Author Topic: Downsizing home but not sure how far to go  (Read 3059 times)

brian313313

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Downsizing home but not sure how far to go
« on: June 09, 2016, 04:11:56 PM »
My wife lost her job about a year ago and our savings rate has plummeted. We've decided to go back to a more simple life but don't want to go too far and regret it. I'm looking for advice from people who may have faced a similar dilemma. I'm not looking for a specific recommendation of what to do since this is a lifestyle choice which is subjective. I feel that some discussion on the matter could be helpful in the decision process.

The current house is going up for sale, no question, no hesitation. We are absolutely sure about that. The issue is where to go... My wife says I can choose, as long as it's "cute". So no RV or mobile home. Also, we must buy and not rent. It's psychological rather than financial but those are the rules...

In some ways, I'd like to move into a 1BR condo in the city. This is pretty expensive but reduces the need to commute if I get another job. (I currently work from home but won't be here forever.) We will maintain a car to go hiking out of the city. On the flip side, I like doing projects and have several hobbies that require space. The truly ideal place would be a 1br with a basement & garage. That doesn't exist around here though. The projects push me towards a house. This ends up having a lot of space we don't need and will be an invitation to buy things to fill it. If I go for the condo, I will attempt to find alternative hobbies that don't require the space. However, if it doesn't work we could find ourselves moving in another year which really kills our current next egg.

Financially, the cost for a home in the suburbs is about the same as the 1BR condo as far as purchase price. Maintenance is offset by association fees somewhat, but heat will definitely be more in a house too. The biggest concern is really the unwanted space. We will have impulses and want to buy things, and space will not be a problem. I really want to retire soon. I'm getting too old for the high-stress jobs I have.

As if this isn't complicated enough, I've also thought of buying a small (cheap) country home about an hour out of the city. While working, I can rent something small (studio or room) for during the week or just stay in a hotel for a night or two. By choice, I work about 9.5 months/year as an IT contractor and telecommuting is becoming more of an option these days. Quite a few of my contractor buddies are finding more come in every other week or every third week jobs. If it could be counted on, this is a definite driver for being out of the city. It's still a home though with the extra space. There are small homes available in the country such as 2br/1ba that would be better sized to a couple and I can build an outbuilding for my hobbies. In the suburbs, all the homes that size are either in bad neighborhoods or have been torn down to build larger homes.

Thanks.

-Brian

lizzzi

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Re: Downsizing home but not sure how far to go
« Reply #1 on: June 09, 2016, 05:00:32 PM »
It sounds like whatever you decide, you are not going to be happy without some space (basement, garage, as you said) for your projects. And you may find it easier to find a house with at least two bedrooms, rather than one. You may need to buy a house that is a little bigger than ideal, but just not fill it up with "stuff." I can vouch for that being entirely possible. I have an 1100 sq. ft. two-bedroom, two-bath flat ranch with a full basement, two-car garage, attic, and large storage shed out back. The washer and dryer are in the basement, but other than that, I simply leave the basement, attic, and storage shed empty. I pretend that space simply doesn't exist. The two-car garage has my one car in it, and only the crucial necessities--the garbage can, the snow and leaf blowers, the snow shovels and a couple bags of salt, the out-of-season tires. The second bedroom is fitted out as a minimalist guest room/office, but is virtually never used. I kind of pretend it isn't there. The house is situated across the road from a large Metropark (see the thread about Youngstown, OH and the Mill Creek Metropark, lol)...I certainly don't need all this space, but this is a very LCOL area, and also I just could not pass up the location on the park.

Not sure I'm giving you useful input...just trying to help...those are my thoughts, anyway.

brian313313

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Re: Downsizing home but not sure how far to go
« Reply #2 on: June 09, 2016, 05:16:33 PM »
Thanks lizzzi, Your input is helpful. Sounds like you live in a great place. Living near green space is something important to me also since I'm an avid hiker. If we move downtown, I'll want to be within a mile of one of the parks so I can walk, run, and bike. As far as not filling it up, it's a matter of discipline. It sounds like you have more than we do. We're not bad, but over time things tend to accumulate. We can both give stuff up easily also but there's cost associated with that.

Goldielocks

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Re: Downsizing home but not sure how far to go
« Reply #3 on: June 09, 2016, 05:18:48 PM »
I would definitely rent for a year while looking to buy.  That year, you will figure out what is the right "size" for you, and you keep the employment location open for opportunities.   Why not rent that 1 Br downtown condo for a year, get tired of it / get it out of your system, then buy something?


If your plan is to really "buy" after a trial period, I think most spouses can get on board with that.

pbkmaine

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Re: Downsizing home but not sure how far to go
« Reply #4 on: June 09, 2016, 05:20:59 PM »
What about getting a climate-comtrolled storage unit and setting up your hobbies there?

MoonShadow

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Re: Downsizing home but not sure how far to go
« Reply #5 on: June 09, 2016, 05:29:59 PM »
For the projects, you could join a local makerspace.  If you live in a major metropolitan area, you could get a Zipcar membership to replace the car.  Othewise, a 2 bedroom condo could  provide the extra project space.

rufflina

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Re: Downsizing home but not sure how far to go
« Reply #6 on: June 09, 2016, 06:19:04 PM »
What size is your current house?

brian313313

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Re: Downsizing home but not sure how far to go
« Reply #7 on: June 09, 2016, 08:21:55 PM »
Good suggestions. My wife & I talked about renting as a "trial" and that seems to have more appeal than renting because we're not sure. We'll need to bounce the idea around more.

I've looked into climate controlled storage before, but I haven't been able to find one with electric hookups. One of my biggest hobbies requiring space is breeding aquarium fish. This requires electricity for the pumps and such. I've looked into using a generator but that's not practical. I'm not sure that makerspace would help with this either. I've never heard of it before but just looked it up briefly. I'll look into that more sometime though.

Our current house is 2700 sq ft. A lot of the space is used by things that are not needed in a condo...pool table, exercise equipment, extra bed for guests. We could fit into a smaller space without even getting rid of much (except the pool table). We still have a lot more "stuff" than we want.

Lmoot

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Re: Downsizing home but not sure how far to go
« Reply #8 on: June 09, 2016, 08:34:59 PM »
First narrow it down to what type of property you want. If you own a SFR, then yes you won't need to have space for a pool table and gym equipment....but be prepared to share those things with others, in a condo setting. Condo and SFR offer very different pros/cons and lifestyles. Downsizing could be psychologically challenging on its own (even if it's voluntary), so maybe choose a similar property but sized down for a smoother transition. No shame either in renting for a year to test it out.

undercover

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Re: Downsizing home but not sure how far to go
« Reply #9 on: June 10, 2016, 01:49:04 AM »
You should be very diligent in running the numbers on buying a condo vs renting one. Rarely will you come out ahead, and the headache from an HOA can often trump any psychological benefit you'll have from "owning". Not saying owning a condo is automatically a poor decision, just that it's not always a cut-and-dry decision like buying a house can be, obviously.

Lots of variables in your post - I'll echo others by saying it seems to me you'd be far better off renting for a bit to get your situation more figured out. You'll save money regardless by downsizing to a smaller rental. Hopefully you can negotiate to work remotely and buy in a cheaper area.

MoonShadow

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Re: Downsizing home but not sure how far to go
« Reply #10 on: June 10, 2016, 02:01:38 AM »
You should be very diligent in running the numbers on buying a condo vs renting one. Rarely will you come out ahead, and the headache from an HOA can often trump any psychological benefit you'll have from "owning". Not saying owning a condo is automatically a poor decision, just that it's not always a cut-and-dry decision like buying a house can be, obviously.

Lots of variables in your post - I'll echo others by saying it seems to me you'd be far better off renting for a bit to get your situation more figured out. You'll save money regardless by downsizing to a smaller rental. Hopefully you can negotiate to work remotely and buy in a cheaper area.

Well, about that.  Buying a house isn't like buying a new car, but more like buying a used one.  There are many expenses that come part & parcel to owning a home beyond the mortgage payment, insurance & utilities.  These expenses are often unexpected & can be quite expensive.  A condo, by design, is a more cost effective form of housing, most of the time.  If a condo is acceptable, it's probably going to be cheaper than owning a home in many ways, unless you actually need a house for some particular need.

Villanelle

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Re: Downsizing home but not sure how far to go
« Reply #11 on: June 10, 2016, 02:48:23 AM »
What about a 2 bed with basement and garage, and a roommate?  Not only would it be extra cash, but it would prevent you from filling up the extra space. 

undercover

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Re: Downsizing home but not sure how far to go
« Reply #12 on: June 10, 2016, 03:39:21 AM »
You should be very diligent in running the numbers on buying a condo vs renting one. Rarely will you come out ahead, and the headache from an HOA can often trump any psychological benefit you'll have from "owning". Not saying owning a condo is automatically a poor decision, just that it's not always a cut-and-dry decision like buying a house can be, obviously.

Lots of variables in your post - I'll echo others by saying it seems to me you'd be far better off renting for a bit to get your situation more figured out. You'll save money regardless by downsizing to a smaller rental. Hopefully you can negotiate to work remotely and buy in a cheaper area.

Well, about that.  Buying a house isn't like buying a new car, but more like buying a used one.  There are many expenses that come part & parcel to owning a home beyond the mortgage payment, insurance & utilities.  These expenses are often unexpected & can be quite expensive.  A condo, by design, is a more cost effective form of housing, most of the time.  If a condo is acceptable, it's probably going to be cheaper than owning a home in many ways, unless you actually need a house for some particular need.

I was comparing owning/renting a condo/apartment, not buying a home vs. a condo. Just saying that buying/renting a condo/apartment isn't always as black-and-white as buying/renting a home when you factor in an HOA. And like I said, OP states that part of his reasoning for owning is psychological, but dealing with an HOA can make you feel like you don't own anything. But really, none of it is black-and-white. Housing is a mythical beast.

But I agree - when executed perfectly, a condo, by design, should be a more efficient form of housing. Unfortunately, this is rarely the case. You have zero control over the HOA fee and how the association spends it. Not saying that you still wouldn't come out better owning the same size condo vs. owning a house, it's just that YOU control the costs when you don't have someone else telling you how to do things and who to get to do it. I'd personally rather just consider myself responsible for everything than argue with an HOA over who's responsible when things go wrong.

I've also just found in my personal experience that buying a condo was rarely a much better financial decision (or psychological, as mentioned above) than renting a similar unit. I can also say that in my area, condos really aren't any cheaper than houses in terms of purchase price and then you also have to hear your neighbors. Maintenance, as you mentioned, may be in the long run, but who knows. YMMV, as always. No right or wrong. Just bringing up things for OP to think about.

brian313313

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Re: Downsizing home but not sure how far to go
« Reply #13 on: June 10, 2016, 05:52:45 AM »
Reducing space isn't a problem. We never liked this much space. We bought it for the location and the quality of the finishes. HOAs on the other hand can be a problem I know from the past. I've never had a significant problem but the people on the board may use their position to make the community better for them instead of the whole.

It is becoming apparent that renting at the moment would probably be the better choice. There are some downsides though. One is that we have pets: one dog, two cats. The fees are pretty high for pets in most places. However, until we know how much we can reduce by it doesn't make sense to commit to a particular size. I'm ok with renting but my wife has only rented one time in her life and feels that there is some inherent failure when you need to rent. She seems to be coming more open to the idea though. The one time we rented was not a bad experience. The numbers do support buying in my area...IF you stay for a reasonable amount of time. We've only lived in our current place for a year so we're going to take a big hit financially. Even if we moved right back to where we were we'll add 2 years to RE.

I wish we could find a 2br with a basement/garage but we need to get pretty far out of the city before we can find that. I just did a search for strictly 2br with a basement in about 10 surrounding zip codes and there are 2 active listings. I left out townhomes. There would be plenty of those but that's not an option we're considering. We need to avoid stairs. Plus, a townhome is not appealing to either of us. It seems more like the worst of both worlds rather than the best.

jac941

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Re: Downsizing home but not sure how far to go
« Reply #14 on: June 10, 2016, 06:17:45 AM »
I just want to chime in and agree with others who recommend renting for a year or two and then deciding. A year in a 1 br condo in a central part of the city near the park will be enough to know if that lifestyle / size is for you. You'll also know if you miss your hobby.

You could consider renting out your current home while you try this out. That may help your wife accept renting since you'll still be owners.

HappyHoya

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Re: Downsizing home but not sure how far to go
« Reply #15 on: June 10, 2016, 06:34:19 AM »
Depending on what city you're in, living in a condo doesn't mean you have to give up your hobby. In my city, there are plenty of community spaces, whether public, rental, or membership, that provide spaces for people living in condos to do space-intensive hobbies, like woodworking, sewing, painting, etc. Around me, we have a woodworking business that is a store as well as a huge space where, after passing a safety test, you can work on a project, store it there in the meantime, and even get to use tools much fancier than I would have normally ever purchased. There are also non-profit groups of artists who arrange to use space in local libraries and rec centers, at a costs so reasonable it ends up being almost negligable per member. Depending on what your hobbies are and where you're looking to live, this might be a good option. I have more hobbies and "projects" than a lot of people I know, but I found that I don't really do these things every day except when I am working on the intense parts of a project where things have to be done on a particular schedule. It takes a little bit of work initially to find these spaces and comfortable there, but you adjust and find what works for you. 99% of people are very respectful of other hobbyist and will get the clue whether you want to work in quiet solitude or be social. Every once in a while someone will be overly enthusiastic and want to share some awesome advice with you when you'd rather they shut up, but I've actually gotten some useful tips that way, so it's not all bad. Perhaps you could even focus on finding a condo nearby a hub for whatever your favorite hobby is. In my city, this was much less expensive than having dedicated hobby space in my home.
« Last Edit: June 10, 2016, 06:37:05 AM by HappyHoya »