Author Topic: Down size a recently bought house  (Read 1321 times)

themagicman

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Down size a recently bought house
« on: August 25, 2015, 05:32:45 PM »
My wife and I bought a 4 bedroom 3 bath brand new house about a year and a half ago before we got serious about mustachianism. The house is much too big for us now (2500 sq ft) and will still be too big in our opinion when we do have the one kid that we are planning on in a few years. We are wanting to know if it would be smart for us to down size to a older 3 bed 2 bath 1100 sq ft house. We do not have any issue affording our current house (about 80% savings rate now) and we are about 7-8 years to FIRE. We are wanting to know if it would be worth it for us to sell our current house.

We could sell our current home for about 215k ( I expect our current house to appreciate at a higher rate then the house we are looking)
We could buy a much smaller home that is about 50 years older in a slightly worse area for 120k
The prop tax, utilities, and insurance would be about half
The smaller home is about 2 miles closer to work (current home is 5 miles away)
There is about a 75% chance we move out of state in 7-8 years when we FIRE

What does everyone think?

Frugal D

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Re: Down size a recently bought house
« Reply #1 on: August 25, 2015, 05:57:43 PM »
Damn, 2,500 sqft for $215k? That's awesome.

Can you rent out your current home and still purchase the smaller one? Then sell both when you FIRE.

MKinVA

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Re: Down size a recently bought house
« Reply #2 on: August 25, 2015, 06:06:40 PM »
I'm not sure I would be interested in moving to a slightly worse area. It's hard to project where you will be or want to be years down the road. Make sure you are moving to an area that will hold its value. And if you are having a kid some time down the road, I guess you should be looking for school district. Just try and find the best deal .

justajane

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Re: Down size a recently bought house
« Reply #3 on: August 25, 2015, 06:08:43 PM »
I'm torn on this one. On the one hand, you now know that this house is way bigger than you need. You will pay more in heating, cooling, and property taxes for the next 7-8 years. Plus, I'm guessing that you are in a seller's market like most of the rest of the country, so you might be able to benefit from this and somewhat offset your decision to sell so quickly.

On the other hand, if you are fairly certain that you are going to move post-FIRE, it just seems to silly to move twice, especially in light of your current savings rate. I'm tempted to suggest that you stay and then move once you FIRE.

Moving is expensive. Closing costs stink. Then you've got all the costs associated with moving. I personally wouldn't factor in moving three miles closer to your work. Some on here might disagree, but that's not a big enough difference to factor in.

I think whichever decision you make will be fine.

One thought: With a house that size, could you possibly rent a room on AirBnb? Are you in a desirable enough location for that? Any chance to make a it an income opportunity?