Author Topic: Buy rural family home ahead of schedule for retirement? Or keep the cash?  (Read 8316 times)

Russelsage

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Hello,

I'm 35 years old.  Currently live in LA and work in entertainment.  A renter ($1400/month 1br, ugh but it's a great deal here sadly) and unmarried.

Income:
100-130k gross.  Varies by year, but in that range.

Investments:
100k in Vanguard IRA
265k in Taxable Vanguard Mutual Funds
20k Cash/Emergency Fund as you never know what can happen with entertainment biz

No Debt.

I currently save $1125 weekly split up into 3 separate taxable mutual funds as well as $5500 a year into whatever IRA type I am eligible for the year based on my AGI.

So total I save $64,000 a year.

This is the most I can save with my current income as after taxes I generally net around 85k, and yearly my living expenses are about 24k which is pretty good considering how insanely expensive LA is.  My plan was to continue working for 5-7 years, at 5 years I should have around 850k, if I really want to go nuts and work 7 I'd have a bit over a million.  I was then planning on most likely leaving LA unless some unknown opportunity came up that made it worthwhile for me to stay.

My question:
Recently my grandmother's old house in the Adirondacks in Upstate New York (she passed a couple years ago) which she sold for 169k in 2010, is now being sold for 187k.  The new owner put on a new roof and poured a new concrete floor in the garage as well as a few cosmetic improvements inside.  It is a very fair asking price.

I always said I would love to buy this property back to retire in as it is on 18 acres and has deeded private lake rights, as well as being adjacent to my parents property, which they own about 30 acres.  I did not plan for it to come on the market so soon and I am wondering if I should buy it for the future.

The Adirondack area is slowly stating to blow up as it is so close to NYC, Montreal, Lake Placid, Burlington, etc.  An international airport is slowly developing, big tech and industry are taking advantage of dirt cheap commercial property, land is cheap and you cannot buy anything like it anywhere else in the world for any price, and to try to even get close would cost millions.  This particular property has lake access, but taxes are cheaper than normal for NY because the lakefront property has written into the deed that you cannot build on it, and it only a small section, but useable to walk down to the dock and launch a canoe, etc.  The winters are cold, but if I'm FIRE, I don't have to worry about shoveling out my car to get to work.

Basically if it was 5-10 years from now I feel like it would be a no brainer, but since I am still 5-7 years from my goal, and the future is unknown, I'm wondering if I should not purchase it.  I have 104k in my VWIAX fund I started in 2006 specifically earmarked as my "house fund", which I could put down and have a tiny 10yr mortgage which I could then finally have something to deduct on my taxes, or I could liquidate some more and just pay cash.  On the con side if I take out that much now my 5-7 years to a million will be extended, however on the pro side I would have the house that I want and could retire in.

My parents who live close would be willing to check up on it, but I certainly would not rely or burden them with being caretakers.

Anyway I just was hoping to get some other people's 2 cents on what they think I should do.  Access is difficult so it would not be ideal to be rented in the winter due to the long private road leading to the driveway.  I'm also not really interested in being a landlord and finding a reliable company to handle that type of thing may be difficult, as it is a very rural area.

Not wanting to be morbid, but when my parents pass, I could buy out my sister's part of the inheritance most likely at face value and then own 2 houses and about 50 acres in the gorgeous Adirondacks if I choose.

Or, I could do nothing, and just stay on my savings plan and be a millionaire at 42 and figure out what to do then as for all I know my situation and plans may be completely different, and again someday when my parents pass, buy out my sister and have my parents house with 30 acres which also has deeded lake rights to the same lake.  But I love my parents very much and wouldn't mind living close to them and think it may be enjoyable as I don't plan to have children so I would be close to family, and the rest of my family lives in NJ which is only 4 hours away.

Sorry if this was wordy just trying to get it all out.

Thanks for any tips!

-Shawn
« Last Edit: October 02, 2017, 11:01:53 PM by Russelsage »

oldladystache

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I know what I would do in your situation, but it probably wouldn't be a "wise" thing to do. I'd offer 160k for it and if I get it, great, I got a good deal. If they don't accept, that's ok too, I didn't really know if I should buy it. And if they counter offered, I'd maybe come up a thousand or so, but no more.

If it would be hard for you to rent it will also be hard for them to sell.

lbmustache

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Just a few questions before I make a recommendation:

1) What do you estimate your mortgage to be, compared to rent now*?

*I probably would not use all $100k as a downpayment, and keep some for maintenance, etc. With that said, have you factored upkeep/maintenance into all of this?

2) What do you estimate your income to be, compared to now?

lizzzi

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I'm being too emotional here, and that's no way to go into a house transaction. But I would go ahead and buy it. You seem to be able to afford it, and I think that in five years or so if you don't have it...if it's been purchased by someone else...you are going to feel bad. I'm a little prejudiced because I'm a New Yorker and love the Adirondacks...but it seems to me that your parents can check on it in the short term, and recommend people to plow the drive or whatever. Or you could hire a property manager if it becomes too much for your parents. Lots of people have places in the Adirondacks that they don't live in full time. Later on, if your parents are gone and you no longer want the house...or perhaps a future wife or girlfriend isn't interested...you could always sell it then. But if you don't buy it now, you may never have the chance.

justchecking

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Buy this property.  The regret of possibly not owning this will eat at you for a long time if the house never comes back up for sale.  You are saving not just for savings sake, but to make smart calculated decisions.  You get a great property at a fair price and you will not bat an eye financially.  Do it. 

Fire2028

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I am long time reader of the forum and I registered just to reply to your question.  Buy it!  My husband grew up in coastal Rhode Island and we also had plans to semi-retire to his home town.  A property came up for sale that was only a few doors down from his family home and at a good price.  This happened about 10 years earlier than we had planned on buying and we did make an offer but didn't try our best because we figured it just wasn't the right time and that something else may come along.  And we lost the contract to another buyer.   Five years later- nothing on the market in our price range and we doubt we will be able to buy a retirement home there.  Every situation is unique and my husband's home town is a seller's market generally but we often, often regret we didn't give it our 110%.  I think we've been priced out.

Dicey

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I'll cautiously vote for buying it, but I'd advise strongly against putting so much down. Get a bigger mortgage and keep the extra invested so it can continue to grow. Pay it off when you get to FIRE, if you want. Since you're never going to sell it, keep your money working for you.

I'd also look for other creative options:
- Would your parents consider holding all or part the mortgage?
- Might you imply that you were going to move into it and buy it as a primary home? I know that's a very gray area, but lenders have rules to make sure their loans get repaid and that's what you'd do, right?
- Perhaps less gray is buying it as a second home. (We had a lender insist we characterize an intended rental property as a "second" home, even though we had no intention of living in it for a few years.)

P.S. I bought my retirement home in 2003, figuring I'd be priced out of the market when the time came to retire if I waited. In fact, it hasn't even kept up with inflation. Buying it for sentimental reasons makes much more sense, if that makes sense, lol.

Linea_Norway

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I'll cautiously vote for buying it, but I'd advise strongly against putting so much down. Get a bigger mortgage and keep the extra invested so it can continue to grow. Pay it off when you get to FIRE, if you want. Since you're never going to sell it, keep your money working for you.

I'd also look for other creative options:
- Would your parents consider holding all or part the mortgage?
- Might you imply that you were going to move into it and buy it as a primary home? I know that's a very gray area, but lenders have rules to make sure their loans get repaid and that's what you'd do, right?
- Perhaps less gray is buying it as a second home. (We had a lender insist we characterize an intended rental property as a "second" home, even though we had no intention of living in it for a few years.)

P.S. I bought my retirement home in 2003, figuring I'd be priced out of the market when the time came to retire if I waited. In fact, it hasn't even kept up with inflation. Buying it for sentimental reasons makes much more sense, if that makes sense, lol.

I was also thinking in this direction. Do your parents want to join in buying the house? Maybe with the option for you to buy back their half for the same price later (if that is legally possible). This also gives them a responsibility as a landlord and maybe they wouldn't feel bad doing some more looking after the house.

The thing you'll need to consider is whether your parent would stay in the same region if they get old and need case. But if would probably be a good thing for them if you could live in the house beside them and be FIREd. But if you expect them to move to a more central location, would you still like to live in that place if your parents wouldn't live there?

former player

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Less than 2 year's income, less than three year's savings.  It is, obviously, affordable for you.  And if you are going to buy property I would say a much better bet for you than something in LA.

Which are you going to regret the least, buying it or not buying it?  What do your parents say?

The thing which would give me most pause is the maintenance issue.  Houses deteriorate quickly if not maintained, which usually means being lived in or looked after by someone on the spot who cares.  I'd also seriously consider how much work the 18 acres need: your timeline to retirement is already long enough for the outside to turn into a jungle if not maintained.  The ideal of course would be a great tenant who would do the maintenance, but if not then you need to be prepared to spend what spare time you have on maintenance or to be lucky to find someone local who can do it reliably and not expensively.

I did buy a "unique" property for retirement 8 years before I FIREd.  It worked out well for me in a land of rising house prices, in a place I could spend long weekends and holidays and where I had elderly relatives wanting companionship and eventually needing care living close when I did FIRE and where I am now planning to spend the rest of my days.  So your proposition worked out well for me and my views are probably somewhat biased.


Askel

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Financially, I'd say you're fine. Do it if you want. 

But man, your timelines usually start at the five year mark. Well, I'm 40, and looking back at 35- I had no idea what was in store for me back then. The future I envisioned then and now are pretty different. 

So I'd keep a solid exit strategy if you need to unload this thing.

pbkmaine

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #10 on: October 02, 2017, 07:10:46 AM »
1) Are your parents willing to keep an eye on it for you? 2) Could you rent it  out until you retire?

frugaliknowit

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #11 on: October 02, 2017, 09:17:58 AM »
Taking emotion out of the picture:

NO.  Buying property you are not going to live in NOW for possible future use is not smart financially.  Why do you want to tie up capital in this?  When you are ready to retire there, THEN buy, or rent until you find the right property.

This:  Or, I could do nothing, and just stay on my savings plan and be a millionaire at 42 and figure out what to do then...
"There ya go!" 


lizzzi

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #12 on: October 02, 2017, 06:23:12 PM »
It's kind of a judgement call. We can all throw in our two cents worth, but the OP is really the only one who can make this decision. When I've been faced with these kinds of decisions--where there's no real hit-you-in-the-face correct answer, I'll usually take a long walk in the woods alone...or maybe get away somewhere for a day or two and consciously not think about the decision...and then come back, or come out of the woods...and I usually have my answer.  It just appears out of the ozone layer or something. A little woo-woo, but it works.

jodelino

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #13 on: October 02, 2017, 06:55:53 PM »
Buy it. I'm writing these words from a rural waterfront cabin in the north Atlantic region that my husband and I built on land we bought 12 years before my retirement (he's still self-employed on a reduced schedule, working remotely). We pounced on a gorgeous piece of land and congratulate ourselves every day.

Once you own it, you might well be able to find a great tenant who can do maintenance, particularly if you are more interested in the best possible tenant than in the top possible rental dollar.

Should you change your mind, you can always put the property back on the market, but you are not likely to get this buying opportunity back...


Russelsage

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #14 on: October 02, 2017, 09:57:29 PM »
Just a few questions before I make a recommendation:

1) What do you estimate your mortgage to be, compared to rent now*?

*I probably would not use all $100k as a downpayment, and keep some for maintenance, etc. With that said, have you factored upkeep/maintenance into all of this?

2) What do you estimate your income to be, compared to now?

Hello, thanks for your reply.

Right now I pay $1400/month rent for a 1 bedroom (shoot me, sadly its a great deal here!).  Standard 20% down 30yr loan it would be about $1150/month, however I would not be leaving my apartment yet if buying the house, I have to stay here to keep making the kind of money I make, that's kind of the dilemma, buying the house would put FIRE further in the distance, but I would then have a house and property for when that day comes.  I could lower the monthly buy putting more down, but I feel like I would do a shorter loan to save money on interest if that was the case, or just pay cash.  So basically I would be paying for the house while renting my apartment, the house would be for future use.

When I leave LA, my estimated income will only be what I make off my 1 million or so saved, plus whatever part time work I end up finding if I choose to do something, the idea is to be retired MMM style.

Russelsage

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #15 on: October 02, 2017, 10:04:10 PM »
I'll cautiously vote for buying it, but I'd advise strongly against putting so much down. Get a bigger mortgage and keep the extra invested so it can continue to grow. Pay it off when you get to FIRE, if you want. Since you're never going to sell it, keep your money working for you.

I'd also look for other creative options:
- Would your parents consider holding all or part the mortgage?
- Might you imply that you were going to move into it and buy it as a primary home? I know that's a very gray area, but lenders have rules to make sure their loans get repaid and that's what you'd do, right?
- Perhaps less gray is buying it as a second home. (We had a lender insist we characterize an intended rental property as a "second" home, even though we had no intention of living in it for a few years.)

P.S. I bought my retirement home in 2003, figuring I'd be priced out of the market when the time came to retire if I waited. In fact, it hasn't even kept up with inflation. Buying it for sentimental reasons makes much more sense, if that makes sense, lol.

Thanks again all for the replies, I'm trying to go through and answer questions via each post...on a side note, they already lowered the asking price by 4k as of today, it has been on the market about two months.  This will most likely not be a high demand house, as its not "lake front" in the traditional sense, so it is kind of unique property as you really have to love the woods to live there, and it isn't going to be easy to live there in the winter if there's a lot of snow, so it would be difficult for say a family to live there year round and send kids to school, get to work timely, etc.

Anyway on to your questions in this post:

My parents were actually offered the house and property for free from my Grandmother, they declined because they did not want to start family drama as my mother has two sisters, and one already isn't talking to them due to money issues...also my father did not want to have to take care of another house and property.

So they would not be interested in holding the mortgage, my mother agrees it is kind of a shame to buy the property when it could have been for free, but we both understand that nothing is really free.  Having said that, knowing them, I'm sure they would help out here and there, but I would not want or expect them to financially, although they may a bit regardless, but not expecting anything significant.

I currently rent, and could never afford a house in SoCal unless I want to work forever and live in a 800k 600sqft crap shack, so it would be my only home, unless some other massive money making opportunity comes up or life change.  I have an 800+ credit score, no debt, and enough assets to buy the house cash so I'm assuming that I could get a loan if I wanted to go that route.

Russelsage

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #16 on: October 02, 2017, 10:12:45 PM »
I'll cautiously vote for buying it, but I'd advise strongly against putting so much down. Get a bigger mortgage and keep the extra invested so it can continue to grow. Pay it off when you get to FIRE, if you want. Since you're never going to sell it, keep your money working for you.

I'd also look for other creative options:
- Would your parents consider holding all or part the mortgage?
- Might you imply that you were going to move into it and buy it as a primary home? I know that's a very gray area, but lenders have rules to make sure their loans get repaid and that's what you'd do, right?
- Perhaps less gray is buying it as a second home. (We had a lender insist we characterize an intended rental property as a "second" home, even though we had no intention of living in it for a few years.)

P.S. I bought my retirement home in 2003, figuring I'd be priced out of the market when the time came to retire if I waited. In fact, it hasn't even kept up with inflation. Buying it for sentimental reasons makes much more sense, if that makes sense, lol.

I was also thinking in this direction. Do your parents want to join in buying the house? Maybe with the option for you to buy back their half for the same price later (if that is legally possible). This also gives them a responsibility as a landlord and maybe they wouldn't feel bad doing some more looking after the house.

The thing you'll need to consider is whether your parent would stay in the same region if they get old and need case. But if would probably be a good thing for them if you could live in the house beside them and be FIREd. But if you expect them to move to a more central location, would you still like to live in that place if your parents wouldn't live there?

Thanks for taking the time to answer....

I mentioned in my post above about my parents could of had the house and property for free, and declined to avoid family problems and not wanting the burden of two properties as they have no need for two, so that probably also partly answers that question.  So they really aren't going to be interested in going in on it with me, it really is a totally up to me kind of decision.  My father kind of doesn't know why I would want it, but living there the majority of his life I think he is a bit disconnected as to how amazing it is what you can get for the price, after living in LA you really see how beautiful nature is.  And after looking for houses here, it's just insane.  To try to find anything close to what they have here would be 50 million.

My parents love where they live, they had talked about getting a second home somewhere warmer previously, even maybe Hawaii, but in the 15 years that have passed since that idea, prices have just gone through the roof everywhere and since where they live house prices are low, they wouldn't be able to sell their house for enough to really trade it for anything remotely as nice.  So who knows for sure but I have a feeling they'll be there forever.  Even if they weren't, I told my parents if they ever were going to sell their house I would buy it because it is absolutely amazing especially since my dad built it himself, it's insane how nice it is.

Russelsage

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #17 on: October 02, 2017, 10:22:02 PM »
Less than 2 year's income, less than three year's savings.  It is, obviously, affordable for you.  And if you are going to buy property I would say a much better bet for you than something in LA.

Which are you going to regret the least, buying it or not buying it?  What do your parents say?

The thing which would give me most pause is the maintenance issue.  Houses deteriorate quickly if not maintained, which usually means being lived in or looked after by someone on the spot who cares.  I'd also seriously consider how much work the 18 acres need: your timeline to retirement is already long enough for the outside to turn into a jungle if not maintained.  The ideal of course would be a great tenant who would do the maintenance, but if not then you need to be prepared to spend what spare time you have on maintenance or to be lucky to find someone local who can do it reliably and not expensively.

I did buy a "unique" property for retirement 8 years before I FIREd.  It worked out well for me in a land of rising house prices, in a place I could spend long weekends and holidays and where I had elderly relatives wanting companionship and eventually needing care living close when I did FIRE and where I am now planning to spend the rest of my days.  So your proposition worked out well for me and my views are probably somewhat biased.

Yeah I missed the boat on a house here in LA, I remember thinking how stupid it would be to buy a house for 400k in Van Nuys, now there's nothing under 800k that isn't a tear down, and nobody even wants to live in Van Nuys.  It sucks but it's too late nothing I can do.

It's hard to tell if I will regret it or not, because I still have some time to go here before I can actually retire, and my plan is once I hit the 5-7yr mark and have a mil or so in the bank, to try to take a few more chances in Hollywood just for kicks, ya never know and with the ability to not work, I can at least try, basically doing it the opposite as most people who move here.  I work in entertainment but my job is not a glamorous or exciting one, I'm pretty low on the list of credits you see flying by on the screen, but it pays well.  I just also see the writing on the wall and feel like the film business is running on the union fumes of the 50s and its only a matter of time before my job goes the way of the $50/hr Gm plant assembly line job, that's why I'm just packing it away as much as I can...but it's at a cost our work week is  60hours minimum, 6am-6:30pm every day and often work Saturdays and sometimes 7 days a week, often even more than 12 hour days 14-16 hours.  I've watched so many people here in their 50s and 60s killing themselves still working because they bought a house or expensive toys and now they're stuck here.  I'd rather bank and get out, but like I said once I hit my goal I may try a few more things, but maybe I'll just be ready to leave and relax.  Anyway sorry to ramble on there, but there really is no way for me to know if my future self will regret it or not which is why it is such a hard decision.

My parents do not want to influence me either way and only respond by telling me it is totally up to me as to what I want to do.  I think my Dad looks at it as a headache, I think my Mom secretly would love it.

Maintenance would be a pain, however the current owner did just put on a new roof, and my Grandmother traveled extensively when she was live and moved to an apartment in her later years (due to the difficult access in winter) so the house was unoccupied a lot of the time, the way it is set up is about as good as you could ask if it was vacant, but yes it would cost me some money to keep it going.  Sadly I think trying to keep it occupied would be more of a liability than just maintaining it.
« Last Edit: October 02, 2017, 10:44:57 PM by Russelsage »

Russelsage

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #18 on: October 02, 2017, 10:25:14 PM »
Financially, I'd say you're fine. Do it if you want. 

But man, your timelines usually start at the five year mark. Well, I'm 40, and looking back at 35- I had no idea what was in store for me back then. The future I envisioned then and now are pretty different. 

So I'd keep a solid exit strategy if you need to unload this thing.

You're exactly right, I was hoping this opportunity would come up 5-10 years from now, it still too early to tell, also once I hit my savings goal, I plan to try a few things around Hollywood before I say goodbye to this crazy town, not expecting anything to happen, but like you said, even just doing my current work in entertainment can always lead to bigger and better things, or just different things, so it is very difficult to decide as I really don't know what the future will hold. 

However if things just plod along as they are and I just keep saving and keep on trucking, if I decide to get the hell outta here it would be a fantastic place to live, it is really amazing, and one of the few places where you can have that much land without spending a fortune, but still be on one of the coast near civilization, and the rest of my family (I have no family on the west coast they all live in NY/NJ).

Thank you very much for taking the time to reply.
« Last Edit: October 02, 2017, 10:46:45 PM by Russelsage »

Russelsage

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #19 on: October 02, 2017, 10:28:40 PM »
1) Are your parents willing to keep an eye on it for you? 2) Could you rent it  out until you retire?

Thanks for writing back, they would certainly keep an eye on it for me, however I wouldn't want or expect them to deal with the headaches of a second house.  It was often a burden for my father as he was also kind of the "caretaker" when my Grandmother owned it just because my parents live so close.

Renting it out would be difficult, at least in the winter, the driveway is off a private road not maintained by the town, so they don't plow or do any upkeep, and it's a good 1/2 mile.  There are others who live below who do ploy it often, but if I was a landlord I'd really have to be on top of it.  Also the area is pretty economically depressed, so it would be hard to rent it to people who might actually care about the place, or be willing to spend a lot.  As a tourist rental, maybe a bit in the summer but again I'm not really interested in dealing with all that unless I could be almost 100% hands off, being a landlord doesn't interest me at all.

That is part of what makes it a unique property, you could technically live in it year round, but have fun getting your kids to school or to work after a snow storm!
« Last Edit: October 02, 2017, 10:48:29 PM by Russelsage »

Russelsage

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #20 on: October 02, 2017, 10:32:48 PM »
Taking emotion out of the picture:

NO.  Buying property you are not going to live in NOW for possible future use is not smart financially.  Why do you want to tie up capital in this?  When you are ready to retire there, THEN buy, or rent until you find the right property.

This:  Or, I could do nothing, and just stay on my savings plan and be a millionaire at 42 and figure out what to do then...
"There ya go!"

Thank you so much for writing this.  Sadly it's impossible for me to take out the emotion, but secretly I fear you are right, that is why I wish this had come along in 5-7 years.  I guess part of my fear is since I missed the boat here in Souther California, watching houses that I thought were stupid expensive at 500k now being priced for over a million, and so many other areas of the country the same thing is happening, Seattle, Portland, Montana, the Carolinas, I'm just afraid that in another decade everyone will have figured out what a great deal the Adirondacks is and won't be able to afford anything. 

Already in better known areas that are less than an hour drive house prices are 500k plus, other houses in the same area are on the market for 250-300k, and one for 760k.  It's just the fear that makes me thinking I better do it now or I'm going to have to spend 10x as much in 10 years.


Russelsage

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #21 on: October 02, 2017, 10:34:26 PM »
It's kind of a judgement call. We can all throw in our two cents worth, but the OP is really the only one who can make this decision. When I've been faced with these kinds of decisions--where there's no real hit-you-in-the-face correct answer, I'll usually take a long walk in the woods alone...or maybe get away somewhere for a day or two and consciously not think about the decision...and then come back, or come out of the woods...and I usually have my answer.  It just appears out of the ozone layer or something. A little woo-woo, but it works.

You are right, I analyze things to death, the hardest thing is this is one of those decisions where the "pros" and "cons" list are the same length!  Thank you for your response I really appreciate it.

Russelsage

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #22 on: October 02, 2017, 10:39:37 PM »
Buy it. I'm writing these words from a rural waterfront cabin in the north Atlantic region that my husband and I built on land we bought 12 years before my retirement (he's still self-employed on a reduced schedule, working remotely). We pounced on a gorgeous piece of land and congratulate ourselves every day.

Once you own it, you might well be able to find a great tenant who can do maintenance, particularly if you are more interested in the best possible tenant than in the top possible rental dollar.

Should you change your mind, you can always put the property back on the market, but you are not likely to get this buying opportunity back...

That is what I'm most afraid of, knowing the house and property since I was a child, I know EVERYTHING about it that Joe/Jane buyer won't see...it really is a paradise, you can ski/iceskate/hike/bike/swim/kayak/canoe right out your front door, it's a private lake, absolute silence at night, total darkness so you can see the stars.  It's just 5-7 years before I'm ready!

Renting it would be very difficult, the driveway is off an unmaintained road so winter would be a pain, also it would be difficult to find high end renters or families.  I also an not interested in being a landlord I think the anxiety of worry about that the people are doing in my house would be too much for me.

Thank you for sharing your story with me.

joonifloofeefloo

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #23 on: October 02, 2017, 10:40:16 PM »
Another poster projecting here...

I hope you buy it :)
It sounds lovely, and like the KIND of property I would like...and the connection to an ancestor would be a big deal to me, so wonderful.

I'm concerned it wouldn't come up again for 20-40 years, or ever. How much would that bum you out? Very little, or tragically?

This said, if the house I grew up in were for sale, I wouldn't buy it, because its maintenance costs have always been too crazy high, and the house isn't that suitable for roommates, etc. I do visit the new owners in it every decade, though. They are so kind and wonderful to me, and being able to visit is sufficient for me. (They're strongly considering selling, per said maintenance costs.)

Tough call, for sure!

joonifloofeefloo

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #24 on: October 02, 2017, 10:42:36 PM »
Yeah. If you're intent on buying it one day, I would buy it now, because this may be the only opportunity for it. In your entire lifetime. I believe you COULD get an excellent, caretaking renter in there, including in the winter (PICK ME! PICK ME!!). And if your life changes, you can sell. i.e., You can decide when to sell; you can't decide when to buy.

Russelsage

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #25 on: October 02, 2017, 10:54:58 PM »
Another poster projecting here...

I hope you buy it :)
It sounds lovely, and like the KIND of property I would like...and the connection to an ancestor would be a big deal to me, so wonderful.

I'm concerned it wouldn't come up again for 20-40 years, or ever. How much would that bum you out? Very little, or tragically?

This said, if the house I grew up in were for sale, I wouldn't buy it, because its maintenance costs have always been too crazy high, and the house isn't that suitable for roommates, etc. I do visit the new owners in it every decade, though. They are so kind and wonderful to me, and being able to visit is sufficient for me. (They're strongly considering selling, per said maintenance costs.)

Tough call, for sure!

Thank you, I really do want it, but I'm afraid because I still have a bit under a decade to go on the opposite side of the country it might be a mistake...however it could also be a great decision, one of those things where the pros and cons list are the same length, which really makes it tough as I'm a very analytical person so I want everything to be logical.

If I didn't get the house it wouldn't be the end of the world as it is just a house, but I also know that it is a great one, and a nice piece of property.  Also my Grandmother who owned the house, was a lifetime birder, her and my Grandfather traveled the world (literally, she had been to every country in the world, many of them more than once) and I will always remember her saying "I've been all over the world and there isn't any place as beautiful as this" so I feel like as someone who has been to like 3 countries I should listen to what she said!

I would probably have already bought it if my parents were more enthusiastic, but I think my parents may be afraid it will become their headache, or that I'll regret it as I live 3000 miles away at this point.

Thank you so much for your response, I'm very touched by how many people responded as I really have been struggling with what to do.

Russelsage

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #26 on: October 02, 2017, 10:58:17 PM »
Yeah. If you're intent on buying it one day, I would buy it now, because this may be the only opportunity for it. In your entire lifetime. I believe you COULD get an excellent, caretaking renter in there, including in the winter (PICK ME! PICK ME!!). And if your life changes, you can sell. i.e., You can decide when to sell; you can't decide when to buy.

Very true.  My Dad seems to think other places would be a better investment, but I keep trying to explain to him I'm not looking at it as an investment but as a place to live, I don't expect to be flipping it to make more money.  But again my parents have been living there for almost 40 years so it is tough to see it from my point of view.  I certainly didn't appreciate it as a kid, but now that I'm an adult and have been away for some time, I see it, and I also see what other options in the country and unless I want to work for the rest of my life they aren't a great option. 

It is just much sooner than I expected so I was hoping someone else would be maintaining it and then deciding to sell it at the perfect time for me, you know, just how like life never works out!

Thank you so much for writing.

Russelsage

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #27 on: October 02, 2017, 11:07:06 PM »
Also I forgot to mention, the guy selling it is leaving the furnishings with the house (he's from Texas, and his family just doesn't come to visit as often as he thought they would), some of which include ones that my Grandmother had sold with the house, nothing fancy, but basically it would be a furnished house as an extra bonus.  The price also just dropped 4k today.

joonifloofeefloo

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #28 on: October 02, 2017, 11:09:19 PM »
Quote
If I didn't get the house it wouldn't be the end of the world as it is just a house,

Hmmm... Then I might not buy it :)
I think if it was important to you to be connected to this specific property (ancestry, etc) that would be more of a draw.

But if it's just because you know it to be beautiful and wonderful, I start to waver.
There are a LOT of beautiful places on the planet to live. A lot. Many of those for sale at any given moment in time.

The property I grew up on was gorgeous, but the costs resulted in the land being chopped up and additional houses being stuffed onto it. So while the property I grew up on remains the most gorgeous I've ever known, reality meant that consecutive owners were compelled to chop it up, removing most of the best about it.

If you're not attached to an irreplaceable aspect of the property (grandma! childhood!), I would let it go, wait til you're ready for property, and then look anywhere and everywhere for the optimal fit (lifestyle, price, etc).

I've been casually looking for/at properties for a couple of years now, and have been delighted at how many lovely ones are out there. It turned out, the one I grew up on was not the only stunning one after all! And ultimately, it's most likely I'll buy in a cheaper part of the country than my current area.

Russelsage

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #29 on: October 02, 2017, 11:15:11 PM »
Quote
If I didn't get the house it wouldn't be the end of the world as it is just a house,

Hmmm... Then I might not buy it :)
I think if it was important to you to be connected to this specific property (ancestry, etc) that would be more of a draw.

But if it's just because you know it to be beautiful and wonderful, I start to waver.
There are a LOT of beautiful places on the planet to live. A lot. Many of those for sale at any given moment in time.

The property I grew up on was gorgeous, but the costs resulted in the land being chopped up and additional houses being stuffed onto it. So while the property I grew up on remains the most gorgeous I've ever known, reality meant that consecutive owners were compelled to chop it up, removing most of the best about it.

If you're not attached to an irreplaceable aspect of the property (grandma! childhood!), I would let it go, wait til you're ready for property, and then look anywhere and everywhere for the optimal fit (lifestyle, price, etc).

I've been casually looking for/at properties for a couple of years now, and have been delighted at how many lovely ones are out there. It turned out, the one I grew up on was not the only stunning one after all! And ultimately, it's most likely I'll buy in a cheaper part of the country than my current area.


Well I say that because if I didn't get it what am I going to do?  It would not be a life ending event, it is after all, just a house.  But unfortunately there is nothing else out there like this, the Adirondacks is the only place in the country that allows you to own private land in a national park, while there are other properties, to find something with this much acreage, deeded access to a private lake, and connected to an additional 30 acres that I would eventually inherit.  Also other properties do not have the lower tax situation that this one does.  Also the proximity to NYC, Montreal, Ottawa, Lake Placid, Burlington, etc is a very big plus to me.  ALL of my family is in NY/NJ.

I certainly love the family attachment to the house and it really means a lot to me, however I do not need a house to have those memories, to me that is just a bonus, that was my only point.  I really really appreciate your feedback, as you can tell I can't make up my mind and seem to be arguing for reason of why I should buy the house, but then the other part of my brain seems to think it's not a logical move.  Basically I'm venting in here I'm sorry!

joonifloofeefloo

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #30 on: October 02, 2017, 11:22:06 PM »
I think it's GREAT you're talking it all out here! This is one of the most helpful aspects of the forum -the sounding board aspect, so we can figure stuff out for ourselves, in part via our responses (emotional and vocal) to others' posts.

30 acres attached is a big deal.
Inside a national park is a big deal.
Being near your family is a big deal.

What would happen if you made an offer, had an inspection done, did a few walk-throughs...? Maybe a step in that process would solidify things for you one way or the other?

mxt0133

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #31 on: October 03, 2017, 12:37:44 AM »
Based on everything you said here are the things that seem most important to you:

  • Location, you know the place well and would like to live there in 5-7 years
  • The house itself is not what you are interested in just the location.  Basically any house with some acreage will do
  • The timing is not right, but there is no guarantee that the any place in the area will be available when you are ready
  • You are afraid that even if something is available when you are ready the prices would have skyrocketed by then
  • You want to potentially combine it with your parents place, when they pass

Based on those facts, any way you can ask your parents to let you build a guest house in their property when you are ready to FIRE?  That way you know you have a place to go too when you retire.  You potentially avoid a significant price increasing by offering to buy part of your parents property now, then buying out your sibling/s when your parent pass.




Linea_Norway

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #32 on: October 03, 2017, 02:21:47 AM »
You mention that the area has low property taxes. This is not a given fact in the future. I have learned that everything that you think will never change, can suddenly change. So keep that in mind.

I also still think you'll need to find a good caretaker renter, who wants to do some maintenance and cover your cost. This will help you to not set back your FIRE date.

About cleaning the snow. Where I live there is usually a farmer with a tractor that you can pay to clean the snow on your private road. This sum is usually divided by the house owners along the road. Isn't there anyone available in the area who offers this? Or could you get a caretaker who likes to to this himself? Some people love to drive tractor while they are not farmers.

pbkmaine

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #33 on: October 03, 2017, 03:50:08 AM »
Why don’t you make a low offer and then, if it’s accepted, get all the inspections done? There is some price at which it would be worth it for you to buy early, isn’t there?

Linea_Norway

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #34 on: October 03, 2017, 04:40:46 AM »
Why donít you make a low offer and then, if itís accepted, get all the inspections done? There is some price at which it would be worth it for you to buy early, isnít there?

Off-topic... Is this an American thing, first giving an offer and then doing an inspection? Can you draw back the offer that you made?
Where I live an offer is binding and you need to pay when it is accepted. You can therefore only give an offer at one house at the time (if you only can afford to buy one house).

chasesfish

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #35 on: October 03, 2017, 05:07:14 AM »
I'm leaning on the side of buying it.

Can you use a vacation rental property management company?  It'd cost you 25-35% instead of a normal rental, but furnish it and rent it out to vacationers for 6-8 months out of the year.  That would help generate some income.

It means something to you, it may not be the *best* move financially, but you're only on this earth once and you don't know if the property will come up again.  You'll be okay financially based on your habits either way.

pbkmaine

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #36 on: October 03, 2017, 05:45:12 AM »
Why don’t you make a low offer and then, if it’s accepted, get all the inspections done? There is some price at which it would be worth it for you to buy early, isn’t there?

Off-topic... Is this an American thing, first giving an offer and then doing an inspection? Can you draw back the offer that you made?
Where I live an offer is binding and you need to pay when it is accepted. You can therefore only give an offer at one house at the time (if you only can afford to buy one house).

Yes. The inspection gives you a way out, if there is anything significant on it.

undercover

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #37 on: October 03, 2017, 06:21:03 AM »
1. Never assume that you think you know something that millions of people don't already. I wouldn't count on the house being worth much more in the future (in other words - be prepared to hold on to it for a long time just in case). You're clearly not wanting to purchase as strictly an investment, but you seem to be somewhat justifying it as such. All I'm saying is never count on appreciation.

2. It's not technically a national park - it's a state owned preserve.

I wouldn't personally do it unless I was willing to set up a cleaner to take care of it as a vacation rental for me (or normal 12 month lease if it makes sense) in the interim between working and moving in.

It's a win-win if you're willing to rent it out - satisfies both the logical and emotional side of things. Of course that doesn't necessarily mean it will perform well as a rental and if you're willing to rent it out you should take that into consideration too.

While you have a decent sized savings and a good income (can clearly afford it), plopping down ~$35k plus ~$800/mo (taxes/insurance/maintenance/mortgage) for something you're not even going to use for years doesn't make sense.

joonifloofeefloo

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #38 on: October 03, 2017, 07:51:44 AM »
Off-topic... Is this an American thing, first giving an offer and then doing an inspection? Can you draw back the offer that you made?
Where I live an offer is binding and you need to pay when it is accepted. You can therefore only give an offer at one house at the time (if you only can afford to buy one house).

To add to pbkmaine's, this is also so in Canada, and as far as I know, the step required before you would get an inspection.

The offer is serious -it's saying "if there's nothing crazy, I will in fact buy it for this amount"- but then you get to do the "checking if there's anything crazy" steps (inspection, disclosure documents, etc). From these steps, the buyer and seller can negotiate price changes or repairs, or the buyer can back out completely (depending on the wording of the offer contract). The buyer pays hundreds for the (independent) inspection, so it serves as a good faith gesture too...and one we wouldn't want to make until we knew the offer was accepted.

Dee18

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #39 on: October 03, 2017, 08:02:35 AM »
You said it is unlikely to be rentable, due to difficult access.  A house that is not occupied can develop many problems...leaks, animals inside, even a break in.  You are all the way across the country. I think you might be creating a burden for your parents too.  In the next 5-7 years you may well find a partner who thinks living in the Adirondacks would be a nightmare.  If you want to live there in 5-7 years you will be able to buy a place. Or you may decide that you are no longer excited about that life either.  I think the timeline is too long to make it a wise purchase.   

Dicey

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #40 on: October 03, 2017, 09:56:05 AM »
I have more thoughts on the subject, but limited time allows me to focus on one point, for now. I did not mean for your parents to go in on it with you. I wonder specifically if they are in a position to act as the bank on this transaction.  If you're going to pay interest on a note on this property,  why not pay it to them? There aren't very many safe options that pay 5-ish percent these days. A traditional lender would not necessarily consider this a safe investment because of your lack of proximity. Your parents know you will never default on this home that you love. I'm thinking something on the lines of 50k-60k from them, and the balance you pay in cash.

I hope this clarification helps.  Also, are you an only child?

charis

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #41 on: October 03, 2017, 02:09:53 PM »
This does not sound like a great idea to me.  I am biased in the other direction because I am familiar the area and we have a family vacation home that could be described similarly (remote, wooded, unplowed and unrentable in the winter, far away, etc).   If my parents had a house next door, in your shoes, there is no way I would be considering buying the place.  First, way too much could change, including whether you can or want to live there year round (kids and a spouse, among other things, can change the game).  Second, you can go and visit your parents any time (I assume) without the headache of owning a property across the country and burdening your parents if something comes up. 

I would keep doing what you are doing, visit your parent's house, and befriend the new owners of your grandmother's old place, and let it go until you are ready.

FLBiker

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #42 on: October 03, 2017, 02:18:43 PM »
Personally, I think I'd pass.  As a homeowner, I have no interest in owning a home far away (from a maintenance POV).  And I also feel like being single and 5+ years away from FIRE things could change for you in a lot of ways.  If you're FIRE, you'll be able to find a cool house somewhere.

marielle

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #43 on: October 03, 2017, 02:46:40 PM »
Your parents have a 30 acre property, is there any option of building a house on part of that property? By splitting it and selling you a portion of it to you in the future?

trollwithamustache

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #44 on: October 03, 2017, 05:39:44 PM »
Are you hip to NY state taxes? That may be the only place in the nation that will tax you more than suny CA in retirement.

Also there are, full stop, no job in upstate that aren't low paying tourist services.

Neither of the above has to be a deal breaker.

Pigeon

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #45 on: October 03, 2017, 06:16:08 PM »

Also there are, full stop, no job in upstate that aren't low paying tourist services.


Hyperbole at its finest.

Dicey

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #46 on: October 03, 2017, 07:02:52 PM »
Okay, I'm back with a new thoughts. I grew up in CA, but my grandfather lived in Upstate NY. He owned "Grandpa's Motel & Cottages". There were a bunch of cute cottages, plus a cute motel, plus a nice looking two-story house, on a bunch of wooded acres, not far from a medium-sized racetrack. Family legend has it that Jackie Gleason used to stay there when he visited the track. Every building was painted white with black shutters and neat as a pin. It was smack in the rust belt and this was the late eighties. The whole shebang went on the market for about $100k. We California kids were mortified. "C'mon Mom & Dad, let's go buy it!"  said we. "Hell, no, there will be no jobs for you knuckleheads there" said they, and so the family enterprise was sold for a song. Eventually.

Additional tale: I used to work at Nordstrom. I sold expensive ties. Really expensive ties. $100 a pop, back in the nineties. I literally sold thousands of them over the course of a decade. It was easy to do, because they were beautiful (and people wore ties then). Even now, the thought of paying that much squicks me out, but back then, I was totally used to Nordstrom quality and prices. Didn't phase me in the least.

1 Tale + 1 Tale = Moral of the story: It's easy to get inured to the cost of things when everything around you is expensive, more expensive and obscenely expensive. The fact that the house hasn't sold means that they're asking too much for what it is. CA prices are a dangerous thing to anchor to vs. most of the rest of the country.

I'm totally okay with you buying the house for sentimental reasons, with a couple of caveats. 1.) Don't overpay by local standards. 2.) Understand that you will need to set aside big chunks of money for upkeep. 3.) Know that your free time will be spent there, trying to stay on top of the place. Wanna go to Europe, China, Australia? Sorry, your house needs you. 4.) There are other ways to get the feeling you're after. Buying your parent's place, for one. Erecting your own place on their property, as mentioned above, for another. 5.) I wish, I wish, I wish jooniFLORispoo could be your tenant. She and LF would be perfect. Hmmm...

lhamo

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #47 on: October 03, 2017, 07:22:33 PM »
I would be careful about assuming that retirement in a remote location -- no matter how beautiful and beloved -- is an option you will want to pursue later in life.  Rural life can be hard, and inconvenient.  It seems like your parents know this well but are kind of "trapped" there.   It worries me a bit that they aren't more enthusiastic about you buying your grandmother's place.   Have you discussed with them the possibility of buying THEIR house?  Would you want to? 

If you really want to return to the area, are there any possibilities for you to use your professional skills in NYC instead of LA?   Living costs are high, granted, but if you were spending many weekends upstate it might be easier to get a cheap share situation (maybe even sublet someone's pied a terre during the week...)

joonifloofeefloo

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #48 on: October 03, 2017, 07:30:05 PM »
5.) I wish, I wish, I wish jooniFLORispoo could be your tenant. She and LF would be perfect. Hmmm...

Dicey likes me as a tenant because she knows I clean under a stove every month...even after you've evicted me for no reason and been a total jerk in the process ;)

But Dicey, am I reading too fast??? I thought there was going to be one more element to your story. Like, either Grandpa's place compound shot up in value and your parents had foreseen poorly...or the new owners faced a series of disasters and your parents were right...  What happened in the end?? Or am I supposed to know that property in the rust belt is now worth two dollars? Or?

Russelsage

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Re: Buy rural family home ahead of schedule for retirement? Or keep the cash?
« Reply #49 on: October 03, 2017, 08:30:01 PM »
Based on everything you said here are the things that seem most important to you:

  • Location, you know the place well and would like to live there in 5-7 years
  • The house itself is not what you are interested in just the location.  Basically any house with some acreage will do
  • The timing is not right, but there is no guarantee that the any place in the area will be available when you are ready
  • You are afraid that even if something is available when you are ready the prices would have skyrocketed by then
  • You want to potentially combine it with your parents place, when they pass

Based on those facts, any way you can ask your parents to let you build a guest house in their property when you are ready to FIRE?  That way you know you have a place to go too when you retire.  You potentially avoid a significant price increasing by offering to buy part of your parents property now, then buying out your sibling/s when your parent pass.

Thanks for responding...my parents actually offered to sell me some land if I was interested, but I'm not really interested in building a guest house, and honestly the cost would probably be at least a third to a half of what it would cost just to buy this full size house with an additional 18 acres.  And I guess I have a little of the older mentality where families would add to their property in time.  To me even if the house fell down, I would like the land to add to what my parents already own.