Printable View
Quote:
Originally Posted by Jeffski
My $400,000 house is 2300 sq ft brick front no basement on 1/3 acre. 1200 sq foot town houses go for $200,000 and the older 820 Sq ft Split foyers go for $330,000. All of the houses are way over priced, but they keep selling.
The mansion I plan on buying will probably be a 2600 sq ft house with a basement on an acre.
The cost of living here is outrageous.
I strongly second Poconos' advice to talk to a couple of financial and legal professionals.
Renting out your primary residence and then selling it at a later date has significant tax consequences, depending on when you do it, especially since you say it has appreciated 100%. Even with the neighborhood and town going downhill, you may still have an "a s set" that's appreciated substantially whenever you do decide to sell.
Go talk to the pros.
Well, if you aren't in a big hurry you could try a little experiment. Figure our how much your new payment would be, with taxes and insurance. Then, when you make your current mortgage payment, put the additional amount aside in a separate savings account. Do that for a few months and see how comfortable you are with the higher amount. After three months, you'll either have some extra money toward a down payment, or a little extra savings.
One thing to consider though, is how much money will you end up spending on private school if you stay put? Whatever amount that is, would have to be factored into your planning if you want a real cost comparison of staying versus moving.
As far as not saving too much of that extra 5k a month, you know the saying..."People spend what they make." If you have more of your discretionary money already committed to something like a better house in a better neighborhood, or private school, that's just money you won't be blowing at the mall or on other more frivolous things. JMO, but the money I spend on my kids, always seems to give the best dividends. I don't think you could go wrong making some sacrifices to provide a better home and school environment for your kids.
Good luck with whatever you decide. BTW, what part of the country are you in? Here, south of Houston, a 300k+ home will get you into about a 3,000 sq ft home in some pretty nice neighborhoods with good schools, amenities, etc.
Quote:
Originally Posted by SeanB.
I am about 20 miles from Washington, DC.
I hope to capitalize on the high cost of housing in aout 12 years when I retire and move to a different area where I may be able to get a house for $200,000.
That is a good Idea to live like I am making the mortgage payment to see how it feels.
I agree with the idea of the advice of a REAL ESTATE ATTORNEY or a real estate investor that has done well.
My father and my father-in-law are both really successful real estate investors and my husband and I doubled our net worth last year in real estate (our primary residence), which is how we could afford the new pool.
Generally both my father and my father-in-law say - when the neighborhood is going down hill GET OUT BEFORE THE VALUE DECREASES! You may be on the late end - if you are already noticing that you have a lower %?? of appreciation than houses of comprible age/size in a close neighborhood.
Basically they look at the number of rentals - if there are a lot and the trend is increasing - that is bad; then look at the types of cars parked in driveways - if the trend is towards older cars and more cars that are just sitting - that is bad; then the third is the general upkeep of the neighborhood - if people generally let their yards go and they are not actively trying to improve their homes - that is bad. Not necessarily that there are more noisy teenagers in the area.
I think you should see someone who is familiar with the real estate market in your area to see what you can do - but right now you can sell real estate without tax burden (on the first $250K of profit) as long as it was your primary residence for 2 out of the last 5 years. So you could rent it for a couple of years and be OK. Then after that you have capital gains tax - which is currently fixed at 15%.
As far as private schools (I know I am going to catch hell for this....)- I am a bit biased - personally I believe that sending your children to government run schools is ALWAYS a bad decision - unless you are in an area where the government schools have some sort of competition for students and $$. Even then - government schools will teach your kids what the government wants them to know - just like if you sent your kid to a Catholic school - they would teach your kid what the Catholic Church wants them to know... I'd rather be in charge of my kids education.
My vote - get the new house - rent this house for a couple of years & no new cars for the next 5 years to off set the cost of sending your kids to private school.
BTW - Florida is booming too - you used to be able to buy a nice house for $200K - now the average is about $255K for like a 1500sq foot home. I live further from town - they run about $330K for 2500sq ft - no yard/no pool.
Guess things are really big in Texas :D
Come to our neighborhood.
I got my 2300 sq ft home for less then 150,000K, which my brother out in Fairfax, VA paid 300K on a condo, told me that our home would be 900K plus out there.
We dont have bad schools. The teachers were my son goes to school always seem to be top of education.
I don't see junk cars or rentals in the neighborhood. Also looks for homes that has a HOA (home owners ***ociation) this will help keep those old cars and raggy people out of here. I cannot say how many times I accidently left our garage door open overnight and not have had my tools, steaks in the freezer or BBQ pit stolen.
IMHO I don't think there is no house that is worth over 250K unless its Michael Jackson house.