Author Topic: Move to my MIL's basement to time RE Market???  (Read 5471 times)

Deano

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Move to my MIL's basement to time RE Market???
« on: October 10, 2016, 10:01:04 AM »
So, my wife, a dedicated non-Mustachian, just came home and suggested that we sell our house and move into my MIL's basement. Her rationale is as follows;

1. our house will be very challenging to sell in anything but the ridiculous, over-heated southern Ontario RE Market we are in now (it is small, it has no parking, no real yard to speak of, semi-detached BUT it is a beautiful old Victorian in the best neighbourhood in the city). We could sell it in a day for a ridiculous premium over what we paid 6 years go. Houses in our price range in this area are selling in a day for over asking. It's insane. It would be nice to harvest the benefits of this market.

2. We can save heaps of money and then wait for a correction-buying a house that we're likely to stay in until FIRE. We would be saving an extra 2k a month, even with paying a decent rent to my MIL.

3. Our house is a long term time bomb of money issues-Calcite brick that is starting to go (common problem in this area), field stone foundation that has been spray foamed, high radon levels etc etc. I want out before those things kick our asses financially (5 years?)

4. It's a nice Canadian-type basement-luxurious by most standards.

5. We can still both walk to work-the same distance to work as our current house (800 meters!)

ISSUES
1. Cats. Small thing but we have 2, MIL has one. I have a tom, she has a tom. Yikes. Not a deal breaker, but a pain in the ass. We also have 2 small dogs and a kidlet. They're no issue, they hang at Nana's all of the time already.
2. Privacy. A year with my MIL as well. She's great and all but a year?
3. Timing the market? What if it's more than a year? 2? That's a possibility, the recent measures taken by the Shirtless One and his crew will deflate the market, no doubt, but no one knows the timing.
4. Would have to pay for some storage. We don't have a lot of stuff, but still a small expense? Not sure how much...


So, reaching out to you folks for your advice. We're a number of years from FIRE (7?), but this won't change things dramatically.

Thanks everyone, hoping you can weigh in!

nobody123

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Re: Move to my MIL's basement to time RE Market???
« Reply #1 on: October 10, 2016, 10:52:27 AM »
Has your MIL discussed this with you and your wife, or is it just an idea that your wife had?

1.  You can always sell a house, just lower the price until it goes.

2.  How long does your MIL want to stay in her house?  If she decides to move / cash in, would you want to be in the position of having to move right away?

3.  Every house requires maintenance.  If you see issues, potential buyers do as well and will factor it into their offers.

Issues:

2.  Lack of privacy would be a show-stopper for me.  I like my MIL, but a 3 day visit is about the length of my patience.  Unless you had a separate entrance and an agreement to stay out of each others spaces unless invited over, I'd be worried.

4.  Store what?  What are the odds that whatever furniture you have today will be what you want to put in your new place?  Just sell it all.

Mother Fussbudget

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Re: Move to my MIL's basement to time RE Market???
« Reply #2 on: October 10, 2016, 12:22:16 PM »
Timing the RE market is risky, but I would consider it in your situation for the points mentioned above.

One thing to consider:  what happens if this is *NOT* a RE market bubble, but becomes the 'new normal'?  As a thought exercise, consider the NYC and San Francisco RE markets.  They're both examples of extremely HCOL areas where home prices continue to go up, up, & up.  I sold a 3/1 starter home in Fremont, CA in 1995 for $320K that today is worth >$1M.  Would I have done anything different?  No.  Selling was the right thing to do so I could move to WA for work. 

Would I buy there today?  Doubtful.  I'd probably rent.  But I'm also interested in trying geographic arbitrage - living somewhere like Ecuador, Taiwan, or the Czech Republic, or Corfu....  hmmmm....  Corfu!  Living for a couple of months, and doing day-trips to explore the area.  All the while saving on normal expenses to stretch the FIRE stache for a couple more years.  GoCurryCracker is doing this, and is having a great life (IMHO). 

caracarn

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Re: Move to my MIL's basement to time RE Market???
« Reply #3 on: October 10, 2016, 12:36:22 PM »
For me the lack of my own space/privacy would be the biggest issue.  That feeling is different by individual, but not being able to just have time with my wife would be a problem.  I have no issues with my MIL but living with her long term would change that, and I think it would for almost anyone. 

Your upcoming repair issues will be an issue to sell as well.  Not sure ho it works in Canada but in the US certain things need to be disclosed and standard maintenance items like this will usually be known by a buyer and factored in to the price they expect to pay.  That's not to say you cannot still make money, but can it offset the negatives. 

I would just come back to the overall motives for this which are to save money for an unknown amount of time for an event that possibly will not happen with the market devaluing.  If you made a huge profit in 6 years, your current payments are already at that lower level, and so the market would need to drop back to that level again for you to be ahead from an affordability standpoint.  I understand that you have that extra cash from the appreciation but it may not help as much as you think.  You then add this in with the high likely downside that this lack of privacy will cause tension with your MIL (and then indirectly with your wife) and the upside vs. downside potential for this does not look good from my perspective.  If the decision was do we sell our house now or wait a bit to move in with our MIL but your intent no matter what was to permanently live with your MIL to cut housing expenses for everyone, the decision point is different.   Your goal is to have a home of your own.  You have that now.  To me this is a "grass is not always greener" decision and that means it's a no.

Deano

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Re: Move to my MIL's basement to time RE Market???
« Reply #4 on: October 10, 2016, 01:16:40 PM »
Thanks everyone for your input so far (hoping to get more thoughtful insight!).

A few things to round it out.

-we can easily afford to purchase now, but things get snapped up so quickly that we don't even have time to think about it. I'm quite confident that things will slow down by the spring/summer (my MAX time horizon to live with my MIL). Prices may not be down, but selection might be up and time lines won't be so ridiculous.

-to the poster who asked "what if this is a new normal". My city (large town really) is certainly not San Fran or NYC-I don't see prices continuing their appreciation here, though we are influenced somewhat by the Toronto market. It's a valid point however, and I think the one thing in our pocket is that our time would be less than a year at my MIL's.

-the issues with the house-most people won't even look at these things-I'm not kidding. Things get sold without inspections now. They are also not something most inspectors would talk about (ours didn't and they were issues then). They are things that may not need doing for several years and so tend to be pushed to the side. Again, valid point though, and perhaps things that make this house even more challenging to sell.

-the privacy. I'm a super relaxed person-not much gets me stressed. I think I would be ok to next summer, but I would negotiate an "out" clause with my wife, saying that if I can't deal (or she can't!) we will go rent something.

-we are moving from this house, one way or the other-the question is more how do we do it? Is it worth it to do things this way, or should we wait until there is more available for sale (almost nothing on the market right now-then snapped up immediately if there is)? If the market does cool (as I think everyone in Canada accepts now-even the Bull's), our house will be become even more challenging to sell, that is our fear. When we bought it had been on the market for quite a while, 2 different realtors, came off the market, went back on etc. I have people stopping to give me their business cards for private sales now...which makes it very tempting to do this.

Thanks everyone! Keep weighing in if you can!

Slee_stack

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Re: Move to my MIL's basement to time RE Market???
« Reply #5 on: October 10, 2016, 01:22:53 PM »
Hmm.  We've toyed with the similar idea of selling now while our local market is scorching.

No MIL basement to move into though....

VladTheImpaler

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Re: Move to my MIL's basement to time RE Market???
« Reply #6 on: October 10, 2016, 01:25:09 PM »
I knew a really nice couple that moved into the woman's parents house for 1 year to save money and get on their feet. Unfortunately, they ended up getting divorced.
True story.
I'm not trying to scare you, just sharing something that really saddened me when I heard about it.

frugaliknowit

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Re: Move to my MIL's basement to time RE Market???
« Reply #7 on: October 10, 2016, 01:27:07 PM »
Nope, wouldn't do it.


Too many things need to fall in place for your plan to work.  It's not soybeans, it's your home:).

monkeytree

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Re: Move to my MIL's basement to time RE Market???
« Reply #8 on: October 18, 2016, 01:34:07 PM »
If you were planning to sell your home anyway due to all your reasons above, would you have to move into your MIL's basement? Can you rent something else until the market dies down? I don't see anything wrong with trying out the MIL situation for a year, then depending on how things look after a year, either buy or rent somewhere else until things are more favorable.

redbird

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Re: Move to my MIL's basement to time RE Market???
« Reply #9 on: October 18, 2016, 01:51:17 PM »
I lived with my in-laws for 2 weeks a little over a year ago. DH and I just moved back from living overseas (Japan) and we were looking for a place to live in a state we'd never lived in before. My in-laws are AMAZING people. I like them a lot. They really enjoyed having us there (they don't see us much and they're getting older) and are always telling us we can stay with them again for any reason. But the stress of having less privacy than we were used to got to us. Their whole second floor is pretty much a guest suite, and is far away from their master bedroom, so that wasn't the problem. It was just living with other people and feeling like we had to interact with them x amount each day that was rough.

I would not be willing to live with my in-laws for a whole year (or more, if that housing situation doesn't work out for you!) no matter how much I like them.

I do think you should move though, especially taking that time-bomb of repairs issue into account. But maybe you should stay in that house you're in and start looking now.

Capsu78

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Re: Move to my MIL's basement to time RE Market???
« Reply #10 on: October 18, 2016, 02:03:50 PM »
I read this daily blog from Canada a few times a week and on more days then not the author gives all the justification you could ever want about why your home should be for sale last month:

  http://www.greaterfool.ca/

I have heard from some posters he is a fool, but I think a steep price correction is inevitable in your region of Canada.

BigHaus89

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Re: Move to my MIL's basement to time RE Market???
« Reply #11 on: October 18, 2016, 03:09:03 PM »
Sounds pretty logical to sell the house now(avoiding costly future repairs) and move in with MIL, at least for a short time. You can take advantage of the hot market and add a lot to your 'stash by saving on rent/mortgage. Keep a close eye on the market in the mean time.

Also, can you sell all your crap instead of storing it? 

Reynolds531

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Re: Move to my MIL's basement to time RE Market???
« Reply #12 on: October 18, 2016, 03:43:50 PM »
Depends on the city where you live. Kitchener and Waterloo yeah maybe they will correct with Toronto. London and Windsor I'm not sure ever really boomed and may not give back as much.

Can you move and pocket some cash? Like the boomers leaving Toronto?

MayDay

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Re: Move to my MIL's basement to time RE Market???
« Reply #13 on: October 19, 2016, 07:41:46 AM »
We sold our house and are now renting so we have time to slowly find the right house. A bit longer timeline than you- we'll probably rent for 2 years. But I don't think it's a bad plan if you planned to sell anyway. If living with mil is a pain, you can always rent.

I do agree though that I'd want a separate kitchen, and no forced together time-consuming basically treat it as a totally separate living situation.

Deano

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Re: Move to my MIL's basement to time RE Market???
« Reply #14 on: October 21, 2016, 07:06:58 PM »
Thanks everyone. The decision was to NOT live with the MIL. Just thinking that we don't want to feel pressured to move twice if it's not going well there. Rent is reasonable here-housing is not. We recently looked at a house that was listed at 55% over the price it sold for 2 years ago (with no work done on it). It sold for over asking in 48 hours, mult. offers.

This is crazy.

arebelspy

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Re: Move to my MIL's basement to time RE Market???
« Reply #15 on: October 23, 2016, 04:35:24 AM »
Just because it's crazy now doesn't mean it will necessarily fall in the future.

I wouldn't do a move like that to try and time the real estate market.  Moving in for other reasons, such as lower living expenses, and saving up, can make sense.  Timing issues less so, IMO.
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scottish

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Re: Move to my MIL's basement to time RE Market???
« Reply #16 on: October 23, 2016, 03:15:20 PM »
How diversified are your assets?   If the house is your *only* asset, that's a different story than if it's 20% of your net worth.

Deano

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Re: Move to my MIL's basement to time RE Market???
« Reply #17 on: November 07, 2016, 06:35:19 PM »
How diversified are your assets?   If the house is your *only* asset, that's a different story than if it's 20% of your net worth.

Funny you said 20% because that's roughly what it accounts for in our net worth. We have a decent and growing portfolio (ETF's for the most part) as well as DB pensions, the most solid in the country (though I'm considering commuting when I am done).

Deano

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Re: Move to my MIL's basement to time RE Market???
« Reply #18 on: November 07, 2016, 06:40:16 PM »
Just because it's crazy now doesn't mean it will necessarily fall in the future.

I wouldn't do a move like that to try and time the real estate market.  Moving in for other reasons, such as lower living expenses, and saving up, can make sense.  Timing issues less so, IMO.

I agree with you-but the issue is really about the ease at which we will sell our house (potentially) as opposed to the difficulty in a more balanced market (which is coming, crash or not-housing doesn't do this forever-the math proves it). Sell when it is easy, buy when it is easier-is that timing? Maybe, but maybe not the same as sell high/buy low.

We will have lower living expenses and we'll be able to shop around for a house without the pressure involved (no conditions, trying to sell our house quickly as a result etc).

Mother Fussbudget

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Re: Move to my MIL's basement to time RE Market???
« Reply #19 on: November 08, 2016, 09:37:21 AM »
In most markets, RE prices have seasonal ups and downs - generally up in the spring/summer, generally down in the late-fall/winter.  But all RE markets are different.  YMMV.  I have personally sold a house in the spring, rented for 6 months, then waited until just after the holidays to buy another place.  In my case, it worked, but it was only after researching my local housing market for several years to spot these trends.  And... I got very lucky.  The market could have just as easily gone against me (IMHO).

Mel70

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Re: Move to my MIL's basement to time RE Market???
« Reply #20 on: November 10, 2016, 09:09:13 AM »
If you sell, be prepared to stay in your MIL's basement for more than a year. Sometimes it takes many more for a RE correction.

Slee_stack

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Re: Move to my MIL's basement to time RE Market???
« Reply #21 on: November 10, 2016, 09:40:39 AM »
Just because it's crazy now doesn't mean it will necessarily fall in the future.

I wouldn't do a move like that to try and time the real estate market.  Moving in for other reasons, such as lower living expenses, and saving up, can make sense.  Timing issues less so, IMO.

I agree with you-but the issue is really about the ease at which we will sell our house (potentially) as opposed to the difficulty in a more balanced market (which is coming, crash or not-housing doesn't do this forever-the math proves it). Sell when it is easy, buy when it is easier-is that timing? Maybe, but maybe not the same as sell high/buy low.

We will have lower living expenses and we'll be able to shop around for a house without the pressure involved (no conditions, trying to sell our house quickly as a result etc).

If your goal is to sell easy and you don't want to live in your house anymore, go for it.

If your goal is to time the market, good luck.  If you enjoy gambling and can afford the loss, again, have at it.  Don't pretend its not gambling though.

ChpBstrd

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Re: Move to my MIL's basement to time RE Market???
« Reply #22 on: November 10, 2016, 10:23:15 AM »
1) You will almost certainly fail at timing a market crash.
2) Prices will eventually converge on fundamentals, such as salaries, replacement costs, interest rates, etc. So yes, as long as you're there, a huge chunk of your NW is at risk.
3) The market looks bubblicious.

Conclusion: The ideal move is to move to a cheaper city and invest the real estate windfall. This will work unless salaries are much, much lower. You got lucky holding an asset as a bubble inflates. You can either exploit that luck soon or eventually hold through the correction. A rent-to-own contract might offer some protection against further rapid appreciation, while also protecting against a crash.

SwordGuy

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Re: Move to my MIL's basement to time RE Market???
« Reply #23 on: November 10, 2016, 10:40:08 AM »
I would prefer to work until I die while still sitting in my windowless cubicle, with my clawed fingers clutching the keyboard rather than move into my MIL's or mother's home. 

Seriously.

I hope you have, and maintain, a better time than I would have in such circumstances.   

soccerluvof4

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Re: Move to my MIL's basement to time RE Market???
« Reply #24 on: November 10, 2016, 03:06:40 PM »
No way I would move in with my MIL.. good luck if you can do that.

Semi-Sarcasim...With all the Hollywood types that said they were moving to Canada if Trump wins the Market might of just got hotter!

Good luck on whatever your decision!

Deano

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Re: Move to my MIL's basement to time RE Market???
« Reply #25 on: November 11, 2016, 05:42:51 PM »
The house goes up for sale on Tuesday, if we get a decent price we'll sell and rent. I can't move to another city (my wife and I work in a highly specialized niche, the only place in the country to work in this niche is our city).

We are selling to get out of this house while we can. We may not time the market, but that alone is worth rolling the dice. I will keep this updated if anyone is interested in how things play out.

caracarn

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Re: Move to my MIL's basement to time RE Market???
« Reply #26 on: November 15, 2016, 08:44:36 AM »
I can't move to another city (my wife and I work in a highly specialized niche, the only place in the country to work in this niche is our city).


Do you examine alien remains from Area 51?  I'd be curious what work only exists in one city in the entire country. 

Fishindude

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Re: Move to my MIL's basement to time RE Market???
« Reply #27 on: November 15, 2016, 08:48:40 AM »
No way I would move in with my MIL.. good luck if you can do that.

This X 10

partgypsy

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Re: Move to my MIL's basement to time RE Market???
« Reply #28 on: November 15, 2016, 10:30:38 AM »
Sounds like you had other reasons than just timing the market to get out from the house. Good luck, let us know how the selling went! I don't mind my in-laws so that wouldn't be an issue for me. Sounds like you get along with them as well.

Deano

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Re: Move to my MIL's basement to time RE Market???
« Reply #29 on: November 16, 2016, 05:53:46 PM »
I can't move to another city (my wife and I work in a highly specialized niche, the only place in the country to work in this niche is our city).


Do you examine alien remains from Area 51?  I'd be curious what work only exists in one city in the entire country.

I could find other related work, but to do the job that I do, there is only one place in Canada. I am only interested in working at the place I do right now, for several more years anyway. Nothing to do with Aliens btw, though that would be a cool place to work.