Tell me not to buy a bigger house

[Kimo]

Count me in the group that says go for it!!

 

[CorporateSoldier]

Thanks for all the responses. We went to that open house today - really nice house and great garage space but the spouse didn't like the lot nor the street. We may just stay put for a while anyway. I keep getting stuck on the costs of the move itself: 6% realtor fee from selling my house, paying a moving company, new furniture and window treatments, etc, etc. All that really adds up.

 

[CorporateSoldier]

This reminds me to go clear out my 2 car garage to have room to park in it. more space = more junk. I wish I had a smaller house right now.. more time to travel.

Oh, and how can you make 300k+ and still be in debt? wow.

Not really in debt, just have a good interest rate on my mortgage. If I really wanted to, i could sell some stock I own and pay off the house next week.

 

[Brat]

Well, consider my suggestion of looking for a warehouse space to fix up. You could always lease it with tenant improvements paid by the lessor.

 

[CorporateSoldier]

Well, consider my suggestion of looking for a warehouse space to fix up. You could always lease it with tenant improvements paid by the lessor.

I have given that some thought. A buddy of mine has quite the collection of motorcycles. He rents a 2000 sq ft industrial space and uses it for storage and man cave.

 

[Ronnieboy]

I would do it differently, if I were to do it again.

Here is my story:

2008-2009 is here and I discuss with the wife that if we are ever going to move into our dream home now is the time to do it with all the foreclosures, prices of housing falling, etc.

Some background: we had 4 kids at home at that time, the oldest was 19 and the youngest 9. The house was one that we had built with a home builder that built full neighborhoods of 10-50 houses. We built in 1997 and it was about 2400sq ft, technically 5 bedrooms, 2 car garage on a oddly shaped 1/3 acre.

My wife and I looked for almost a year till we found our 'dream house'. It was a bank buy back and was having construction finished on it as we found it. Two perpendicular two car garages, with one of them extra large (you could fit 4 compact cars in it front to back), 3/4 of an acre lot, 3681 finished square foot and 3264 unfinished basement with theater room, vaulted ceilings, lots of windows, master walk in closet is as big as one of my kids room in the old house.

We rationalized it as we deserved it, it would be an investment when housing rebounded, we can finish the basement and rent it out back to one of the kids, lots of plans. We bought it in 2009 about $15k less than the second offer that came in on it (the bank had already accepted our offer).

Well here it is 2014, basement still unfinished, still haven't furnished one of the rooms, heating and A/C are horrible, more than double what I was used to (I knew they would go up but seeing a $700 electric bill in the summer is still mind boggling). The electric company probably thinks we are growing pot in the basement because they send us comparisons of nearby similar houses and we are easily double the kilowatt hours.

Oldest two kids are out of the house, 3rd kid is turning 18 in a few months and might also be out soon, youngest is starting 10th grade, not too many years left either. I now talk to my wife about downsizing, ramblers, not a lot of stairs, etc. I think 2000 sq ft main level and similar sized basement would be perfect. Maybe in about 10 years.

So would I do it over again if I know what I know now? No. I feel that my FIRE has suffered a little, we definitely didn't save as much as we were in the past after buying this behemoth. I'm not saying I wouldn't have moved, but not to such a large place with kiddies leaving the nest. Now I'm thinking how small we can downgrade so they don't come back

If I were in your position I would look for a similarly sized house on more acreage so you can have your own garage built the way you want it, maybe with a living space over the garage

I guess the good thing for us is that Zillow (the bible of home values, ha ha) has our house showing a $350k+ increase in value from when we bought it. Maybe it will be $500k+ by the time we sell and we can pay cash for the downsize (see it was an investment).

 

[CorporateSoldier]

Thanks Ronnieboy. Sounds very similar to my situation. I also kicked around the idea of buying the dream house when the market collapsed but didn't pull the trigger. Sounds like you may be in great shape long term.

The thought of a $700 electric bill is wild. My current house maxes out at around $350 in a hot summer month with the AC going every day. I thought that was painful! I think the house we looked at had two HVAC units, one downstairs, one upstairs.

Good thought on possibly buying a smaller house with some land. I actually like the idea of maybe a 2000-2500 square foot ranch instead on a few acres and then build a pole barn/workshop on the property.

 

[nokkieny]

Honestly, not sure how much longer you plan to work and what your financial situation is, but if you are making 250k and you are going to enjoy what the house has to offer and most importantly the location, then I say go for it. Assuming you plan to live there for many years. I personally would rather have a smaller house, while still in a good location. To keep costs and taxes down, but I would most likely not want to spend the majority of my time at the house.

 

[CaliforniaMan]

Keep in mind that, if you choose, while you can always later sell the larger house, that larger homes are much less liquid than smaller ones. I have two friends with large homes they would rather not have.

One built a very large, I would term mega-home he built when he sold his company and retired (after the financial crisis he had to go back to work). He recently told me that he would like to move into a more affordable home, but there are so many homes in his neighborhood on the market now. Everyone who did not have to sell during the financial crisis, and was waiting for house prices to rise, now have their homes on the market. And while low cost houses sell quickly, those in his area remain on the market for a long time.

Another friend with a large home, unexpectedly got laid off. Rather than proud of their expansive overly fancy digs, they seem to be a bit envious of their more frugal relatives that have smaller and paid off homes. They plan to sell eventually too. Where they will put all their furniture I don't know.

Maybe means you can get some really big homes cheap, but then again they are hard to move for a reason, that upkeep.

Just my two cents...

 

[aja8888]

Keep in mind that, if you choose, while you can always later sell the larger house, that larger homes are much less liquid than smaller ones. I have two friends with large homes they would rather not have.

One built a very large, I would term mega-home he built when he sold his company and retired (after the financial crisis he had to go back to work). He recently told me that he would like to move into a more affordable home, but there are so many homes in his neighborhood on the market now. Everyone who did not have to sell during the financial crisis, and was waiting for house prices to rise, now have their homes on the market. And while low cost houses sell quickly, those in his area remain on the market for a long time.

Another friend with a large home, unexpectedly got laid off. Rather than proud of their expansive overly fancy digs, they seem to be a bit envious of their more frugal relatives that have smaller and paid off homes. They plan to sell eventually too. Where they will put all their furniture I don't know.

Maybe means you can get some really big homes cheap, but then again they are hard to move for a reason, that upkeep.

Just my two cents...

Don't worry, when the housing bubble inflates again, there will be buyers for the mega homes and banks to lend money to anyone who wants it. This is America, remember?

 

[Sirka]

Rent a separate garage. You can work on your cars and hang out with your buds. Who needs a 4000 square foot house?

+1 and who needs more furniture

 

[pb4uski]

Do whatever makes you happiest. You're cognizant that you are trading a certain number of years of freedom (ie; retirement) for more space and more room for your hobbies, and that with more space there is increased risk of more stuff which exacerbates the trade-off.

As for me, I would live with less or rent a hobby garage.

 

[Brat]

If not rent or buy a hobby garage then buy a modest home where you can build a separate garage or outbuilding for your hobbies. Realize that the chance of recovering the cost of the outbuilding is small so don't put a lot of $ in its construction.

 

[imoldernu]

Now, I'm not a technical kind of person, butwhen we decided to retire @ 53, (with not quite enough money)... our first "home" was a park model trailer in a campground... Thats a 12' x 34' mobile home, (400sf) and an add a room (400sf). Not a decision to be made lightly. "Could we live in 800sf?" ...

Well of course... forced to, we could live in a tent. Coming down from a 2500sf home, though, presented a real question, so making the decision was done this way. Independently, DW and I challenged each other to keep track of how much of the 2500sf we actually lived in. With the kids gone, two bedrooms freed up (except to clean). Then, the lower level family room. Very nice, but we just didn't use it except for a few days a year... parties or guests. Add to that, the staircases, the hallways and the downstairs bath... and... independently, we came up with the fact that about 95% of the time, we lived in about 650 sf. This reasoning made the change economical, and in fact made life a bit more simple and easy.

As a side benefit, the lower cost allowed us to buy our second mfg home in Florida... living 6 months in each, for the next 15 years, before buying our current 1600sf home in a senior community. It was a win-win for us... The money we saved has kept us secure as we grow older.

One great side effect of living in the campground and the mfg home community... You learn that the clubhouse takes the place of the entertianment room, and the social life is much busier and more fun where people don't become ensconced in their private mansions.

Different stroke for different folks.

 

[CorporateSoldier]

We may have really lost our minds now - wife found another huge house with 2 car attached garage plus a separate 3.5 car garage and it's also lakefront. Way more money but living on a lake with a huge garage workshop is the absolute dream home. Only a couple of miles from where we live now. Looking at it tomorrow night. If we buy it, I will have to retire from this forum.

 

[mpeirce]

If we buy it, I will have to retire from this forum.

If you can afford it, all power to you.

Live frugally and skimp to get to that goal, SURE, then enjoy it!

 

[Kimo]

It is amazing actually how torn I am with his decision because I have made that exact decision at least twice, in both directions and I don't think I would change either decision.......

 

[Totoro]

I live alone in a 500 square feet apartment, before that about 1.200. Before that anything ranging from 350 up to 900. City life.

In terms of comfort I am a bit short of closet space, but other than that the square footage doesn't really matter. Stuff you own does tend to expand with more space i've found

I'd say go for the best location, and calculate how impactful it is for your financial plan. If you can live with that, go for it. Don't worry about the realtor fees and move the stuff yourself. Seeing all the things you actually own might motivate you to get rid of some of it

As for me, i'll probably never own a house unless a girlfriend insists. Too much of a concentration risk in terms of assets, bad liquidity and not so much attached to the "place of your own" idea.

Try this article, it sort of sums up my view
Why your house is a terrible investment
But hey, to each his own

 

[38Chevy454]

I am also a car hobby person, so I understand exactly the need for more garage. I have always said "in retirement give me a 3000 sq ft garage and a 1500 sq ft house" and I will be happy. I do not think you need the bigger house, but you do need bigger garage; and a 2 car attached with 2 car detached is no enough. So my recommendation is to buy a similar size house to what you have, but on a bigger property that you can build or already has a bigger shop garage. You have time and flexibility on your side, so start looking now and you should be able to find what you want.

BTW, my current house has 2 car attached garage and I built a 26x48 detached (1248 sq ft). I wish it was bigger, but that was my limits with setbacks. Believe me, you will fill up the 2 and 2 set-up you are looking at, so I recommend to get something bigger. Do it right the first time.

 

[Fishingmn]

Just a thought if you do spring for the big lake house - tell any Realtor that you'll do both houses with them if they agree to a large commission break on selling your current place - something like 4.5%. They will make a lot more on the buy anyway since it sounds like it will be 2x the selling transaction.

I'd do that and I'm a Realtor.

 

[Andre1969]

I'm guessing there's no feasible way you could build a separate garage on your property? What about a compromise...find a fairly modest house on a large lot, and have your own dream garage built?

I had a 24x40 garage built for around $30,000, although that was back in 2005/2006. It was post-and-beam construction, which is cheaper than stud walls. That cost also included a lot of grading, bringing in dirt, adding about 200 feet of gravel driveway, and running electricity from the house to the garage, a distance of about 175 feet.

**edit: I'll echo the sentiment about filling up a garage fast. Originally, I wanted to have a 30x40 garage built, with a gambrel roof second story. However, the county shot me down because it was too big, and too tall. One regulation is that no secondary structures could be larger than the primary. Well, 30x40 is 1200 square feet, and they have my house listed at 1106. It's really more like 1500, and I tried to argue that, but they said they wouldn't bite. I'm curious though, why they didn't count the square footage of the second level of that garage, which would have been another 1200 square feet.

Anyway, I got fed up, and just went with one of their basic stock sizes, and no attic. Well, today that 4 car garage barely fits three cars, and I have a lot of stuff balanced up in the roof trusses as well. In retrospect, I probably could have gone with a non-stock size that got me a bit closer to 1106 square feet, and maybe done an A-frame/Cape Cod style roof. But, hindsight is 20/20.

 

[Helena]

In the traditional sense, we can absolutely afford it. I have been making 300k+ the past few years and should at least make 200/250 a year for the next few years.

You want to retire when ?


Do the old sayings...

"don't count your chickens before they hatch " and "house poor"

... mean anything to you ?


.

 

[NW-Bound]

There is an open house today for a home in the next town. $500k house, 4,000 sq ft, newer construction, 2 acres, 2 car attached garage plus a 2 car separate garage. Also is close to a very nice downtown area and a park we love.

In the traditional sense, we can absolutely afford it. I have been making 300k+ the past few years and should at least make 200/250 a year for the next few years...

I don't know what to tell you. In California, $500K buys you a bitty and very old fixer-upper, and people do not make the money you do. Yet, they are buying houses like crazy all over again.

So, if it is just the house that you want, I do not see that as a big deal. But then, I am also one who owns two homes (but I am frugal in other ways, and fully retired).

 

[Helena]

This reminds me to go clear out my 2 car garage to have room to park in it. more space = more junk. I wish I had a smaller house right now.. more time to travel.

Oh, and how can you make 300k+ and still be in debt? wow.

Just like more space equals more stuff.

More income equals buying more stuff on credit.


.

 

[Options]

What seems like lifetimes ago, before I woke up as it were, I was very materialistic. Having found a more simplistic, elegant approach to life, I find I'm much happier. What I find particularly ironic is that while I live in a very "nice", trendy and chic area, this in fact makes me unhappy because it's all so shiny, happy, vacant, and synthetic. And I'm talking about the people, not the place. Moving in the not too distant future will change all that.

For now, I can definitely afford to spend more, to be less frugal, but why? Comfortable and satisfied now, what would spending more get me? More stuff? Materialism, whether it be "expensive" hobbies, houses, cars, neighborhoods, etc., can never replace an internally derived sense of satisfaction, IMO. As they say, your money or your life.