I'm trying to decide when to pull the trigger to upgrade from starter home to dream home.
We have a 3BD/1.5BA Cape Cod. ~1700 SF plus unfinished basement. 1 stall garage in a cold climate (basically used for storage, not cars). Lived here a whoppin' 5 years, in Aug.
Is there a problem here that needs solving? Four people sharing a shower? Neighborhood quality? Schools quality? Work commute? What about waterproofing/finishing the downstairs with an additional bathroom-- would that make your current home more of a dream home? Refinancing with a construction loan can take care of a lot of infrastructure issues.
Dying to buy the right amount of land and build.
My perfect case scenario is to sell the city home for a 40k profit, find 40-80 acres, wooded or enough to block the wind. High and dry. Scenery: creek, woods, etc. Build a 2k-2.5k SF concrete-insulated-form abode. Double garage attached or ... larger, not attached.
Actually the best time to upgrade is when the whole neighborhood's home values have dropped by the same percentage. If you lose 20% on your $100K starter home then you've lost $20K. But the $150K upgrade home has lost $30K, so technically you just "saved" $10K on the purchase and on lower realtor commissions.
And although you'd be selling into a buyer's market, you'd also have that much more opportunity to find a foreclosure/short sale bargain. But you're looking at two closings, a move, and a pretty challenging mortgage application. With two small kids. And a day job. And assuming that you pull it all off, is there even the slightest possibility that work would transfer you or "encourage" you to relocate for career enhancement?
Our lot is a third of an acre, and we have more yardwork than we really care to tackle. I can't imagine the workload of caring for 40-80 acres.
How did you decide when to move from your "starter home" to something different?
Advice? Regrets?
You decide when you've spent years preparing for the day that opportunity smacks you upside the head.
When we bought our Hawaii home at the height of the 1980s real-estate bubble, a year later we found an even "better" place. It's a North Shore trophy property and we lost our minds. We were DINKs at the time and were seriously planning to sell the house we'd just bought, sink everything we had into the down payment, take out two mortgages, and rent out the basement. Even then we'd be facing an hour's commute each way to work and a "local" hardware store was a 45-minute trip. Oh, and we wouldn't be saving anything for retirement-- let alone for ER. Even with our beach-bum lifestyle, adding that mortgage to our budget would have sucked down both our paychecks. But it's a really really nice house.
We did a lousy job of predicting our futures. Two years later we were parents, working 70-hour weeks, and barely able to keep up with the minimum routine on a 25-minute commute. We had a lot of childcare expenses and our budget would've been under serious pressure. A couple years after that the Navy decided that we needed to do our jobs in San Diego. We would barely have survived any of these situations, and if we'd had that North Shore home then even 2-3 simultaneous occurrences would have put us over the financial edge.
Luckily (!) the North Shore deal fell apart and we lost our contract deposit (ouch). Best tuition payment ever. We finished fixing up our original home, dealt with work & parenting, and survived both the transfer to San Diego and the transfer back to Hawaii.
Beginning in 1998, as local real estate values sunk back to the 1980s, we started researching school districts and going to open houses at least twice a month. Over two years later spouse found "the house" and we knew within 10 minutes that we had to buy it. By then we were much more financially stable, our kid was much easier to parent, and we didn't expect any more Navy transfers. We knew the home-buying process better and, more importantly, we had our emotions under control. We also got a much better location for a lot less money than in 1990.
If you decide that your current home isn't worth fixing up, then you could prepare yourself for the unexpected home-buying opportunity by researching what you want in a dream home, and by going to open houses in the neighborhoods you'd want to live in.
I have no idea what to do with 40-80 acres, but I know I wouldn't be very happy with my property taxes!
