Would you quit your job if you got $24,000 a year?
Assume you rented a house for $2,000 a month. You own the home and it is completely paid off. You also live in another house that is also paid off. Would you quit your job (most likely a higher salary and benefits) to enjoy life and never work again for some money to survive? I would assume a very frugal life.
Oh when are the illogical “lAnDlOrDs ArE eViL!” pitchforks going to come out??
Either way, $24k doesn’t pay for shit. Taxes alone on a house could take a huge percentage of that $24k/year. Even the lamest of burger flipping jobs would double that money coming in and give you some more reasonable amount of funds to live off of. And if you are renting out a house for $2k/mo then you’d need insurance and cover maintenance. Everything costs money.
So I own two homes, though I don't rent out one, I let my dad and sister live in it rent free. But hypothetically I could rent it out for $2k per month. But that wouldn't be enough to live on. Between the two houses I have around $8k in property taxes. Paying for maintenance also gets expensive. The house needs to be painted every 5-6 years, annual maintenance on HVAC, and any unexpected surprises. Keeping two houses in a good, non-slumlord state would almost use up the $24k unless you did every single thing yourself. Plus insurance which is extra if you are renting, needing an LLC and basic accounting software like QuickBooks, etc.
So no, I wouldn't quit my job with a single rental. Plus I have three kids which increases my costs. Just doesn't make sense. I have thought about what I would do if I didn't have family to stay in my other house and do the basic upkeep. I think I would find a local handyman and let them stay there in exchange for providing upkeep and maintenance, maybe a few agreed upon improvements where I provide the materials. Would be tricky to work up the lease but possible.
I guess it depends on where you live, but in my area the property taxes for both houses would be in the $6k-$8k range, utilities in the house you live in would be about $5k/year, insurance for both homes $3500, and repairs/maintenance on both houses is gonna be at least $4k/year. That only leaves $3500 to $5500 for all the expenses for a whole year? No way. Plus that rental income is taxed too, so you wouldn’t even get the whole amount…
I wouldn't (not enough for my HCOL area). But if you are considering it, I would continue working and attempt to live on a budget of $24k/year. Save everything else you earn. See how you feel on that budget to see if it's realistic. I have a feeling that it would be a very tight budget given that you have to maintain 2 houses.
If I did that, I would actually end up being homeless. The taxes are super low in my state, but the average house tax alone hovers around $2k-$4k due to how expensive housing is over here.
This sort of situation is what you actually want to avoid OP - being house-rich but cash-poor screws you over more often than not. Better to have one house you can rent.
So you don’t only get 2k/month, but also two houses? That’s a major difference and one of the imo common mistakes made: only looking at income and not overall wealth.
The next question is whether this gets adjusted to inflation. If no this might work now, but give it 30 years and those 24k buy much less.
Also does this mean you need to stay where you currently are? Because one way to make this work would be to move to a low cost of living country. 24k in New York is poverty, on some small island you might live like a king with it.
All that said I think overall the best thing would be to treat this as a nice safety net that gives a lot of flexibility one would otherwise not enjoy.
Maybe reduce hours worked a bit when you need more free time. Achieve some goals faster. Or go for a risky move (e.g. chaning jobs or building a one business) with the security to fall back on.
Hell no. The housing taxes alone in my area are going to be like $7-8k for the two houses, average health insurance for a single person was about $8k in 2021, and average spend on food each year was about $9k. That’s already overbudget and we haven’t even figured in income tax yet, let alone utilities, repairs, and any other expenses.
What’s the most concise way to say “someone who uses the threat of police violence and homelessness to extort money from productive members of society”?
Nope. I enjoy my job and enjoy traveling around the world with the $$ that I earn.
Just had a weekend in Baltimore with quick zip down to Alexandria, VA and DC. Next month a 5 day weekend in Nashville. January a week in Cancun. March supposed to be Ireland (3rd visit). October 2024 Iceland & Norway for 10 days (4th trip in Norway).
I wouldn’t give up the travel. Thus, need work. Good thing I enjoy working on the boo boo bus 😉
In the US at least, medical insurance becomes the biggest factor in a decision like this. This lifestyle isn’t free, you’ve got property taxes on 2 homes, utilities for at least one of them, and repairs/maintenance assuming you aren’t a slumlord. That’s going to stretch that $2000 a month pretty tight. If you can do all that, get decent insurance, and live the lifestyle you want then it seems great. But I’d do the math really carefully and consider what you’d do if you had to have the rented house vacant for several months between renters.
So you’re giving me 2 houses and an UBI of $24,000? Yeah, that sounds great. I’d actually be fine with just the two free houses. The $24,000 a year seems quite insignifcant next to those.
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