Posted by Rich-CA on July 31, 2007 at 18:36:19:
I would look at the numbers. Does she need cash from the payout for any reason? if so, then pay off whichever has the lower mortgage. If one has a higher interest rate, perhaps that one should be paid off. She really needs to lay out what she wants to accomplish and then make her choice on that basis.
Pay off residential or rental property. - Posted by MelB
Posted by MelB on July 31, 2007 at 09:04:16:
Hello,
I’m actually posting on behalf of my cousin. She recently lost her husband & will be receiving a decent some of money. She currently has a rental property & her current home (i.e. her primary residence). Prior to her husband’s death, her rental home was on the market for sale. (The taxes were increasing.) After her husband passed away, she planned to continue with her plans to sell her rental (which has been on the market for some time due to the slow market in that area) & just pay off her primary residence. However, now she is considering keeping the rental property, paying it off & just continue to pay her montly mortgage on her primary home as opposed to paying off the mortgage on that home.
I told her that she should probably speak to a financial advisor, but I figured I’d ask here, too.
Re: Pay off residential or rental property. - Posted by Nancy in NC
Posted by Nancy in NC on July 31, 2007 at 20:02:33:
The first year of grief is the worst, but it can and may take up to three years for her to be able to make major decisions. I would put the money in a 12 month CD. That should earn better interest than a money market and would lessen the temptation to spend it the first year.
When taxes and insurance go up I raise the rent. I am sure she can manage the property for one year. I know it is additional stress. But everything will stress her this year.
I just lost a tenant at age 43 to a heart attack. It is a good reminder for all of us to get our financial matters in order.
N
Re: Pay off residential or rental property. - Posted by Bill Jacobsen
Posted by Bill Jacobsen on July 31, 2007 at 13:19:18:
I would advise her to do nothing for awhile. Receive her money and put it in a money market fund. Don’t make any big decisions for 3 months to 6 months.
Her financial situation is different than it was when married and so the decisions will be understandably different. Just don’t make them right away. You can later decide if you really want to be a landlord.
Good luck and I am sorry for your loss.
Bill
Re: Pay off residential or rental property. - Posted by melb
Posted by melb on July 31, 2007 at 13:24:03:
I agree that she should definitely take time to make this decision. However, she is already a landlord. LOL!! She already owns a property and it is currently being rented out. She is just trying to plan what she should do next.
Again, thank you for your response.