Should I sell to free up some cash??

[Lulu]

Arrghh!

So I own this place (the bank does but yanno), have 3 kids on my own.
F/T work doesn't add up when you factor in childcare costs, btdt.
I NEED an income.

Now all my credit is tied up in this house. Even though the place need a full reno, I do love it. Big, great back/front yards, bungalow, massive garage, 500m from school and kinder, established area yadda yadda.

I want to go back into business, I have so many options for what I can do, but it all comes down to startup $$$.

I'm painfully thinking about selling up, I'd probably get a nice chunk of cash in the bank to start/takeover a business which would therefore give me an income and in the long term I could buy another place.
I'm petrified of leaving really - I HATE moving with a passion and swore I'd never do it again after I bought this place. Renting shiats me to tears, and that's if I could even get a place to rent. I could do with a proper kitchen with an oven though

Otherwise I'll have to stick it out for at least another 18 months till DD is in school and I'm not sure if I can go without an income for that long. It's getting too hard, DD might need surgery, DS does need surgery...I have been deprived of shiny things for waaaaay too long now......something has to give.

I've already had to shelve plan for my business, and it's come to a head in my mind because I recently saw a business for sale that I have coveted for 10 years and I couldn't do anything but watch someone else grab it

This house is my security...but its holding me back at the same time. $$$ aren't going to drop out of the sky - grraaaghhhhhh!

Don't know if I want advice or just to vent....

[Astrid]

The main thing that would concern me is how difficult it would be to buy again once you do have an income again. It can be quite hard getting a loan when you have a business, normally you need to go low-doc and they cost more with less leway when it comes to missed payments.

Renting has the plus side of rent assistance, so that would give you more money coming in, but is the difference between your mortgage and rent?

I would suggest renting out your place and you going into somewhere cheaper, but you probably can't rent out a place without a stove.

Arggh - this is a tough one.

[Madham]

Its a tough one..
I think you will make the right decision in the end. I hate that feeling of wanting something so bad and being held back then to watch it snapped up by someone else. I am with you on the moving, i hate it so much, not only moving all the furnishings etc but moving the kids from there home. When i was growing up we moved many times, my parents bought run down business's and built them up then sold usually within 3 years, so we never stayed put for long but thankfully we stayed in the same area.
Personally i would do it, you can make a home for your family anywhere and you will kick yourself if another opportunity arises and you are not in a position to take it.

Good luck with it all.

[Lulu]

Mortgage - rent would probably be about the same. If it got down to it I could borrow $$ to put the stove in. 4 bdrm places are not really easy to find either - oh gawd the LOOKING and applying - YUK.

I prolly couldn't rent it out for the same as repayments ($50 shortfall), but then again my GF totally covets this place even in its present state....

[misty]

Personally I wouldn't sell, not unless you could say with a surety that you actually would be better of financially if you did so. Would you be able to rent another house for significantly cheaper then your current mortgage??? If not then it doesn't make financial sense because your incomings and outgoings would still be the same.

[Arimeh]

I think you'll come to a decision that is right for you mate. You have a good head on your shoulders and you're not going to do anything too risky.

For us, the decision to sell up and rent makes much more sense. I can stay home with my babies (cos yes, the childcare costs are sky high, even with 2 in care, let alone 3!!!) plus we would get rent assistance, more income from centrelink etc.

So we are willing to give up our house NOW - because really - its not perfect, its too bloody small, too bloody old and run down and will need a LOT of work. Although it is on a perfect block of land

Anyhoo - we have made the decision to sell up now - and then buy again when the kids are at school and we can have two full time incomes paying off the mortgage. Its just too hard with one and a half incomes ya know? Sacrifices are being made here.... and they aren't always the good ones

[misty]

Also if you are looking at the 'rent it out' path, this is likely to end up costing you more. It is not simply a matter of renting it out at a rate to cover the mortgage - there are other expenses to consider:

Mortgage
landlord insurance
property management fees
general maintainence (you have to keep the place at what may be a higher standard then you might while you live there)
tax on any rental income
etc

[Lulu]

Misty, its not about the ingoings/outgoings, it's more about being able to access an income.
ETA - I also would rent privately if I did - I'm aware of the fees invovled.

Mel, I wish I had another income to count on, it would make it easier! It's more a long term thing, and I'm worried about getting out of the market - last time I did it cost $100k - then again I don't think property is ever going to go that spastic again...

*sigh

[rufalina]

What is your equity like? Can you take out an equity loan (are the banks still doing these in this market) and use that money to start up the business. You might need to look at a second tier lender for this, and you would need a good business plan, which I know you have, but it would allow you to keep the place and the money from the business can pay the loan and get you going?

[Pandora]

yep I was going to suggest the same as rufalina, or borrowing more against your house, given you are in a good area that will go up in value.

[Phteven]

Can you use your equity to get some more credit from the bank to start your business?
Would you want to do that?
I don't think it's a god time to sell right now, you might have a hard time getting a good price for your home.

ETA *snap* rufalina

[Lulu]

Not without a current income chicks.....can't access the equity.

It's funny, I've had the house valued recently and according to the sales around here, I'd still do well (location etc), cos i got it for a b a r g a i n...

fark it all...

[maz]

could you rent out the bungalow????

I think you would be made to sell hon. Its security and its something dame hard to get when your a single woman with 3 kids. Landlords are weird arses...I have a gf here sleeping on a couch at another gf's cause she has been trying for 5 months to get rental accomadation for her and her 2 kids after her hubby and her split

I still see that american guy around you....something is coming soon....gypsy van and the number 36

[rufalina]

Stoopid financial market... 6 months ago you would have easily gotten an equity loan with a business plan and concept from the second tier brokers... Not the best deals, but it was a loan...

Can you get a business loan for starting up the business with the house as security????

[Epacris]

Not without a current income chicks.....can't access the equity.

Oh, that is a catch-22 then

Lulu, you are between a rock and a hard place...

I can't think of anything else to say, I can't even think of another cliche...

Such a tough situation. Personally, me, if I were you, not knowing you, or your full circumstances, I'd keep the house

Big hugs

[Bathsheba]

matey we've touched on this before and like I said, I'm usually a huge advocate for renting when kids are little however my gut feeling is that you should stay put. I'll get my DH to have a read of your intro post and see if he can come up with any creative ideas. Maybe you should consider renting out your bungalow like Maz suggested.

Anyhow... I'll post again after DH has had a muse.

Afterthought: Hmmm, you could be sneaky and get yourself a F/T job until you get an equity loan. When we bought our first place I was working two jobs and we just scraped through the approval process. A few weeks after we moved in I quit one of the jobs (the weekend one). The bank didn't need to know. You might only need to work for a few months.

[Lulu]

Hmm, devil and the deep blue sea? There's another cliche!

I spose at the end of the day that opportunity has been missed so I may be well get over it. (and secretly plan to run the new owners out of business *evil grin)

I'm not used to being stuck this waaayyyyyy *whine rant.

Oh Bath - you would slap me if you were here - when I was talking to my bank I let it slip that I didn't have my own business anymore but wanted to start a new one...if I hadn't said that I'd probably be on my way right now DOH DOH DOH!!!!

ExH and I were always going to invest in something even after we split up, but he couldn't wait for me to stop having babies and now has his own thang going on...

STUPID GFC, before then I had people who would have financed me, but they have had the crap kicked out of them and now the cupboard is bare.

Whine, rant, snotty attitude for the rest of the day.....