I’ve recently been pondering what I could do with my paid off condo in Portland. Here is what I have come up with. The point of this post is to decouple us a little more from mainstream systems. It’s harder these days to think outside of the box despite information on the internet being so accessible.
I could live in it.
Don’t laugh because this likely will be lowest on the list. I mean it’s a 350 sqft studio, some might think it too small for a person or even 2 persons to live in. If I could convince my partner to live in such a small space imagine the flexibility we could enjoy. Suddenly she could cut back drastically on work and enjoy a lot more free time which would mean more free time that I could spend with her.
Use it as a vacation spot.
My plan is to move up to Northern Cali with my GF for a while, try the whole living together thing to become familiar with each other’s quirks. We discussed coming down to Portland for vacation and staying in the condo regularly. The reality is that a vacation home is rarely used. Most often couples, especially new ones, like to travel to new destinations and not necessarily return to the same place repeatedly.
Even if we return to PDX frequently it might make more sense to rent a hotel than keep so much space sitting around unoccupied. Realistically we could come back here every 3 months and perhaps stay a week at a time, that’s 30 days for the year, give or take. It would be cheaper to rent a hotel than to keep this place if it’s only going to serve as a vacation property.
Rent it out.
The rent for this place would be in the $1-1.1k/mo range, unfurnished. I could probably get around $1.5-1.7 furnished though the occupancy time would decrease and likely causing me headache.
Rent here in Portland is going up, thankfully us Californians have driven these damn environment loving, happy and calm Portlandians out and replaced them with passive-aggressive, vain and stressed out West Coasters. So it would likely rent out easily and I doubt it would have much downtime. There are enough medical students in this building that I wouldn’t have a hard time renting this place out to suitable tenants.
Figure I have $350/mo of overhead and another $50/mo or repairs since this place was built-in the 1920’s. That would leave me with $650/mo of profit. Pretty sweet actually. Though it means that for my $142k invested I would have a rate of return of 5.5%.
I’m not too worried about being a landlord. I was a landlord for 2 months when I had bought a previous condo in San Diego and had tenants staying there. I think I’d do fine.
Use it for business.
I have had a couple of business ideas to run out of it. Both would require me to be present most of the time and with me moving to NoCal that wouldn’t work out too well. One idea is to use to store high-end liquor and sell them to collectors or impatient buyer who need it for a special event.
Another idea was to run some sort of consulting business out of here. I realize that there are a lot of web-based meeting platforms but they all suck ass. All of them. The connection generally is inconsistent and I don’t know anything more dehumanizing than trying to interact with someone over a video platform.
I don’t like AirBnb, not just because they have become the Uber of the hotel world, but because they don’t have very ethical business practices. I don’t find them to do a good job and though it is definitely profitable I don’t find it attractive. However, for a whole condo the going rate in my neighborhood is impressive.
I mentioned AirBnB because there are many other ways to offer my place for a short-term rental or even a 1-night stay. Yes, my place may end up being used for drug deals or for exchange of way too much bodily fluid but… it would make money, let’s not lose sight of what’s important.
Offer it up for short-term housing for those in need.
This one is a little harder to execute. If I can find another organization that does this kind of work it would it make it much easier. The donation would also be a tax write off for me besides being a good public service deed.
I could donate the whole condo to a charity but the math doesn’t make sense and I’m not quite charitable enough to give up 25% of my net worth to charity.
I could use it for couchsurfing.
Most will be familiar with the couchsurfing website which is aimed at letting travelers stay with each other for free. I love the idea, I love the concept. It’s perhaps more relevant in my situation because you literally will get a couch to sleep on, bed-bug free and 80″ long.
The idea though is that you, as the host, also live there and can be someone who shows the traveler around. But I think even without me being there it would be a wonderful idea.
So there are different ways of doing this. Thankfully plenty of website out there based on whatever you need. One site called Home Exchange allows you to swap your home with someone else visiting from anywhere in the world. If your search criteria and dates match then you do the exchange, neat. The selection is impressive, check out the site, it’s fun to play around with it.
There are other one is house-sitting options. Nomador is a popular site tough there are plenty others. Here you can elect to either have your house watched over or watch over someone else’s house. Usually the exchange is free though some throw in a little cash in either direction. Here is a list of recent requests for those who need house-sitting. Why does someone need house sitting? I didn’t actually ever know this, I thought it was one of those weird developed nation things but apparently it’s for pets and plants/gardens, duh!
Increase its value.
So what I have now that’s quite valuable is time. Time, read labor, tends to be the most expensive part of most transactions whether you pay for it directly on indirectly.
My condo is older and though it is livable it’s no fancy abode. It could use new floors, redoing the plaster walls or drywalling the whole place, redoing the kitchen and redoing the bathrooms… oh and the electricity. Well the main (only) closet needs some help too, but that’s it, otherwise it’s a peach.
I’m sure the HOA wouldn’t let me turn it into a 1-br though it’s not hard to do and if I really wanted to the HOA wouldn’t stop me. The issue is that I don’t really think it would increase its value all that much.
I figure a poured concrete floor, deleting the base boards, installing a custom concrete/metal kitchen cabinet, converting the tub to a walk-in shower and exposing some brick walls would definitely raise the value. Going all out I could get it done in 3-6 months. I would farm out the concrete floor and the tiling in the bathroom.
The value would go from $142k to probably $170k tops. Is it worth it? It may not seem like much to only profit $28k for all that work but the added benefit is that the condo would stand out, selling faster than others even in a down-market.
If I were to get an agent it would cost me 6%, which would be somewhere in the $9k range. 3% would go to the buyer’s realtor and 3% to my realtor.
Realtors are needed because they have access to the MLS listing, they do all the paperwork and work with lenders even to get everything moving smoothly.
I’ve done some research and I would probably do this myself. In my neighborhood quite a few of these transactions happen in cash. Inspections and other such things can be arranged independently and if a bank isn’t involved there really isn’t a whole lot to worry about.
The advantage I have here is that I don’t need to sell the house, I’m not in a hurry and I am not worried about making sure my house is noticed. Of course this is all in a seller’s market, as we are experiencing in 2016. Read this post a few years from now when we are in a housing bubble or whatever new malady that befalls the real estate world and you might chuckle.
What’s the verdict?
I don’t know yet. My carrying costs for this place is under $400/mo and that’s with me keeping electricity, water and internet on. It’s not a hefty expense and so I have time to make the right decision. I can utilize a combination of the above, that might be the best move.
A couple of years ago I rented out my car on Turo which is a peer-to-peer car rental service. It worked out beautifully and I made enough money to cover my auto insurance, registration etc. The peer-to-peer world has made owning expensive items more efficient, I likely will capitalize on it one way or another.