I know it’s already the second week of 2012, but it took me some time to reflect back on the past year to see what I’ve accomplished AND what I plan to do in the next year.
Let’s begin with the accomplishments. This past year, in no particular order, I achieved the following:
- Found my tenth different roommate
- Paid back my high interest rate second mortgage in FULL
- Refinanced my primary 30-year, 6.25% mortgage to a 15-year, 4.16% home equity loan. The reason why I did this is detailed in this post.
Let’s talk about 2012
Currently, I’m still single and my roommates are great to live with. I don’t see my martial situation changing nor do I hear of any wind of my roommates planning to move out. With that in mind, I can see myself continuing to rent out my spare rooms for the foreseeable future. The rental income is just ingrained into my long term financial planning that I can’t see myself stopping. In another words, the opportunity cost of loosing out on the rental income is just too costly.
Now, I’ve been debating with myself about efficiently using the rental income. I’ve think I thought about it long enough that I just want to make a decision and move on. With some major financial miles stone reach in 2011, I have two options to do with the rental income in 2012: accelerate my mortgage payments or build a more sizable savings.
The choice was kind of difficult to make because one side of me hates debt, but on the other hand, I like having the idea of a large stash to pay for unexpected expenses.
I know I can do a little bit of both, but building an emergency gives me more flexibility. If I feel the sizable saving becomes too much, I always have the option of paying it towards the principle, but I’ll never have the option of going the other way. So that’s my rationale and I’m not spending anymore time thinking about how I’m going to allocate the rental income.
What are your financial goals for 2012? I’d love to hear them. Perhaps it may instill motivation in others.
To All Newbie “live-in landlords”
If this is your first time to the site, welcome.
If you’re looking for answers on how to start out, I’m going out with a quick start guide because this is probably the #1 question I receive.