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Choosing between a better house or more savings
Old 10-13-2006, 05:15 PM   #1
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Choosing between a better house or more savings

We recently moved to to TN, following my decision to semi-ER. For now we're renting, but the house hunting process has quickly uncovered a small dilemma...it seems that for us, the difference between a "nice" house and one that is just sort of OK amounts to about $50k. This isn't a show stopper in the scheme of things but it does represent a perpetual $2000/yr in SWR spending, a useful sum.

So, the question is: Which will contribute more to our overall quality of life...a somewhat nicer house or the extra $2000 bucks per year in discretionary spending? I know this is a Very subjective call but I wonder how others might view this trade-off? Maybe I'm just asking for it given this LBYM crowd
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Re: Choosing between a better house or more savings
Old 10-13-2006, 05:26 PM   #2
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Re: Choosing between a better house or more savings

Get the nicer house. You'll never regret it.
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Re: Choosing between a better house or more savings
Old 10-13-2006, 05:29 PM   #3
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Re: Choosing between a better house or more savings

I wonder if waiting a bit to see if prices come down might be the thing to do. If it does then the nicer house can be bought for the lower price making everyone happy.
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Re: Choosing between a better house or more savings
Old 10-13-2006, 05:30 PM   #4
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Re: Choosing between a better house or more savings

Quote:
Originally Posted by Rock
I know this is a Very subjective call...
It sure is. Everyone's circumstances are different, but we opted to spend a little extra money to get the "right" house for our retirement. Since we spend a lot more time here, it seems only reasonable that it be someplace we really like.

But that's just us...

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Re: Choosing between a better house or more savings
Old 10-13-2006, 05:32 PM   #5
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Re: Choosing between a better house or more savings

Depends on what you are going to spend the 2k on
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Re: Choosing between a better house or more savings
Old 10-13-2006, 05:56 PM   #6
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Re: Choosing between a better house or more savings

I would say it depends on the size of your portfolio. If you are going to have to squeeze it hard to live comfortably, then I say buy the cheaper. If there is more wiggle room, then go for what you like.

Picking a good neighborhood is more important than house size (unless you have a lot of kids at home) If not, a smaller house in a nice neighborhood will work just fine for most people.
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Re: Choosing between a better house or more savings
Old 10-13-2006, 06:31 PM   #7
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Re: Choosing between a better house or more savings

Get the house! There are many of us that wish we had such a choice. In some parts of the country, it takes a lot more cash to make much difference. It's a small amount to pay to go from "OK", to really nice. You should also look at the difference in expenses (taxes, utilities, maintainance, etc.) for one home vs. the other. I would think the ongoing expenses would be more of a determinant than an add'l 50k up front. The 2k per year might be offset in some other fashion.
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Re: Choosing between a better house or more savings
Old 10-13-2006, 06:52 PM   #8
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Re: Choosing between a better house or more savings

Everyone has different ideas of what makes a house "nice". If you are considering spending 50k to get granite counters, designer wallpaper, and a pool, then I would say think carefully. If you're paying 50k for a home that is more solidly built, in a safer neighborhood, and has needed space then it's something to consider.
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Re: Choosing between a better house or more savings
Old 10-13-2006, 07:02 PM   #9
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Re: Choosing between a better house or more savings

The problem with the question is you do not say what you get for the $50K...

Let me give an example.. I recently was surveyed and they were asking me about townhouses in my area... some of the questions were 'would you pay $50K more to be on the third floor?".. or, would you pay $35K more for a deck... I said 'NO'.. the value for these items were not that much to me...

BUT, if the value is that much better.. then buy the better house..
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Re: Choosing between a better house or more savings
Old 10-13-2006, 07:02 PM   #10
 
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Re: Choosing between a better house or more savings

I'd go for the house! - $50K in the housing market is not that much. If your decision was spending $400K or $700K - I'd advise the $400K.
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Re: Choosing between a better house or more savings
Old 10-13-2006, 07:41 PM   #11
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Re: Choosing between a better house or more savings

What part of Tennessee you buying in? I'm currently in the process of buying a house in northern Georgia, just south of Chattanooga. I have found that I get more for my money in Ga, than Tn. Downside is Georgia does have a state income tax but also less sales tax.
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Re: Choosing between a better house or more savings
Old 10-13-2006, 09:18 PM   #12
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Re: Choosing between a better house or more savings

$2K/yr is less than $200 a month to live a "nice" house -- no brainer - go for it.
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Re: Choosing between a better house or more savings
Old 10-13-2006, 09:52 PM   #13
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Re: Choosing between a better house or more savings

Yes take the house!
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Re: Choosing between a better house or more savings
Old 10-13-2006, 10:06 PM   #14
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Re: Choosing between a better house or more savings

Thanks for all the good replies to my question...the concensus seems to weigh in for getting the better house, which is also the way I was leaning In our price range 50k means maybe a few more sq ft, some wood floors vs all carpet, slightly bigger yard, all brick vs some siding, nicer kitchen, perhaps a better look and feel of the neighborhood, or the like. None of these things really change your life but as REW said, we spend a lot of time at home and small deficiencies do seem to grow more noticeable over time.

50k is a significant chunk but that SWR derived $2000/yr in spending won't change our recreation patterns that much, it's not like that would fly us to New Zealand for 2 weeks. As long as it doesn't gut the wine budget we'll be just fine



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Re: Choosing between a better house or more savings
Old 10-14-2006, 09:07 AM   #15
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Re: Choosing between a better house or more savings

From my perspective it will also depend on how much time you are going to be there. If you are going to be 90% there with an occasional vacation then the high cost house makes sense. If you were going to use it as a base for a high level of traveling, I'd encourage cheap and simple.

The other key issues is resale. "Cheap" houses are frequently that way for a reason. Unless your goal is to die in that house, resale is always a key consideration.
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Re: Choosing between a better house or more savings
Old 10-14-2006, 11:18 AM   #16
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Re: Choosing between a better house or more savings

My experience, after buying five houses and recently a townhome, is that I have never regretted buying a house that I would love but I have regretted buying a house that would be ok for the time being. I always wanted to move ASAP from the "OK" house, and ended up moving more often than I might have if I had stretched a little to buy a house I loved. But, of course, working within your means is important.

Having a home I love, where I feel comfortable, is a top priority for me. I wonder if women view this differently than men?
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Re: Choosing between a better house or more savings
Old 10-14-2006, 11:43 AM   #17
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Re: Choosing between a better house or more savings

Quote:
Originally Posted by Oldbabe
Having a home I love, where I feel comfortable, is a top priority for me. I wonder if women view this differently than men?
I don't think so, although the particular amenities may vary. For me, no shop, no garage, no yard = yuuuch. Others would have their own priorities of course.
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