My Mom Destroyed My Rental Property

Brought to you by CHM, a budget-friendly, faith-based alternative to health insurance. chministries.org slash budget. I naively rented out my house to my mother about 13 years ago, and she's fallen on very hard times because of some very bad decisions. And after trying to move her out, we've identified maybe about $20,000 of damage as a very rough estimate that needs to be taken care of, and I'm trying to decide where I should take these funds from. Okay, I'm assuming she has no money if she's fallen on hard times. Yeah, that's correct. She actually owes more money than she has, so very hard times. How long has this been going on? Well, the past two years. She quit her job. She's been living off her retirement for the she's exhausted all of those funds and has... When's the last time she paid rent? So this was the last month. I talked to her because it was the first month she paid in cash, and I thought that was very suspicious. So I confronted her on it, and she told me she only has enough for one more month of rent. So we've been spending the past few weeks trying to get her moved out so we can get repairs done. Where is she going? That's still up in the air, either with myself or my younger brother, which isn't... I don't believe either of those options are the best option, but those are the only options we have. Is she well? How old is she? She is 63. Oh, so why isn't she working? There's not a good answer for that, and the answer she's given me are just not very valid. So I can't give you a good excuse. It's either health problems or stress problems or mental problems. It's all of those combined, but it doesn't legitimize her decision making. So there's $20,000 of damages, and the question was, where do I take the money from? What are your options? So I currently have about $19,600 liquid stretched across my banking accounts. I also have a paid-off truck that I use as my daily driver, and I have a Mustang that I currently owe $9,000 on as something I'm a little more sentimentally attached to than the truck, but the truck is my daily driver. What's it worth? It's probably worth $30,000 to $35,000. Oh, wow. So question, long-term. So let's say your mom moves out. You cover the $20,000 in damages. What happens next? You bring another renter in who has the propensity to do the same thing, and now, again, you're on the hook for however much the damages are. What's the long-term play here to not be in this situation again? If you're serious about budgeting, you can't ignore healthcare. For most families, it's one of the biggest line items. Y'all, you can cut subscriptions and eating out, but if you're still stuck with a massive premium every month, it's going to be stressful. Now, Christian Healthcare Ministries is different. It's not insurance. It's believers sharing each other's medical bills, and the best part? Programs start at just $115 a month. So go to chministries.org slash budget and use code RAMSEY for 50% credit towards your first month. What's the long-term play here to not be in this situation again? All right. Me and my wife are still kind of debating that question, whether it's worth keeping and renting out a little more legitimate with a very detailed lease agreement or selling the property, which I would prefer not to do, but that option is there too just to make all these problems go away. So here's what I'm thinking. Let's talk about the 20,000 first, and then let's talk about, George and I can give you some ideas for the long-term play on this based on your finances. Yeah. I don't think your mom has the money. I think continuing to hound her about this is just going to be like you bashing your head against the wall. Fair enough? Right. So yeah. No, I've got the bruises to prove it. And you don't have a landlord insurance policy? No, no. This was strictly just because I was trying to help my mom out. And she wasn't a legal tenant then. There was no deposit, nothing signed. Okay. So this is, it's on you. And I think that stinks to realize. And we also need to take our part in owning that we made a whole lot of mistakes on our own that got us here. Number one was letting mom live there, kind of knowing that she wasn't in a good financial spot and probably this day would come where she didn't take care of the place. She can't afford to rent and we have to evict our own mother. Right. Everything you said is accurate. I even let her know if she did move in with us that I don't want to have her pay any rent. All I care about is her getting back on her feet. So I'm fully acknowledged that this is in my hands and I'm going to have to be the one to solve this problem. And she'll likely be your burden financially as well for the foreseeable future. That's right as well. That's one of my concerns. Yeah. So yeah, if I'm you, I am going to scrounge together this money and I'm going to try to get this stuff done for the cheapest price possible. It's possible that you can do it for less than 20,000. Maybe you put your own sweat equity in it. I don't know the nature of the repairs, but let's talk about further down the line. The way you mentioned the 20,000, you know, scraping together from here and there. I want to know about your financial snapshot and if it makes sense to even keep this rental house. So tell us about you. Yeah, I'm retired military. So I have a very stable pension that allows me enough to support two mortgages. It's not going to hit me financially at all. Just a big hit is going to be this complete liquidation of all my savings because I only have 19,600 liquid. So it's going to put me back to square one, which I'm trying to avoid. How much are you making a month? 8,700. And then what are your total expenses, including everything, insurance, food, bills, all the mortgages? What's your outcome? My total income for the month, yeah, 8,000. My total expenses is 3,000 after bills, not counting groceries, just the bills. So counting everything now, are you spending about five grand a month, you'd say? Yes. Okay. So you might have 3,000 left over each month. Yes. So we can cashflow this over the next month, two months, three months to where you're not fully liquidating it all at once. Maybe we spend 10 grand now and then another five grand next month, five grand the following month, and then we're done. All the while, we're using as much of our income to cashflow it versus draining the savings. Okay. Tell me about your current residence. What do you owe on that? We bought this property in 2021 for 300. I think we owe 280 still left on it. What's it worth? 260, 261. I'm sorry. Okay. What's it worth? Probably low 400 maybe. And what about the rental? What do you owe on it and what's it worth? The rental, we owe 88,000. It's probably worth 240. Okay. So after selling it and everything, I'd probably pocket 140. What would you do with that 140 if you had that sitting around on an account? I would like to invest it into the S&P and the Dow or whatever would be best and just leave it there. I love that. Think about that plan versus being a landlord. It sounds like you don't love dealing with the physical issues, a tenant, the upkeep and maintenance. So if you could get a return by that money just being invested, it might be even more than you would have gotten if you had a tenant. I agree with that. I know you said you have a pension, but do you have a nest egg anywhere invested? I do. I have a small investment with the S&P and the Dow. Not very anything substantial worth talking about. It's 6,600, but I do have the TSP from my time in the military. Then I got to say, based on how this is hitting you as an inconvenience, I could see down the road this rental continuing to be an inconvenience. I like the idea of you selling it and taking that money and investing it for your future or however you think it would be best spent. Especially with mom potentially moving in, you're going to have your hands full. Christian Health Care Ministries can save your family hundreds of dollars on health care every month. Learn more at chministries.org slash budget.