I could stay in the place. But then I’d want to remodel the kitchen, tear out the carpet and really spruce up the place.
At least I’ve freed up some resources and have a plan now.
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{ 5 comments… read them below or add one }
Hi Mapgirl – just an FYI, unless you are starting a rental business – your appartment rental (investment) would go on a Schedule E.
Wouldn’t want you getting into some Self-Employment Taxes from this.
Well, it does sound like you have everything figured out to pay for the bathroom. Is there a reason you NEED to rent out the place and move? Financially, it just doesn’t seem like the best option for you right now.
Maybe you can compromise. Stay there to save the hassle and money, and tell yourself that you will make small repairs AFTER paying off so much debt, and only pay for the repairs/upgrades in cash!
If you decide to rent why spend a ton of money on kitchen stuff? Renters aren’t going to appreciate the nice, new stuff and may even trash it.
My advice (ha!) is fix the bathroom and stay put. If you’re not leaving the area or needing to move closer to work, then it just seems like a transition that you should hold off on for a little while.
As for wanting to fix other stuff if you stay – thats fine, but I’d still wait until the bathroom is done and paid for. Then see where your finances are and if there are any other life changes before taking any more steps.
I’ve found that putting remodeling steps on hold for a few weeks or months really changes my perception about them – most the time I get caught up in the idea of something new and eventually realized there are better places for my to spend my energy and money and that the place really isn’t as bad as it seemed last month. That or something else major breaks and I’m thankful that I have the resources to cover it.
We’re almost done remodeling our downstairs full bath, so I should be able to do some math and figure out what the whole thing actually costs us within a few days. We had no ceiling collapse, of course, but we’re replacing everything but the toilet and only doing the painting ourselves, so should be able to give you an idea of real costs in the area right now.
All i know is having a goal is key! and it looks like you’re on the right track Mapgirl
at least it’s an adventure, right?