15 Apr 2013

When Life Gives You Lemons: Part 1

I am not really sure if it's an appropriate title, because I don't think I am quite at the point of actually making lemonade, but it seemed better than some of the other titles such as The Crap We are Dealt, or Why Did This Happen to Me?, or Ugh! (yes, I seriously considered that as a post title....).

More than a month after we received some bad news about our rental house I think I am finally ready to write about it.  I've debated if I should even share this story, but since it has changed so many of our plans and has taught us a huge lesson, I figure it's worth putting it out there.

As can sometimes happen with me, I started writing the story and it turned into a novel.  So, I am going to divide this up into a couple of posts - mostly so that you aren't stuck at your computer for an hour reading.  

My quick disclaimer up front is that I need to keep the identities of everyone involved confidential, so I am purposely choosing to not mention the town name, the insurance company, the tenants, etc.  Hopefully the whole story will still make sense, but if some details are a little foggy that is why.

The Backstory
When Mr. Swell and I met he was living in a town 2 hours away from where I was living.  He had lived there for 4 years and had decided it was time to move on from the small house he was living in.  The market was hot at the time and new houses were being built in the town.  In 2008, he took the plunge and bought himself a brand new 2 story house.  The house was about 1500 sq. ft, with 3 bedrooms and 2.5 bathrooms.  It had real hardwood, a fireplace, maple cabinets and a HUGE backyard on a pie lot.  It was nice, really nice.

Right while he was in the middle of finalizing the deal, we met.  He moved into the house in May 2008 and we travelled back and forth for the summer and fall spending time together when we could.  (My car saw a lot of miles that summer.)

In the late fall of 2008 Mr. Swell accepted a transfer to a work location that would allow us to be closer together. It meant that he would be moving and would move out of his brand new house.  (Unfortunately it wasn't an option at the time for my job to move closer to him).

Between the spring of 2008 and the late fall, the bottom fell out of the market.  House prices were no longer rising, and interest rates plummeted.  His mortgage had a breakage penalty of either 3 month's interest or the difference in interest rates for the remainder of the term.  The interest rates had dropped significantly in the 6 months since he bought the house, and with 4.5 years left on his mortgage it meant that the breakage fees were going to be around $20,000.  Since the market hadn't increased, it meant that he wasn't able to sell his house without a loss.  Bummer.

In a happy coincidence, I came across a company that was looking to rent a home.  This company had employees who rotated through work posts in the town, so they needed a house that was appropriate for a professional person and had enough space to possibly house 1 or 2 employees at a time.  His house fit the bill.  It seemed perfect.  In our correspondence with the company they indicated that they had a lawn maintenance person, a cleaning person and they also had someone local who would check on the house if it were to be vacant. The lease was signed and we went on our merry little way.

In December 2009 we moved to Edmonton.  We sold the condo we had (and took a big hit), and bought our current house.  Our rental house was now 3 hours away, but the renters were working out so well that we decided to keep everything going the way it was.  Since we had long term renters who were covering the mortgage payment and taking care of the place (they said they had a maintenance guy, a cleaner, etc) we hardly worried about the rental.  We would go twice a year to fix any lingering items and to just check in on the place.  We had no idea when someone was living in the house or not because we continued to receive rent either way.

About a year ago we decided that we wanted to start saving so that we would be able to move this spring.  Our current house was starting to feel a little small and we craved a big backyard.  Fin and Diefenbaker need an area to run and play, and our current yard just doesn't have the space.  We thought about selling the rental house to provide us with some extra money for a down payment, but again since the renters were working so well, we figured we might as well keep it.  When we were ready to sell the rental we hoped that we'd have enough equity in the house that we'd come out quite a bit ahead.

The funny (maybe not funny ha-ha), is that we always joked that our rental house was nicer than the house we actually lived in.  And it was. It really was. We had always said if we moved back to that town we would have no problem moving into that house.

After weighing a million pros and cons about moving out of our current house we decided that it was something we needed to do.  It may make more financial sense to stay in this house, but in order for our family to thrive we knew that we needed a new space.  We set a goal and put it into action.  We had a number in our heads that we needed to attain in cash before we could even think about moving.  Our mortgage term was up in December, so we renewed it with the full intent of moving.  We picked a small term and went with the company that had the best porting policy around.

In February we reached our cash goal.  We felt so good.  It was the most money we had EVER had in the bank at one time.  We were busy finishing up those nagging tasks in the house (can you say baseboards??? My arch nemesis) and had full plans to start talking to real estate agents in April.  We were feeling pretty good. 

The Gong Show
One morning in early March (a Friday) I was at the gym when my cell phone rang.  It was Mr. Swell and he said he had received a call from the town telling him that an alarm was going off at the rental house.  I asked him what sort of alarm and he said he didn't know. We both figured it was a smoke alarm.  He said he'd call the Company and ask them to have someone go look into it.  I carried on running....

An hour later Mr. Swell called back.  He said that the RCMP (the police) were standing outside the front door and could see water pouring down from the second floor ceiling into the kitchen.  The cop's exact words where "you aren't going to be happy".  He asked if we approved him to break down the door to turn off the water.

Continued....read part 2 here.



11 comments:

  1. Uh oh.... Yikes.

    Jenny
    Www.simcoestreet.blogspot.com

    ReplyDelete
  2. Oh no, that sounds horrible!

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  3. oh no!!!!!! and i would have kept reading the whole story- email me your draft! i can't wait til tomorrow!!!!

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  4. Oh boy, what a cliff hanger! I'm anxious to read the rest! :(

    Laurie @ Vin'yet Etc.

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  5. Oh boy... Being a landlord myself that lives 3000+ KMs away I am on the edge of my seat and a little nauseous...

    ReplyDelete
    Replies
    1. Yikes! Well hopefully our story will help you make sure you know your insurance contract....

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  6. Oh my...I remember reading something a while back where you hinted at how horrible a situation y'all were facing. For some reason, I was confused and thought it was the house you were in and that you had to leave and go to a rental a few hours away.

    Although I am relieved that wasn't the case, just for the logistics alone...I am so sad for all that you have had to go through, either way it still doesn't sound like any fun.

    Hugs!

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    Replies
    1. Thanks Erica! I am happy that we didn't have to move 3 hours away - the drive back and forth just to visit is enough!

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  7. Oh no!!!! Kelly!?! Total cliffhanger...I have to know what happened!? I am so so sorry!!! It doesn't sound good at all!!! :( Jesse @ Scout & Nimble

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