Sounds like you love your house. Do you hate your job enough to give that up for two years work?
The current house has the features I want and enjoy, but about 1300 more square feet than I want. Do I love it? No. It's just a manufactured object. Yes, I hate my job enough to give up many things - especially the unneeded 1300sf - to gain back 2 years of my life. The question is how to avoid the risk of making yet another house trade in a few years. We've only owned the clown mansion 5 years, and moving is expensive. Problem is, the features I want are typically only found in high-cost big houses.
any chance of converting part of that large house into a rental?
Good thinking, but unfortunately no. The layout offers no practical way to separate bathrooms/bedrooms into a side apartment.
Doesn't sound like you're ready to make the change. Double garage, workshop and backyard? You're not really serious about downsizing at all, fancy kitchen too and family are!! Reread your own post and you'll see how ridiculous it all sounds.
All these things are routinely available in my market at an even lower cost than I'm paying. It's just rare to find them all in one place. Perhaps they are not available at all to non-executives in your market (?), but I'm talking flyover country. The complete house payment I'm complaining about is less than $1k/mo. That could easily be $600 post-downsize. It might take us 2 years to earn 25x that difference. Totally different economy.
Fifty percent less house means 50% less stuff. That's tough downsizing and downscaling project unless you and the DW value the freedom brought by a more compact life more valuable than the 2700 sqft mansion.
We've found that having a crap ton of space has not necessarily encouraged us to buy a bunch of stuff, but it has encouraged us to keep stuff we could have probably thrown away or donated. E.g. I have accumulated half a closet of stained or shabby clothes for use on household projects or cleaning. We were given an antique dining room set that we could just as easily give away again, but hey, that's the only thing in the formal dining room so why bother? One corner of a BR is occupied by a drawing table we picked up at a yard sale for $5, but never draw on. DW and I are on the same page. We'll have a disappointing yard sale. :)
Anyway, having interior space for stuff is not my primary interest. Functionality for daily life and post-FIRE hobbies and interests is. We could FIRE right now with an income of about $24k/year, but we'd not be happy with our outcome.
They've already asked this question a year ago
Yes, and responses derailed toward the budget rather than the specific question. I probably failed to state the question clearly and insist upon course corrections. I'll clarify now:
What is your recommended decision process to decide the right price point of house to sacrifice some years of life for? Not asking what is right for me; asking
what process do you use to design a lifestyle you've never experienced before?
If you go too minimalist to do the things you want to retire for, you might be less happy than you were when working and end up going back to work. I could FIRE right now to an RV, a rural mobile home, a slum, or a "developing" nation, but don't want to. Need is a relative term. It's a problem of knowing thyself. How can one be sure they've bought enough to be satisfied but not worked too much?
Also, a year ago DW wasn't on board with the dream to FIRE, but another year of demoralizing work, 12k in reduced annual spending, and 110k in growth has changed a lot. We're kicking ass, but trying to keep up with dusting the clown mansion isn't worth two years of our 40s. We're both finally ready to make a move. Now it's not an if question, but a how question.