> Shawna Eccles brought the two-story, semi-detached home for about $477,000 in February 2019 and exhausted her savings to renovate it. [...] "all of my money covers the mortgage, water bill and property taxes,” Eccles told The Post.
I am not going to say it's a good outcome that Eccles is effectively broke and homeless - but it seems absolutely bizarre to me that someone would put their entire savings into a house to use as a rental property when they don't have the budget to spend on mortgage + upkeep and also on their own needs.
What happens if Eccles' tenant moves out and nobody moves in, for instance? It could happen for many reasons. It could have happened that the tenant died of COVID in late March 2020 just as housing demand started to plummet! It could happen that the place gets damaged and becomes uninhabitable and needs repairs, and even if you put off paying for the repair, you still have to pay the mortgage and the property tax and nobody can pay you rent.
If Eccles had a down payment for a $477K house in the bank, why didn't she keep some of it as an emergency fund? What if she or a family member she cares about gets sick?
I have enough money for such a down payment in the bank, and I have a very high-paying tech job, and I'm paying rent on an apartment for myself and looking for a small place to buy for myself - I barely think I've crossed the point where a down payment would leave me with a reasonable amount of savings for an emergency fund (objectively I'm well past that point, but I still worry about it), I have the option of living with my parents if something bad happens, etc. The idea that you would put your entire savings and your entire income into a place for someone else to live is just incomprehensible to me.
I don't have an answer for this particular case, but it seems absolutely good to me that potential new Shawna Eccleses understand that a house is not the sort of thing you put your entire life savings into in the expectation that it will be a money-making vehicle. If you want to put your whole savings into a house for yourself, great. If you have a place for yourself to live and you have the savings (or income) to deal with a vacant property, sure, you may as well buy a property and rent it out. But this is reckless, and if our society's policy discourages people in the future from being reckless, that seems good in the long run.
The choice is probably subtler than between making people who simply can't afford a place homeless and making people who can definitely afford a place and were irresponsible with their money homeless, but if that's really the choice, the latter seems like the obvious right choice.