Selling My Apartment

I realized I never wrote in much detail about selling my apartment, and it's now been over a year since that happened!
As a refresher, I had owned the apartment for a couple of years when I met Sweetie. Once Sweetie came along, I gradually started to spend less and less time there, to the point where I was almost never home and kept a lot of things at Sweetie's place. This made me a bit sad, as buying my own home had been a milestone for me, financially and emotionally-- it felt great to have that independence. But as Sweetie and I gradually got to the point of being committed to each other and wanting to live together, it began to seem very indulgent to hang onto this extra apartment that I was basically using for storage. Yet I found it a bit difficult to take any action to change things until a situation fell into my lap-- a friend of a friend needed a place to stay temporarily. It started out as just being for a couple of months, which seemed like the perfect chance to test the waters and make a little money. It worked out well, and turned into a full year arrangement, and during that time, I didn't really miss having my own space. It was actually a relief not to have to visit it weekly to check on things. But being a landlord brought a few other headaches-- somehow having to repair the heat or the toilet seemed a bit more annoying when I was doing it for someone other than myself! Although I realized I could make a decent profit as a landlord, I decided to try to sell the place when my tenants told me they'd be moving out.

From doing some research about the market, things seemed pretty good. And I had actually already had an offer from an interested party, an investor who already owned another unit in the building. I emailed him to see if he was still interested, and he was-- until he couldn't get a mortgage. I figured it wasn't that surprising that banks might not want too many units in the building to be owned by an absentee landlord, so I didn't think too much of it, and took the next step, which was asking my Facebook friends if anyone wanted to buy an apartment!
I kind of knew the "for sale by owner" thing could bring some headaches, but it also seemed worth a try. I was sure that my apartment would sell for more than I'd paid, but I worried that a 6% fee might eat up a lot of the profit. So I was happy when I immediately had some interest from some college friends who I hadn't been in close touch with in recent years. I had all the worries you'd expect about mixing friendship and business, but it also seemed like the friendship was at arm's length enough that it wouldn't cause any big problems. There was a bit of negotiation, but we pretty quickly agreed to what seemed like a fair price, and got our lawyers talking.

And then... they couldn't get a mortgage either. This started to worry me a bit-- their finances were good but they weren't rolling in dough (or they wouldn't have wanted my apartment anyway!). It wasn't that they couldn't qualify for a mortgage, it was that there was an issue with the building. Because I'd changed my address on my taxes, I'd tipped the owner-occupancy rate under 50%, and in the climate of recent years with banks being so much more cautious after the financial crisis, this and a couple other quirks of the building seemed to make it challenging. It was a bit of a surprise, as some another unit in the building had just sold and those new buyers had managed to get a mortgage. But now that 2 potential buyers had bitten the dust, I decided it was time to get a broker involved....

Stay tuned for part 2 of this post later this week!

2012 Income and Expenses

2012 was a great year in terms of income-- I hit another new high:

Salary $106,244
Bonus $18,239
Employer contributions to my 401K $8,119
Dividends $15,977
Realized Gain (from a fund change made in 401k) $11,347
Blogging income $4,402
Gifts received $100
Interest $208
Tax refunds $2,516
Total Income $167,152

Almost all the dividends and realized gains were reinvested, and sometimes I don't really even consider these "real" income. But I love seeing my money work for me-- that is over $35,000 worth of income made not from labor but from my own savings and 401K participation.

The other income I had this year was $10,000 in rent from the tenants in my apartment, but for this year, I am kind of looking at it as a defrayal of my housing expenses. I'll start breaking this out differently next year, as I'll be reclassifying some of my expenses as business expenses for an investment property rather than personal household expenses.

Now for expenses:

Bank Charge	$77
Charity	$1,153
Clothing	$3,062
Dining / Groceries	$11,296
Education	$458
Entertainment	$1,364
Gifts Given	$2,266
Gym	$2,249
Household	$1,792
Housing (net)	$11,974
Income taxes	$34,639
Medical	$1,714
Miscellaneous	$3,434
Newspapers and Magazines	$404
Travel	$8,421
Utilities Internet Access	$360
Utilities Telephone	$953

A few notes:

• Charity refers to my personal contributions. I also plan to donate all the blogging income from this site.
• Dining-- about $8500 of this is for stuff shared with Sweetie. (I have to admit that we have been indulging in fancier wines than we used to! We buy it by the mixed case and usually 1 or 2 of the bottles is a special treat, i.e. something in the $16-35 range, compared to the $9-12 range for the rest. But at least in restaurants, we tend to stay with whatever's cheapest.) The rest is mostly for my own breakfasts and lunches.
• Entertainment was pretty high this year, due to buying more tickets for concerts and theater, including a rather expensive one to see Madonna at Yankee Stadium
• Gym-- this covers a membership renewal for 2 years
• Household is mainly laundry and dry-cleaning, plus a new armchair for the apartment Sweetie and I now share
• Housing-- as noted above, I pulled together my housing expenses such as condo charges, property tax, mortgage interest, rent I pay to Sweetie, and gas and electric charges for my condo, and then subtracted the rent I receive from tenants to arrive at a net housing cost for the year. This does not include about $10,000 in mortgage principal I've paid off, as I view that as a transfer from my cash net worth to home equity.
• Miscellaneous included a new iPhone and a lot of art supplies, plus haircuts and all the usual little personal items
• Travel includes daily commuting, some family visits, and a 2-week summer vacation in Europe.

Total expenses for the year came to $85,616. This is also an all-time high. I think the new iPhone, big vacation, 2-year gym expense and new chair account for a lot of that, plus trying to take better advantage of all the culture NYC has to offer.

Net savings were $81,536, of which $10,125 is the transfer to home equity for paying off mortgage principal. This is NOT an all-time high, but it's second only to the year when I received a $25,000 inheritance, so I'm not going to beat myself up about it. I saved about $5000 more than I did last year,
and about $9000 more than I did in 2010 if you back out the inheritance.

As always, I could easily have cut back on expenses and saved more, and I always have these thoughts about how much sooner I could retire if I did, and whether I'll wish I had saved more when there's another economic crisis... but at the end of the day, I am comfortable enough with my savings and net worth so far to allow myself some luxuries. I feel very, very lucky and thankful for the good fortune that has come my way.