The Neighborhood Next to Ours

The neighborhood next to ours in Portland

Back when we lived in Portland, the neighborhood next to ours was filled with street after street of large, beautiful homes, with big, green, well-manicured lawns and exquisite landscaping. The homes run the gamut of styles, from English Tudor to French Provincial, 50s Post Modern to Old Portland Foursquare, Mediterranean to Dutch Colonial. Volvos, BMWs, Mercedes and other high-end or new cars often sat in the driveways, and several of the homes had swimming pools. It seemed at least two, if not more, homes on each block had signs in the yards proclaiming that renovations, remodeling, or landscaping work was currently taking place there. The streets were lined with huge, leafy elms which kept the streets cool and inviting even on the hottest days, which was why I enjoyed walking there in the evenings during the summer.

It used to be my dream to live in this neighborhood. I wanted a beautiful lawn and landscaping, a bigger house for our family, a big elm tree in front. And for a while, Brett and I probably could have bought one of these homes. We instead bought a cheap house with a tiny yard up the hill from this neighborhood, with no trees at all in front. That turned out to be one of the best decisions we ever made considering what happened to Brett’s income a few years later. Because we bought the cheap house we were able to weather his loss of income and then climb out of the debt that we accrued. We’d have gone bankrupt if we’d bought the bigger house, but instead made a profit when we sold our house before moving to Hawaii.

The cheap house turned out to be a great house, perfect for our family in a perfect location.

These days I shudder when I think about the prices of homes for sale here on Kaua’i, or in other places we considered moving, and the annual taxes on those homes. I can only imagine how much the upkeep would be, as well as things like heating them in the winter or cooling in the summer. We had a small patio installed at our cheap house, a real wake-up call to what extensive landscaping and maintenance would cost (a LOT). I don’t even want to think of how much we would have paid to furnish a larger home, even with vintage or used furniture. Actually, a bigger home would probably have ended up mostly unfurnished, but I’m sure we would still have been craving stuff to fill it rather than feel satisfied with what we had. We would have been living in neighborhood full of Joneses, trying to keep up with and most likely failing and feeling miserable about it.

This is our dream apartment for the future. Brett and I can happily imagine living a space this size these days (photo credit: Beazy/Unsplash)

I never saw it coming back then, how minimalism has become more and more attractive to us as we grow older. We don’t want or desire so much space now, so much room to fill and maintain. We’ve learned how to live in small spaces, including how to carve out individual space so we don’t feel crowded, even in a one-room studio. The older we get, the fewer things we want to own. It’s been a surprising journey finding how little we need or want, and what we can easily let go of.

I can no longer imagine myself in one of those big houses back in Portland. These days I admire houses around the island but don’t covet them any more. I’m no longer looking at real estate websites and dreaming about the houses that might work for us somewhere. Our dreams these days are of living in other places around the world, borrowing someone else’s house for a month or so, for as long as we are able, and then finally ending up in a small apartment, with just the right amount of stuff.


All’s Well That Ends Well

Something I will miss: Sunset views from the dining room window
Something I will miss: Sunset views from the dining room window

Our landlord re-listed our house yesterday afternoon. We did one showing yesterday evening and have two more this afternoon, maybe three. He will have a new tenant and a new lease most likely by this weekend, and his rental income stream will continue on seamlessly. We will get our deposit back.

When we gave the landlord our notice the other day he exploded, and threatened to take us to court over the lost rent. Brett dealt with him calmly and firmly, but told him we would still be moving at the end of the month and why. We offered to do anything we could to help him find a new renter. We realize now that the explosion was most likely just his initial reaction to the news and that he needed to blow off steam. We hoped that after he had calmed down and thought things through he would back off with the threats and see the sense in quickly finding a new renter. In fact, in our phone calls with him yesterday he was very kind and apologetic, and thanked us over and over for showing the house for him. Still, his initial reaction made for a tense couple of days.

Although we were breaking the lease, it turned out our landlord had broken it first. Although he is the property owner and can sell his home at any time for any reason, there is a clause in our lease that states For Sale or For Rent signs could be put up and showings held during the last 30 days of the lease. Our landlord chose that number of days, we all agreed and we all signed. Any change to that time though without putting it in writing was a violation of the lease, which is what happened when he listed the house a full eight months before the end of the lease and put up signs and started showings, and long before we gave our notice. We couldn’t have blocked or stopped his listing the house, but we could have requested a change in the terms of the lease at that time (to month-to-month) so that we could look for a new home and not have to worry about breaking the lease.

Our “big stick” so to speak though, and what we think got our landlord to calm down, is that the rental apartment below us is illegal. It’s a very nice place, fully permitted as far as the construction and plumbing, but it’s not permitted to be used as a rental. It’s an ohana, an attached dwelling for use by extended family members. By law, an ohana is not allowed to have a full kitchen, and can contain only two of the following three items – refrigerator, stove, or sink – the rationale being that family members eat together and don’t need a full, separate kitchen. The apartment below us however has all three of those items as well as plenty of counter space and nice cabinets – it’s very obvious there’s a full kitchen to be used separately from the upstairs home, which shows that the apartment is being used for something other than as an ohana.

There are many illegal ohana rentals all over the island (as well as many legal ones), and some provide much-needed housing in the very tight rental market here. Others serve as vacation rentals. Usually with an ohana rental everyone looks the other way – they are part of island life. Still, if you have an illegal ohana rental, the last thing you want to do is tick off your tenants or your neighbors because they are the ones who will report you. I don’t think we would have actually reported our landlord, but we might have made him think we would if things had escalated too much further over our leaving.

(By the way, the unit downstairs is also what’s going to make this property very difficult to sell. A buyer cannot get a mortgage for a property with an illegal rental unit, nor can a buyer use the expected rental income from the unit to help qualify for a loan. The buyer for this property will most likely have to pay cash and waive the inspection, but anyone with that amount of cash can find a much nicer property around here for the price, even one that includes a legal rental unit.)

Anyway, we will help our landlord find a new tenant for our house (which is a legal rental), and get started on our move over to the new house. We meet with our new landlord tomorrow afternoon to pick up the keys. He asked for yesterday and today to do yard maintenance and a deep clean for us, although I’m not sure what there is to clean. The place was already immaculate.

All’s well that ends well . . . thank goodness!

OK, That Was Fast

for-rentAfter putting up a post on Thursday morning about the difficulties we expected to encounter in finding a new rental here on the island, things took a dramatic turnaround on Friday.

Late Thursday morning an ad appeared on Craigslist for a new 2-bedroom, 2-bath house over near the high school. There must have been something in it that caught my attention because even though there were no pictures I replied to the ad and also called the number. My call was returned in less than 30 minutes and I chatted with a very nice man for a few minutes about the place. Would we like to come and see it on Friday morning? Sure, I though, why not?

The house was small (only around 900 square feet, but had two bedrooms and two bathrooms). We Googled the address, but all that Google Maps showed was a construction site. OK, the house was not just “new” to Craigslist, it was actually NEW. The location looked very nice though, with the address located in a very lovely residential neighborhood that was only a few minutes drive from the girls’ high school.

We met the owner in front of the house a little after 10:00 a.m yesterday morning. He and Brett hit it right off as it turned out he was a retired Marine! They were swapping service stories in no time at all, and then it also turned out he was born and raised just a short distance away from where I was in Southern California! We were soon swapping stories as well about places in the area we both knew. Brett and I were starting to get a good feeling about things.

We fell in love with the place the second we stepped through the front gate. The front yard is enclosed and private, and there is a broad, covered lanai/porch leading up to the front door. We loved the color the house had been painted. And then we stepped inside . . .

I think both Brett and must have walked around with our mouths hanging open. The inside was GORGEOUS! The house is small, but everything in the house was done to perfection. Every feature was absolutely top quality, from the finishes to the fixtures to the window coverings to the appliances. And it really was NEW. For a small house, the floor plan was well laid out, there was ample storage, and we could see where all our things would easily fit. The house has an attached 2-car garage, the laundry is located inside the house, and there is a large, private yard. The rent includes weekly yard service, and there are avocado, guava and lemon trees on the property. The owner apologized for the amount of rent he was asking (less than we’re paying here, but tenant is responsible for their own utilities), but said the new property taxes that were levied last year caused him to ask as much as he did. We felt that for the location and the condition of the house that the monthly rent was more than reasonable.

We put down a deposit on the spot, and as of tomorrow we officially have a new rental! We had just paid for November in our current location, so will use this next month to gradually get our stuff moved out and over to our new place. Brett called and left our landlord a message yesterday evening that we were giving our notice. Technically we are breaking the lease and could be stuck owing the remaining six months’ rent. However, in Hawai’i a landlord is required to actively seek a new tenant if a current tenant under lease moves out. They can’t just sit around and then take you to court for missed rent; they are required to place ads, interview potential renters, etc. We have no doubts about him being able to rent this place quickly, even if it is being sold, and have offered to show the house to prospective renters.

Just to make the day more interesting though, after we got home and Brett had headed out to set up the utilities in our name, I received a call from the real estate agent that we had signed with to help us find a home. It turns out that the owners of the condo we had planned to buy wanted to know if we would be interested in a long-term lease on the condo with an option to buy in the future! Unbelievable! I told the agent that if they had called a day earlier we might have had a deal, but that we had just signed the lease for a new rental and were very happy with it.

This turned out to be w-a-y easier, and happened much faster than we ever expected, but we couldn’t be more thrilled. We will finally have a home all to ourselves – no more sharing anything, no more loud neighbors downstairs. There will be no more climbing up and down the stairs to do the laundry or to bring groceries into the house. The girls will be closer to their school, and we will be closer to town. We still won’t have a dishwasher, and we’ll miss the beautiful mountain views we have now, but for what we’re getting we can live without them.

But, now comes the real work, the getting us out of this house and settled into our new one. We should have everything in place before Meiling comes home, and before our son and family arrive in December, and are looking forward to celebrating Christmas in our new house!


Edging Back Into the Kaua’i Rental Market

for-rentRight now Brett and I are really only semi-seriously looking for a new place to rent, but I have been looking at Craigslist every day now to get an idea of what’s available in the current rental market and what prices are like (everyone here, including all property management companies, advertise on Craigslist). With our son and family visiting for Christmas, and Meiling also home for the holidays, we’d like to stay where we are though until after the first of the year.

However, the week before last a house showed up on Craigslist that we thought might be a good fit for us. It was a little bigger than the house we’re in now, in a great location, and the rent was a little less than we pay here. It had open beam ceilings in the living room, and a stunning ocean view from the back lanai. There were things we didn’t like about the house though: it had wall-to-wall carpeting; it was another upstairs unit with an apartment on the ground level; the laundry facilities were downstairs in the garage and shared with the other tenant; and again there was no dishwasher.

Still, we thought it was worth a try and we responded to the ad. We were actually the first people to call and request an application, but it took the owner a few days and a reminder to send one to us. We filled the application out and sent it right back, but after three days of hearing nothing I finally emailed her day before yesterday and asked her to let us know what was happening. I got an email back yesterday morning informing me that she had had 26 applicants (!) for the house, and had chosen someone else.

Her response was a sharp reminder of what we are going to be up against in our search for a new rental, that we’ll most likely be competing with a potential 20+ other applicants each time we find something that might work for us. The rental market is very tight on the island, especially for families, and nice, affordable rentals are snapped up quickly (in fact, if a rental lingers on Craigslist it typically means there is something seriously wrong with either the property or the owner). We have sufficient income, excellent credit scores, good references, and everything else that’s needed, but each time we apply we’ll be compared with who knows how many others with equal or maybe better qualifications. It’s going to be crazy.

We were very lucky to get the house we live in now and we know it. It’s been a great place to start off our life on Kaua’i. Our landlord’s real estate agent asked us again yesterday if we would consider staying here in this house after it’s sold – we’re an asset as we’re solid renters and do a good job of maintaining the property. But, both Brett and I would like to move on and try a different area on the island for a while if we can find a good place.

We’ll start seriously looking after the first of the year, but are prepared to jump before that if something suitable pops up. We see now though that we are really going to have to up our game if we want to come out on top in the rental market here.

When Retirement and College Clash


The dream of buying a home or giving our girls an affordable college education collided with each other last week, and college won.

To help cover the down payment and closing costs on the condo we wanted to buy, Brett and I had planned to withdraw some of our savings that’s sitting in an IRA. As we’re both over 59 1/2, there’s no penalty for withdrawal, and the way our retirement is funded we had only planned to use those savings when we had to make mandatory withdrawals at age 70 anyway.

However, any funds we withdrew would count as income for this year, and it turned out that the increase in our income brought about by withdrawing enough for a downpayment and closing costs would negatively affect us not once but three times.

First would be the tax burden based on our withdrawal. We currently have a very small tax bill as we pay no state income tax in Hawai’i on our retirement income, and very little Federal tax. That would change as we would not only be hit with higher Federal taxes based on our increased income in 2015, but would pay state tax as well on our withdrawal from the IRA (our other retirement income would still remain untaxed by Hawai’i). We were prepared for this hit.

What we were not prepared for was the dramatic effect that increase in income would have on the girls’ financial aid prospects.

The reason our retirement savings are in IRAs is that they are protected there; college financial aid formulations exclude sheltered retirement funds. Unprotected, those funds would be quickly tapped, and with three college age children Brett and I would be left with little to no savings in short order. Even if we had planned to use our savings to pay for college, with today’s costs there is no way we could cover expenses for three children over the next eight years. Plus, Rule #1 about saving for retirement is that you never jeopardize your retirement to pay for your children’s college.

Meiling was awarded a four-year scholarship to the University of Oregon that covers all her tuition and fees (she pays for room and board). If we increased our income by withdrawing from our IRA this year the bump would be enough that she would no longer qualify for any Federal financial aid meaning she would lose her scholarship, and we would either have to raid our retirement accounts even more to cover her costs or she would not be able to afford to continue at the university. The federal government could care less that this would be a one-time increase to our income, and used only for the purpose of buying a home, when calculating Meiling’s aid award, and likewise the universities financial aid office. If we took more money out of our accounts to cover her expenses next year our income would of course go up even more, and we would be setting up something of a vicious circle. And, we’re just talking about Meiling here. WenYu also heads off to college next year, and any savings we spent on Meiling would mean less or nothing for WenYu, with the increase in our income also affecting any aid she might be qualified to receive. According to federal financial aid calculators, even with two children in school, with the planned IRA withdrawals our 2015 income would still be too much for either girl to receive much, if any, Federal aid other than unsubsidized loans (NO!!), and we could forget about any need-based aid from any college. There might be merit aid, but there’s no way to count on that.

So, there were two hits we would be taking if we withdraw anything now from our IRA. However, it turned out there was still one more sting waiting in the wings.

Starting in 2016, the FAFSA will be filled out beginning October 1 using the previous year’s income (2015). No more will families have to wait until January to submit their forms and tax information and then try to figure out what kind of aid they might qualify for or whether they really can afford College X or College Y. Colleges and universities will be required to present more up-front aid information, so students and families can make better choices about where to apply and what to expect. This is an important and long-overdue change, one I am greatly in favor of. This change however means that our 2015 income will not only be used to determine aid for the 2016-2017 school year, but for the 2017-2018 year as well. Our supposed one-time income bump from the IRA withdrawal would count against us for two years, effectively cutting the girls out of any financial aid until Fall 2018.

The decision of what to do was actually easy. We cannot harm our girls’ efforts and dreams, and we cannot damage our future financial security. We cannot deny the girls the opportunities that are available for them now just because we want to buy a house or a condo. They didn’t ask for this life, but have made the most of what they have been given so far, and we cannot pull their futures out from under them.

The condo was a great buy, and would have been a perfect home for us. We have the income and resources to buy it, but tapping into those resources came with consequences. We were devastated to have to let the condo go as well as our dream of buying a home on Kaua’i, at least for the time being. We don’t know if anything else will be available and affordable again in the future. Maybe yes, but there’s also the possibility of a big NO. But, it’s a risk that we are going to have to take. Brett and I will wait until the girls are through school before we think about buying again.

In the coming days we will untangle ourselves from this latest purchase contract. We will continue to rent where we are for the time being, and after the first of they year we will begin looking for a new rental home.

It is what it is.

And We’re Off!


Our offer was accepted yesterday morning and we are under contract! Today we will be meeting with our agent to turn over the earnest money and our pre-qualification paperwork. We’ll also be discussing the inspection schedule and other things that need to and can be done now.

The whole process is going to take a while though, and I will frankly be surprised if we can close before the end of the year. The seller has to get VA approval on the CPR designation for the two houses on the lot, which can take anywhere from 30 – 90 days, and we can’t actually apply for our mortgage until that is done (without approval the VA won’t lend, so why apply until you know for sure). I also have to wait for income verification paperwork from the state of Oregon and Social Security, and the earliest I can expect to get those is sometime in October.

We’re definitely excited, but that excitement is tempered with the knowledge that the whole business is going to take a while. From previous experience we know that along the way there will be lots of deep breaths and self-reminders to calm down. We are currently a little concerned about interest rates possibly bumping up a bit, and a property tax issue that might muddy the waters a bit. But, we should be able to sort everything out, and hopefully the process will keep moving along. We’ll keep you posted!


A Tale of Two Houses

We were only looking last week, honest. And, I know things around here have turned more in the direction of settling down versus becoming nomads. But . . .

Our agent arranged for us to see three houses last Thursday (instead of a condo) in our preferred neighborhood and within our price range.

Why only three? Because that’s all that are currently available! There really are very few houses around in our price range in the area of the island we want to buy. And, houses here in our price range are snapped up fairly quickly, and although we’re not in a hurry we still wanted to get an idea of what we could expect to find in our price range.

Our first stop was to see two 2-bedroom houses that sit on the same lot. It’s a common set-up in Hawai’i, called a CPR, where a lot is not suitable for a subdivision for some reason but is still large enough to hold two homes. Both of the houses on the huge lot we visited are currently for sale and were within our price range.

We were informed upon arrival by the listing agent though that the VA would not approve the first house because the previous owners had done an un-permitted conversion of the carport into an extra room. We were crushed when we heard this because not only had the house been recently updated, but it also had a beautiful ocean view from the living room and both bedrooms. Do you know the odds of finding an affordable house with an ocean view? At the same time though we didn’t really care for the conversion, and would prefer to have a house with a carport and/or garage.

We were prepared then to be underwhelmed when we went to look at the second house on the lot, but found ourselves pleasantly surprised instead. There was no ocean view, but because it was set back further from the road it was quieter. The bathroom had been remodeled, and the kitchen had also been updated. There was a carport, lots of storage, and an avocado tree on the side of the house that was loaded with fruit. The yard was a nice size and in decent condition too. It wasn’t perfect, but there was nothing about it that screamed “run away!”

Then it was on to House #3, located just about a half mile up the road from the other two houses. It’s new construction, had a lovely, open floor plan that would work well for us and beautiful finishes, and . . . an unbelievably stunning ocean view from the bedrooms upstairs – positively breathtaking. We were practically prepared to make an offer on the spot just to get those views.

Brett and I came home and talked about the houses we had seen, and thinking we should probably make an offer on the new construction. But, as we started listing pros and cons, we realized that for both of us there were some things that just weren’t right about the house, and information we received after our agent talked with the listing agent confirmed our suspicions. We could see that the house wasn’t painted properly and would require a repaint in order to pass a VA inspection, but the builder wouldn’t do this or offer a credit. There was zero landscaping on the lot, just a lot of dirt, weeds and mud, and they again said they wouldn’t be providing any updates or any sort of credit for landscaping either. No appliances came with the house. There was also lots of road noise at the location. And, we finally asked ourselves, how much time would we be spending up in the bedrooms to make the view worth all the other hassles?

During the process of discussing the new construction we were comparing it to the second house on the lot we had looked at, the one without a view, and to our surprise that house was clearly coming out a winner. Although it was smaller than the new construction, the space was adequate and provided a lot of storage. We liked the yard and its potential, and loved the thought of having a prolific avocado tree. We preferred the location too: it was quieter and just a short walk down the hill into town or to the beach or bike path, and a five-minute walk away from the girls’ school. And, we reminded ourselves, the ocean view would be there every single time we went to the end of the driveway, either on foot or in the car.

Suddenly it seemed like a no-brainer, and we decided to go ahead and make an offer before the house slipped away. It had everything we wanted and needed, was in move-in ready condition, and the price was in our ballpark.

We submitted a formal offer last Friday. We knew it was low (not lowball, though), and wanted to see if or what the owner countered with. The first counteroffer came back on Saturday, but they barely dropped the price. Still, they indicated they were willing to negotiate so we came back yesterday with our top offer. Based on recent comps in the area it’s right on the money, so we shall see how serious they are about selling.

Will we be disappointed if it doesn’t work out? Not really, because we really didn’t think we’d find anything we liked this early and are not yet emotionally wrapped up in the house or the process (or desperate). We know there will be other houses coming up, and that maybe this one is just not meant to be.

But, maybe it is – we shall see. Stay tuned!


We Have a Sad


We learned some potentially upsetting news yesterday: We may not be able to get a VA mortgage for The Prince. We don’t know if this is a permanent removal from the VA’s list, or just a temporary situation. Whatever it is, The Prince’s condominium complex is no longer on the approved list.

The VA has very strict requirements for approving a condominium purchase, and while they might have approved a particular condominium in the past, things like as a percentage of residents in the community falling behind on HOA payments, or the percentage of owner occupancy dropping, can change whether the VA will currently approve a mortgage on a condo.

We definitely want to get a VA mortgage; it’s one of the best benefits we earned from our time in the service. VA mortgages have lower interest rates, require no money down and require no PMI with the loan. The VA also has a higher debt-to-income ratio, meaning you can get more house than you might be able to with a conventional mortgage.

We are going to do some more research this week and see if we can find out what is going on. On Saturday our agent told us that another agent from their office sold a unit with a VA mortgage just last year, so who knows? The complex is currently finishing a capital project (connecting to sewer), so maybe approval will be reinstated once that is done. We’re confident it’s not a problem with vacation rentals versus owner occupancy vacation rentals are not allowed.

Brett and I crunched numbers this weekend just to make ourselves sure again of what we can afford because we just may have to expand our search and start looking at houses as well. If it turns out that we can’t purchase The Prince we’ll be genuinely very sad because it’s exactly what we were hoping to buy. Nothing else currently available has such a good location as well the amenities we are looking for.

Hurry Up and Wait


While we’re eager to get things moving now that we’ve decided to buy, other players in the game are making sure we don’t rush into anything. A VA loan requires an inordinate amount of time and paperwork, and some of that paperwork is going to take some time to get our hands on.

But, IF everything goes as planned we may be in our new home by next January. Here is our tentative timeline:


  • Get pre-qualified for VA loan: We have done this already, and as we know our income isn’t going to change we feel confident in looking at certain properties; we know how much we can afford.
  • Order VA eligibility form: Brett has already started this process, but if push comes to shove I already have mine on hand (we used my eligibility to buy our first home).
  • Request retirement and Social Security award letters: I am now officially retired from the State of Oregon, but more toward the end of the month is the earliest I can request an award letter. Brett will order ones for his Social Security and pension benefits. I cannot get one for my Social Security because I cannot apply for benefits until October.


  • Apply for my Social Security Benefits. I want them to start next January, so October 1 is the first day I can apply (and I will be applying on that day). Once my application is approved I can request an award letter, and once we have that award letter we can . . .
  • Get pre-approved for VA home loan. We need the pre-approval to make an offer, and this will be the earliest we can do this. The VA approval is good for 90 days. We’re not too worried about losing out on either The Prince or The Pauper, for example, because the average days on market here for condos is somewhere between 100 and 200! Who knows though, another condo we like and can afford may become available as well.
  • Make an offer! If offer is approved, then we will . . .
  • Start VA “clean up” process. The VA requires you to close all sorts of open credit accounts, ones you didn’t even know you had. And, which ones they choose are anyone’s guess. I can only think of two open accounts that we don’t use that the VA might want us to close.


  • Order home inspection (if our offer has been accepted).


  • A nice, quiet month of waiting. If we end up buying The Pauper, or another condo that needs some work, we will start meeting with contractors, handymen, etc. to get a tentative timeline for that work.


  • Officially apply for home loan. My Social Security income will begin this month so it will be all systems GO! The VA will already have most of the necessary paperwork, but some may need to be updated, and they will run another credit check. How long this could take is anyone’s guess.
  • Hopefully close by the end of the month, but this may go into February.

As things move along we’ll have a better grip on the process, so the times above are only guesses. Of course, nothing ever goes according to plan, but we are secure in our income sources and amounts, and safe in our current home until the end of May. Our agent will help us break the lease here if we do end up moving earlier than that; at worst we will lose our deposit. But, hopefully not!