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Old 01-24-2011, 05:30 PM   #41
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We demolished and are rebuilding our lake house in preparation for retirement. The lake house is around 1900 sf compared of 2700 sf in our current home (which we plan to sell). We are looking forward to smaller space (my DW less so - I tell her the problem is too much stuff rather than not enough space). One thing we are consciously trying to do is spend a bit more for better quality finishes given we will have less space and this will be our "last" house. I'd rather spend a bit more now than skimp some and end up doing numerous upgrade projects later.
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Old 01-24-2011, 05:35 PM   #42
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Ha will be along shortly to recommend you consider a kind-hearted hooker.
or ... kind-hearted looker?
or ... kinda hard hooker ?

I'll stop now.
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Old 01-24-2011, 05:36 PM   #43
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I own a small condo in a very large city, and I am very happy with it. No need for anything bigger even if I can afford it.
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Old 01-24-2011, 06:35 PM   #44
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Never really considered getting a "dream"house. Had dream cars and vacations for sure. Wouldn't make sense having 3 places. All 3 are great but very different. Almost by definition could not be the " dream" house, I think as we like to move around so much.
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Old 01-24-2011, 07:45 PM   #45
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The ex-dream house is pictured below. Oh, we still own it but are trying to sell it.

We bought it just over 4 years ago. At the time we had 6 people living in the house and it looked like a good bet my mother's health would deteriorate and she would need to reluctantly (on her part) live with us.

We were thinking of building, looking at houses and then this one came on the market.

It was perfect in many ways. It had large secondary bedrooms which was important to us. It had a little over 2 acres of land. It had no pet restrictions (important as we have dogs). It was beautiful to drive up to.

And -- best of all -- it had a newly built guest house.

It wasn't entirely perfect. I didn't really like the kitchen/dining room configuration and thought about some day remodeling. The utility room was large, but I would like it to be larger. It had two stories. However, the layout was such that DH and I would hardly ever have to go upstairs.

We bought it planning to never leave.

So...why sell it now?

Several reasons. It was totally manageable on our then income but is too expensive for our retired lifestyle unless we want to cut out things we don't want to cut. It wasn't just the mortgage but it very expensive to maintain.

But it isn't just the expense. Our needs and wants changed.

We now have 4 people living in the house. In 18 months, it will likely be 3 and in a few years it will be two. My mother's health rebounded and she is still living on her own.

And, we realized we don't really want to have to take care of an almost 4500 sf house. We do plan to build our "dream" house but that house will be about 2500 sf and one story. Even if the cost of buying/maintaining each house was the same we would still pick the smaller house at this point.
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Old 01-24-2011, 08:00 PM   #46
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A home is a necessity but seems to be a liability rather than an asset for it consumes the largest amount of money in most peoples lives. The ideal (dream) home is one that is practical, comfortable and fits like a glove but most importantly user friendly. The days of formal dinning and living rooms are fading fast and yes we have both in our main home but not in our newer second one. Downsizing is the way to go. Each generation defines what is important in terms of "things". Right now it seems to be electronics and as Dave Ramsey says "The paid off mortgage has taken the place of the BMW".
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Old 01-24-2011, 08:52 PM   #47
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My dream home - I may have spent too many summers at boy scout camp.

Tent Cabin Kit, Portable Housing Kits, Bungalows, Afforable Housing, Portable Structures, Yurts: Sweetwater Bungalows
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Old 01-25-2011, 07:01 AM   #48
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Katsmeow: Another reason why you would rather not have a mortgage on your dream house?
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Old 01-25-2011, 07:23 AM   #49
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Sort of like this Ha Ha?
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Wow, that looks like my first apartment! I really did have a motorcycle in the living room, a 650 cc Yamaha, but I didn't do doughnuts in there. It would have torn up the carpeting.
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Old 01-25-2011, 08:59 AM   #50
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Oh yeah. I like the cooler nearby in case you get thirsty doing wheelies.
I think the cooler had something to do with the activities in that photo...
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Old 01-25-2011, 10:12 AM   #51
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Wow, that looks like my first apartment! I really did have a motorcycle in the living room, a 650 cc Yamaha, but I didn't do doughnuts in there. It would have torn up the carpeting.
Yeah, but the carpeting makes it a lot comfier (and more absorbent) when you're doing oil changes...
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Old 01-25-2011, 04:48 PM   #52
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Furniture and home decor items are like used clothing...worth a small fraction (if anything at all) once purchased.
If you need any proof of this, just check a few garage sales.
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Old 01-25-2011, 05:40 PM   #53
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Katsmeow: Another reason why you would rather not have a mortgage on your dream house?
? Hmm, don't understand the question.

The main issue for us for the house we are building is whether to build for cash or build with a mortgage.

If we build for cash it will cost about $275k total but that is all in tax deferred accounts so would end up needing to take out about $400k to build for cash.

That said, if we take out money over the years to pay the mortgage we will be paying taxes on it although perhaps at a lower marginal rage (probably paying at 25% marginal rate while taking out at once we'll pay mostly at 33%).

And we would have some benefit from tax deduction but that is way more offset by the interest we would pay, even at low rates. But then we would be able to invest the $400k since we wouldn't be taking it all out to build the house...

There are other cons however to having to increase our income over the years particularly with people talking about possible means testing and such.

Really hard to decide if it is better to just build the house for cash and pay the taxes. Depending on timing this might save us some money if we could move from current house to new house seamlessly. Otherwise if we sell this house first then we have to find somewhere to rent in the meantime (or toying with buying an RV and living in it on the new property and then selling the RV once the house is built but not sure that is practical with 2 opposite gender teenagers at home).
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Old 01-26-2011, 09:55 AM   #54
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Yes my question was obtuse. You have obviously thought about the financials a lot. That is a beautiful house. Good luck.
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Old 01-26-2011, 01:13 PM   #55
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Yeah, but the carpeting makes it a lot comfier (and more absorbent) when you're doing oil changes...
Well, I was neat about it. There was a large piece of plywood under the bike and on top of the carpet to catch any oil drips.

Mom would be proud. I wasn't raised in a barn, you know.
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Old 02-03-2011, 09:34 PM   #56
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I think the recent (and continued) real estate depression and spate of foreclosures accompanied by high unemployment might make a lot of folks rethink "The American Dream". The last few decades saw people thinking of their homes as "an investment" and even a piggy bank. Back to basics, and needs vs. wants, might be the new norm going forward, at least for a decade or two.
But won't that mean that all the McMansions that have been built will be selling super cheap? A person with the cash to steal them could live high for low cost.
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Old 02-03-2011, 09:44 PM   #57
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A dream home may be a trap for the average (or average high income) American, but I would be surprised if it applied to the majority on this board. We seem to know what we want & aware of the work/FI trade-offs needed to get it.
I'd say that anyone here is at heart a big cheapskate. Really - it's the only way someone could make his way through our financially toxic culture to actually build up a nice nest egg before its time.
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Old 02-03-2011, 09:54 PM   #58
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I'd say that anyone here is at heart a big cheapskate. Really - it's the only way someone could make his way through our financially toxic culture to actually build up a nice nest egg before its time.
I'm not saying most of us aren't frugal, but your belief "anyone here is at heart a big cheapskate" is incorrect - as in dead wrong. Check out the threads on owning multiple homes, traveling to exotic places and buying all the latest tech toys. Doesn't sound cheap to me...
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Old 02-03-2011, 09:56 PM   #59
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Not only that, your priorities may change with very little advanced warning.

DW and I bought the land, designed and built our dream/retirement home eight years before I retired. We downsized slightly from 4 br/2,800 sf to 3 br/2,350 sf. The day we signed the papers to sell our house (we rented for a year while the new house was being built), DD#1 announced we were going to be grandparents for the first time. Before I retired she and her younger sister had upped the grandkid total to three and the total is now at five.

Since they all enjoy spending time at grandma and grandpa's house, that dream home 2,350 sf began to seem a little crowded. Our solution was to convert our 400 sf screened porch connecting the house and garage into a you kids go to the playroom before I do something I'll regret! second living area. Now we are back to the same size house we had before we downsized...
I've never really understood the idea of empty nesting downsizing. Sure, I understand moving out away from an expensive close-in neighborhood to one out in the sticks that cheaper, etc., but not a pure downsize just for the sake of downsizing. As REWahoo has mentioned, sure after Generation +1 moved out, there was no need for more room, but then came Generation +2. And in any case, it seems that the costs of moving (i.e., moving expenses and real estate commission, both in cash outlay, but also in time and pain in the a--) is big amount that would take a long time of saving a few bucks here and there in mortgage or opportunity cost, and taxes and utilities to make up.

I suppose that if a real radical downsizing were to take place, then it would make sense, but then the home would not be so inviting to Generation +2 (and Generation +1 even, if they were to move away.)
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Old 02-03-2011, 10:01 PM   #60
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I'd say that anyone here is at heart a big cheapskate. Really - it's the only way someone could make his way through our financially toxic culture to actually build up a nice nest egg before its time.
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I'm not saying most of us aren't frugal, but your belief "anyone here is at heart a big cheapskate" is incorrect - as in dead wrong. Check out the threads on owning multiple homes, traveling to exotic places and buying all the latest tech toys. Doesn't sound cheap to me...
Perhaps the common denominator is LBYM. After all, even the uber rich can spend more than they make, and end up broke...
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