I'm finding myself in a bit of a pickle.
I live in a 3 bedroom 2 bath house (~1400 sq ft) which we purchased 2 years ago for about $110,000. It's in a great part of town, central to downtown, but on the "cheap" side of the tracks. We both love it. Our loan on that is $90,000 left, with a 13 year payoff schedule at a very favorable 3.375% APY.
Here's my problem:
My wife and I have a 1 year old son. 2 adult German Shepherds and an adult whippet. And two teenage daughters (14 & 12) who live with us approximately 42% of the time. Our son's nursery is presently a "sitting room" which is attached to our master bedroom. And neither of us feel it is appropriate for our son to live in a 10x10 room while my two daughters occupy the two other bedrooms at less than full time. And it's also not appropriate for his room to be attached to our master bedroom for much longer. So, we have the perfectly sized house for us, except when we have our girls. We both think he'll need to move out of the "nursery" in another year or so.
My wife and I are both frugal MMMers. And we've considered a number of cheaper options which frankly do not appeal to us:
1) Adding a bedroom to our house. (would make our house look frankensteinen). maybe 20-30k, with significant impact to our yard and appearance of house.
2) Dividing our masterbedroom into two smaller rooms and allowing daughters to live there while we moved to front of house. Wife and I would be in the larger front bedroom while son occupies smallest bedroom. But my wife doesn't love the idea of not having a master bathroom. And we just renovated our master bedroom due to flooding at a cost of ~15k. Leery of negatively affecting the master suite. But, we could do for about ~5k now and ~7k in the future when we would convert it back, but I'm pretty sure my wife would be angry all the time.
3) Buying a cheap RV and park it in the backyard. One of the girls could live in it. (terrible idea, but briefly considered).
4) make one of girls share a room with son. My eldest volunteered, but neither my wife or I believe a 16 year old sharing a room with a 2 year old is a great idea.
5) make girls share a room. But they don't like each other. And because of my divorce situation, we both strongly want them to "want" to come to our house. And making them share a room would be a huge negative for both of them. And if we want them to have a good experience in our house, then this would be sub optimal.
So, now we are considering the following:
1) Buying a bigger home. Maybe sub-200k.
2) Renting a bigger home. But we've got dogs. lots of them. And my oldest daughter has talked about going to college locally and living at home. So we'd need to rent bigger home for some period between 4 and 8ish years.
3) Rent out our present home. I've never been a landlord, know little about it. I've surveyed the local listings and think I can rent our house for $1200-$1300 a month. I would estimate we'd make $200 a month from renting it out.
4) Sell our present home. Could pocket ~$30k from it.
5) If we did option (3), then we'd have the option of moving back into it once one or both of the girls moved out. We both love our house, but understand it's not big enough presently. But a 4 bedroom house will be too big when it's just me, my wife, and our son. At that point, we could sell or rent out the bigger home as we desire.
6) Buy a vacant lot (~25-30k) now. I can liquidate some holdings and pay for it. Sit on it for 6 months and rebuild liquidity. And figure out how to build a 4 bedroom, ~1800 sq ft house for no more than $150k. Advantage: we'd secure a home site where we want to live. Build a nice home that fits us now. Either sell or rent out old home. And if we needed to downsize in future, we could sell or rent out this bigger new'ish home.
We can cover two mortgages easily. We net 8500 a month. Presently spending ~3500 a month. So, we have a positive monthly cash flow of about $5k a month in our present situation.
We could also afford to pay cash for a new home. Our present net worth in non-tax advantaged holdings is in the ~260k range. But I'm leery of loosing the liquidity of having that money available.
Any advice?? What would seasoned MMMers do in my situation?