Creative Mortgage Budgeting

[TurboPants]

Greetings magnificent people.
I searched the forum a bit for mortgage related topics but didn't find much related to this specifically. I have a $570 mortgage and am not making enough to save $6/mo worth of rent and utilities for the house to sit empty while I take a hike. The only thing I can think of is use HomeAway or AirBnB to rent it out while I'm gone. It's a pretty nice 2 bedroom house in a central location so I expect bare minimum I could rent it for 1 weekend a month. I'll also have to quit my job so that's a little scary! If anyone has suggestions or has read about other ideas I'm open to anything at this point. I just don't want to give up on my dream because of a mortgage. Thanks in advance.

[Slo-go'en]

Sell the house or give up your dream.

Renting can be nightmare if your not around to monitor the tenants. They can do a lot of damage in a short period of time and you have little recourse. They could also stop paying the rent after a month and trying to evict them is a real pain and expensive. You'd have to hire a rental management compony to oversee the deal or you could get screwed.

Weekend rentals are worse, someone would have to go in and clean up after every weekend and you'd have to have an agency to handle to bookings and other details. Then what do you do with all the personal stuff you have that you don't want them rummaging threw or stealing? You'd have to move it all into storage for an added expense.

And the real kicker is what happens if after a couple of weeks or a month something happens and your off the trail? You rented the house for 6 months and now you have to find a place to live in the mean time. Since 80% of those who start a thru hike don't make it, that's a real possibility.

[MuddyWaters]

Theres a number of potential pitfalls.
Yeaaah, people do it all time
But you expose yourself to liabilities


In many states there are codes governing rental properties.
Where I live, for example , you must have commercial insurance, and metal entry doors.

Should something go wrong....you could be sued. That 6 mo mortgage would be aa drop in the bucket.

If you cant sve $4000, how did you save money to hike?

[One Half]

if you are near hospitals you may see about renting to travel nurses. but yeah, you should have someone around to "manage" things. Travel nurses usually take assignments for 3 months at a time and expect "all expenses" included - so water, electric, gas and wifi. If you are on facebook check out some travel nurse housing groups to get an idea of what is expected. then see if you can either hook up with an agency that places TN or start advertising it yourself.

[Analog_Kidd]

Yeah, I wouldn't tent it out. Air bnb rentals require you to meet the tenant to provide instructions, give keys, etc. And you have to clean it every time. You can hire someone to do all that, maybe even a property mgt company would do it. If you are dead set on doing it contact one and see. of course you still don't have a guarantee of even renting it out.

You didn't say when you are going, but I'll assume 2020, since you have no money now. If this is your dream, make it haopen. You have a year to work like a fiend. Take three jobs and save every penny. Save enough to pay ahead your mortgage. You can easily make an extra 500 a month for a year and that would be enough to fund the trip and the mortgage.

You can also sell some stuff if you got anything. When it gets closer sell the car.

Get on a budget and see where you can cut corners. Stop eating out, ditch cable. You can always find ways to save.

[fastfoxengineering]

I would only recommend renting it out to a trusted friend or relative. Even then there are inherent risks. But if you really trust that person, just charge them enough to cover the mortage and bills while your gone

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[4eyedbuzzard]

You say you can't save enough money to pay the mortgage while you are off hiking for 6 months. What's that, 6 x 570 = $3420. But you've saved at least that much for hiking expenses, haven't you?
How did you save up the money to pay for hiking? Do the same thing to save up to pay the mortgage, and all the other life expenses that don't stop just because people go on vacations.

Or, just sell the house or rent it out through a local Realtor if you don't have the patience to wait and save. Typically Realtors can rent it, do background checks on tenants, manage the money and maintenance, etc for a percentage. Beware the quit job, spent savings on hiking gear, then quit the trail at Neel Gap scenario. It happens.

[TurboPants]

To fill in some blanks, the house on the same road as my parents who are getting older and to the point they'll need my help (only child, yay). This is why I rehabbed/gutted this house from nothing the last couple years so I could be close to help them. So I can't and won't just sell it. In terms of cash, I have a good start on savings right now ($5k) so the hike itself isn't a as big a problem as the mortgage. I just don't make much more than what my bills are right now and I'm already super cheap (no lights on, low thermostat, eat in 95% of the time etc). The points brought up have definitely scared me on potential rental nightmares, especially if I got hurt and needed to come home early.

All great points. This is why I asked, because I know many have been down this thought process.

[Slo-go'en]

Move your parents into your house and sell theirs or sell yours and move into theirs.

[IslandPete]

Move your parents into your house and sell theirs or sell yours and move into theirs.
^^^ This. Or save some more money so you can afford the hike...

[FreeGoldRush]

Rental property requires far more than accepting a rent check from someone. It’s a job and a business. This is not something you want to get into while hiking. And don’t expect to hire a management company to operate your new business idea for you and provide you with a profit. It does not work that way.

The reality is that we must earn our dreams, even if it’s just hiking.

[Slo-go'en]

The other problem is most renters would want at least a year lease. Six months is a bit short unless your house is on a lake and is a good summer vacation rental.

It seems a lot of people who have this "dream" of hiking the AT got the idea from watching YouTube videos and have never actually stepped into the woods before. If your one of those, make sure you do at least a 2 week backpacking trip somewhere to find out if it really is something you want to do for months and months. If your already a seasoned backpacker, never mind.

[Analog_Kidd]

Perhaps take on a roommate. They can pay you, and will have the place to themselves till you return. However it would be a dick move to kick them out once you return, especially if you get back early. So make sure it's someone you like.

[fiddlehead]

I was in the same boat back in the 90's when I did 3 thru-hikes (triple crown).
What I did was find room-mates.
Usually friends, but once, I put an ad in the paper and got a retired man who I am still friends with to this day.
It worked or me.
My savings went towards my hike, and their rent payments paid my mortgage.
I paid the balance off after the 3rd thru, and my hiking life got much easier to support.

[Slow Trek]

If your mortgage is with a local bank,ask if they will defer payments for 6 months. This will not be free,it will cost extra interest. If your mortgage is in the secondary or online market,don't bother asking. But if you have a great track record with a local bank,you might be surprised what they can do.

[perrymk]

I paid the balance off after the 3rd thru, and my hiking life got much easier to support.

I realize this is a bit of a thread drift but still partially applicable. My house is paid and I will retire with adequate funds to hike pretty much as I please, but I am not keen on giving up my house. What do you do now with your house when you hike/travel for more than a couple of weeks? Do you have a friend house sit? Have you used a house sit service?

I like the traveling nurse idea, I hadn't thought of that. I've thought about renting and pretty much dismissed the idea. I prefer not to live with roommates long term but might handle a week or so overlap if I'm off trail for a few days. My other thought is to find an older graduate student (not too far from two universities) and offer a free place (electric, wifi included) in exchange for mowing the lawn and sending me mail drops.

I'm still very open to ideas.

[rickb]

If your mortgage is with a local bank,ask if they will defer payments for 6 months. This will not be free,it will cost extra interest. If your mortgage is in the secondary or online market,don't bother asking. But if you have a great track record with a local bank,you might be surprised what they can do.


That is a creative idea!

Or you could take out a home equity loan.

$3500 over 5 years would almost certainly be under $100 per month.

Would that be a wise financial decision? Probably not for most people, but then again neither is quitting one’s job to take a hike.

That said, we don’t t know you — it could be a wise life decision

[fiddlehead]

I realize this is a bit of a thread drift but still partially applicable. My house is paid and I will retire with adequate funds to hike pretty much as I please, but I am not keen on giving up my house. What do you do now with your house when you hike/travel for more than a couple of weeks? Do you have a friend house sit? Have you used a house sit service?

I like the traveling nurse idea, I hadn't thought of that. I've thought about renting and pretty much dismissed the idea. I prefer not to live with roommates long term but might handle a week or so overlap if I'm off trail for a few days. My other thought is to find an older graduate student (not too far from two universities) and offer a free place (electric, wifi included) in exchange for mowing the lawn and sending me mail drops.

I'm still very open to ideas.


You ask what I now do when I travel or hike now that it's paid off.
I rent it out.
I ended up building an apt. for myself above the garage but now, rented that out too.
So, last year when I came back, I slept in a warehouse (no heat or water) on my property.
It works for me.
I got used to hiking so much that I'm comfortable anywhere and living in my house, alone would be such a luxury anymore, I don't even consider it.
I am in Thailand about 7 months a year now, and hiking somewhere in Europe or Asia for 2, then the rest back in PA.
I think life gets to a point where you figure out what your biggest priorities are and then make it work.
For me, hiking and traveling is more important than a big house with lots of stuff inside.
It's not only hiking that has me downsizing, living in Asia with smaller houses and lack of storage makes one feel more comfortable with less too.
A house is just a place to keep my guitars anyway.

[beefsmack]

I'd either move in with parents and rent it out or take on a roommate for the next year. A roommate makes the most sense to me because they could look after things while you are gone. I can't speak to weekend rentals such as AirB&B, but I have multiple rental properties and rarely have problems because my tenant screening process is so good. It is definitely a business though and not passive income! Bigger Pockets podcast and books by the same company are an excellent resource for getting into the rental business. Instead of deferring payment...find something to earn money from 5-9 and beef up that savings to where you can pre-pay your mortgage while gone hiking. No fees plus you will save a smidge on the interest!

[orthofingers]

Well, so far you've got a lot of reasons why you shouldn't rent it. They are all valid and many point out the potential pitfalls of renting while you're taking a long walk in the woods. But, that's not what you asked.

My wife is a realtor and someone is always looking for a short term (3-6 month) rental while their new house is getting finished or they sold their own house to a cash buyer and it closed much sooner than expected. Or call any large corporations in your area and see if they have people coming in for work for a short period of time. A good friend has a small rental house which he rented to the US Coast Guard. They put their own people in it who were here on temporary duty. They had very high standards and most of the time, there was no one in it but he still got a check every month from the Coast Guard.

You still need someone who can take the call for when the dishwasher breaks or a window sticks but, if you can get everything working properly before you depart, it could work for you. Keep us posted on how this works out for you.

[LittleRock]

If I didn't even have $4k saved, I wouldn't be thinking about quitting my job to go hiking.

Especially not with the potential for having to end early because of a family emergency.

Just my $0.02.

[trailmercury]

If I didn't even have $4k saved, I wouldn't be thinking about quitting my job to go hiking.

Especially not with the potential for having to end early because of a family emergency.

Just my $0.02.
post deleted, I misquoted the OP

[stephanD]

You own a house, you have a job, you are young and healthy. Be happy. Do sections. The trail is not going anywhere.

[Slumgum]

The "landlord" experience can be a joy or a nightmare. If you have to take a tenant to court just know that you will be portrayed as "the slum lord" and considered guilty until proven innocent. The tenant holds all the cards no matter that they have torn the place up and paid no rent for the last 4 months. It is all about thorough history checks and a large damage deposit. Make sure you get someone in your property who is reputable be it short or long term.

[Hikingjim]

It's a gamble, but I wouldn't rule out renting it or using airbnb.
For rental, you'd have to be confident in the tenant. Eg: if it's a professional that needs a short-term rental and they have fantastic references, etc, then maybe the risk is worth it.
For airbnb, it's all about having a local person manage it that you fully trust. If you don't, you can't do it.

I don't know about insurances/regulation where you live, but I rented out a townhouse we owned, and insurance was actually a lot higher when my place was vacant than when I had tenants in it. That might be party because it's a colder climate here though (risk of pipes freezing, etc, with vacant property)

[One Half]

Add to that, how does someone who "owns rental properties" not have tens of thousands banked in case the rentals unexpectedly need major repairs.


Might just sell the rentals to fund the hike?He never said he "owns rental houses." He actually appears to only own his current home and just earns enough "to get by" but has managed to save up $5k towards a hike.

As for having "10s of thousands" socked away IF he had rentals, for issues that could come up with the rentals, it would be stupid business practice to use any of that for a hike or other personal expenses unless an exteme disaster happened.

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[trailmercury]

He never said he "owns rental houses." He actually appears to only own his current home and just earns enough "to get by" but has managed to save up $5k towards a hike.

As for having "10s of thousands" socked away IF he had rentals, for issues that could come up with the rentals, it would be stupid business practice to use any of that for a hike or other personal expenses unless an exteme disaster happened.

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I went ahead and deleted the post, since I was mistaken that the OP had rental properties. ( it was a subsequent poster. beefsmack), my bad!

[Berserker]

In terms of cash, I have a good start on savings right now ($5k) so the hike itself isn't a as big a problem as the mortgage.
This is really just semantics, but I would argue that the hike itself is a big problem. When I budget for something I include every expense that needs to be covered. So in your case if you don't have a way to cover the mortgage (i.e. renter or some other arrangement), then this is part of your hike budget. So you'd need $5k + 6 months of mortgage + 6 months of utilities.

I'm not saying this to be a smart arse, I'm just pointing out that it's human nature to talk oneself into things and not be realistic. At any rate, I hope you figure something out and have a good hike. I am a huge supporter of taking advantage of an opportunity when one presents itself, and it surely sounds like this may be the case for you attempting a thru hike.

[4eyedbuzzard]

...My wife is a realtor and someone is always looking for a short term (3-6 month) rental while their new house is getting finished or they sold their own house to a cash buyer and it closed much sooner than expected. Or call any large corporations in your area and see if they have people coming in for work for a short period of time. A good friend has a small rental house which he rented to the US Coast Guard. They put their own people in it who were here on temporary duty. They had very high standards and most of the time, there was no one in it but he still got a check every month from the Coast Guard.

You still need someone who can take the call for when the dishwasher breaks or a window sticks but, if you can get everything working properly before you depart, it could work for you. Keep us posted on how this works out for you.This is likely one of the best options for renting it out. Contact a local Realtor and tell them your situation. They often know responsible people directly or through other Realtors or builders that are in these types of situations needing a short term rental. If you can get a 6 month lease, worse case is your hike ends early and you camp out at your parents until the lease is up.

[evyck da fleet]

This is really just semantics, but I would argue that the hike itself is a big problem. When I budget for something I include every expense that needs to be covered. So in your case if you don't have a way to cover the mortgage (i.e. renter or some other arrangement), then this is part of your hike budget. So you'd need $5k + 6 months of mortgage + 6 months of utilities.

I'm not saying this to be a smart arse, I'm just pointing out that it's human nature to talk oneself into things and not be realistic. At any rate, I hope you figure something out and have a good hike. I am a huge supporter of taking advantage of an opportunity when one presents itself, and it surely sounds like this may be the case for you attempting a thru hike.
To add on, I also budget for how long I think I’ll be out of work when I get back and before I can find a job. The last thing I want to think about when I’m hiking is how I’m going to pay bills.

[One Half]

To add on, I also budget for how long I think I’ll be out of work when I get back and before I can find a job. The last thing I want to think about when I’m hiking is how I’m going to pay bills.

I think lots of people miss this step. It's part of our plan when we eventually hike the long trails unless we wait until retirement.

[stephanD]

In 2015, I quit my job in order to thru hike. I asked for a leave of absence, but i was denied. I was comfortable doing it because I had enough funds to finance (A) rent and bills for at least one full year, (B) pay for health insurance out of pocket for at least one full year, (C) 5-6 months hiking including gear replacement (e.g. I had to buy a new backpack in NY) and finally (D) whatever life may throw at you and it unexpected. In my case it was a knee injury which took me off the trail and kept me practically bed bound for next three months. I quit my job in May 1st(I attempted to flip-flop), the trail in mid July, and by the end December i was working again. So i was out of work a total of about eight months. If the OP plans to quit his job, and does not have enough funds to finance himself and his financial obligations for at least six - seven months, he risks to find himself homeless/jobless. I understand it his his dream, because it was my dream too, but one has to be realistic on how to accomplish their dream without ruining themselves financially. Now i do sections whenever i have the time off.

[lonehiker]

Or you could take out a home equity loan.

$3500 over 5 years would almost certainly be under $100 per month.

Would that be a wise financial decision? Probably not for most people, but then again neither is quitting one’s job to take a hike.

That said, we don’t t know you — it could be a wise life decision

Don't finance your hike. This is really bad advice.

In regards to renting; you can hire a company to handle that for you. Where I live they charge 10% of the rental rate but handle everything for you.

Best option for you might be to delay your trip a year or two and save the money. You managed to save 5K, just keep plugging away at it.

[trailmercury]

Don't finance your hike. This is really bad advice.

yes, very bad advice...the trail isn't going anywhere, save longer to cover every expense of the house sitting empty.

[PatmanTN]

FWIW, there are also property management groups that will handle as much of the rental process as you are willing to pay them to. I have a co-worker that used such a company and I think he said the company he used required first months rent and then 10% of the rent each month. They found and vetted tenants, managed the eviction process when needed, handled payment transactions etc.. He also mentioned that he could have prearranged repairs with them that would have been withheld from future rent payments but discovered he could coordinate repairs less expensively than them.

[illabelle]

We have some rental property. There certainly are risks, but they're not unmanageable. I like the traveling nurse idea, and the idea of getting a realtor to handle things for you.
The roommate idea is great IF you have the right person. He/she has to be someone you trust a lot.
My husband and I section hike, which works for us. Overall, section hiking is more expensive, even if it's spread out over several years. But it does allow us to keep our jobs.
Something I didn't see addressed above is what your plan is for your parents while you're on the trail. Maybe they don't need you just yet?

[pesphoto]

do what I'm about to do...sell it, its just a roof with walls and a door.

[rickb]

yes, very bad advice...the trail isn't going anywhere, save longer to cover every expense of the house sitting empty.

Every person’s situation is different.

Time is the most precious asset.

Leaving a good career track, financing a car (never did never will) and failing to sieze the moment may be far more of a risk for some individuals.

Why is it that many of the same people who would not take issue with a young person taking out a 60 month (or longer) car loan, or taking on private college debt for a generic college experience, would not ever consider financing a thru hike?

One thing about hiking and travel experiences — once you have them nobody can take them away.

[Berserker]

Every person’s situation is different.

Time is the most precious asset.

Leaving a good career track, financing a car (never did never will) and failing to sieze the moment may be far more of a risk for some individuals.

Why is it that many of the same people who would not take issue with a young person taking out a 60 month (or longer) car loan, or taking on private college debt for a generic college experience, would not ever consider financing a thru hike?

One thing about hiking and travel experiences — once you have them nobody can take them away.
This is wise counsel rickb. As I have gotten older I have come to realize just how precious time really is, and you are right that you cannot put a price on one's time and/or good health. So I don't recommend one be reckless and go into massive debt to hike, but if one were to do things responsibly and have a good plan for afterwards then I agree that financing some of it would not be a crazy idea. As a section hiker I also don't disagree with the "trail ain't going anywhere" advice, and to thinking outside the box and maybe consider sectioning rather than a thru.

[trailmercury]

Why is it that many of the same people who would not take issue with a young person taking out a 60 month (or longer) car loan, or taking on private college debt for a generic college experience, would not ever consider financing a thru hike

Different strokes for different folks,
but you are advocating taking a loan to go on vacation, like it is equal or "no worse" than borrowing money to get a college degree?

Yikes!

[stephanD]

My 2 cents advise # 1: There are too many unknown about this OP's situation to give him a solid advise, so my advise to him is to consult with a financial adviser.
My 2 cents advise # 2: You summited Katahdin, and now what? In order to have a job, you need a place to live. In order to have a place to live, you need a job. Nobody is going to hire a homeless person, and nobody is going to rent or sell you a place to live if you don't have a job. So, unless you are a dependent, or you have a fat trust fund waiting for you, or you have some sort of income, one has to think about those things if you don't want to find yourself jobless and homeless at the end of your hike. Nice memories are not going to put food on your table.

[rickb]

Different strokes for different folks,
but you are advocating taking a loan to go on vacation, like it is equal or "no worse" than borrowing money to get a college degree?

Yikes!


This troubles me.

These days it seems like even the smartest of people hear what they are predisposed to hear.

Confirmation bias?

I am in no way advocating taking a loan to go on vacation.

Rather I am advocating that some people might reasonably consider doing so. The distinction is small, but important. Nuance maters.

Peoples’ situations are different.

Some will have professions that virtually guarantee a good job for the rest of their life (plumber, physician) and others are scrambling in the gig economy.

What is universal to all is that we only have so many years on this planet, and so many chances to sieze the day. Creative thinking suggests all options be considered — even if some will be rejected.