Following TickTock's example
, here's a lifestyle we hope to avoid.
The other day we were working on our rental's yard when one of the tenants asked "How much is your electric bill?" I was all set to launch into my solar proselytizing when my spouse said "This house usually runs $50-$75 a month." Our tenant said "Our bill last month was $750."
When I regained consciousness we realized that they'd been running their bedroom window air conditioner. This is not a good idea in a house that has uninsulated walls and jalousie windows, but her husband spends all day in a freezing A/C windowless bunker and I guess he doesn't tolerate the heat very well yet. He just moved back to Hawaii six months ago so he'll probably adapt by next summer and their electric bill will drop back down. Once she realized what the issue was, she seemed to feel that the A/C was a necessary expense.
But he drives a late-model SUV too big to fit under the garage door and she drives a spankin'-new sedan. Over half of the two-car garage is stacked to the ceiling with toys-- an air hockey table, a foosball table, and lots of other man gear. Their media wall includes at least a 60" TV and associated high-powered acoustics. Their furniture is top-of-the-line and there's a lot of it. They even have a full-size pool table on the back lanai.
He's in his early 40s and she's fairly young-- maybe mid 20s. They have a four-year-old and a two-year-old and they've happily announced that she's pregnant. Nice people, seem to be good parents.
This lifestyle isn't possible on a GS-12 salary, but he earns a 25% tax-free COLA (for Hawaii's expenses) and he's a retired E-7. This works out to a rough total of $96K/year or $8000/month. Their rent is $2800/month so their housing expenses must be about 40% of their gross income, which is high yet achievable. The good news is that his job seems secure unless the DoD really slashes intelligence spending.
Raising three kids in Hawaii with that material lifestyle, we're pretty sure they're not saving for a house down payment. I don't know anything about their savings (or their inheritances) but at this spending level he's going to be working forever. I was ready to wave goodbye to these people at the end of their lease and sell our rental, but we might be looking at a long-term tenant. That's a good thing, but I sure hope his pay increases keep up with the rental market.
Is it good to know that your tenants are unlikely to move because they're financially hobbled, or should we be concerned about prolonging the longevity of the golden goose?
These are the questions that I ponder while I'm pullin' weeds...