Author Topic: Moving/housing dilema  (Read 4897 times)

Maigahane

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Moving/housing dilema
« on: June 05, 2014, 10:37:47 AM »
DH and & I live 30-35 miles from our jobs which are 6 miles apart. We really want to move closer. However we can't sell our house until we are moved out because of our dogs. We have two dogs 70-80lbs each and a cat. We've talked to a bank and even with our current mortgage we can get approved for another $1200/month mortgage payment. We've been aggressively paying off debt so we have very little in cash right now (~$2500) but have ~$30k in available credit plus a 401k we can borrow $12k from. We have some relatively minor repairs we need to do on our house before we sell it. We also have 3 out of state trips planned in the next two months so nothing will happen until then.

Here are our options as I see them:

1) Rent while we sell - Get everything done to our house that we can while we're there then move into an apartment, finish the repairs then sell. I've found ONE apartment complex that will let us have both dogs. We could probably sneak in the cat as well but he is a stray that would not do well as a strictly indoor cat. All said it would be about $900/month and 5-10 miles from our jobs.

2) Buy a new house now - Again, do what we can then after the summer trips buy a house. I would want it to be <$100k, which is plenty doable in our area but will mean it needs at least some fixing which DH & I honestly suck at. We would probably have to borrow money from a 401k until our current house sold to cover down payment and closing costs.

3) Stay in our house for another 6 months to a year then buy - By then we can have the actual down payment saved up plus a couple more small debts paid off (two student loans that total about $4800 and my credit card that due to recent dental work is up around $5k)

Extra details:
We owe about $10k less than our house is worth and thanks to a refi 2 years ago that is increasing by about $600/month.
We live in a small town that has a very slow market. An extreme example is a house two doors down that took 2.5 years to sell despite dropping from $150k to $120k. I would plan on it taking six months to sell ours once it's on the market.
One of our dogs in ancient and I don't really expect him to last the year. After he's gone there are a few apartment complexes we could move into that are cheaper but that's an unknown timeframe as he just keeps hanging on
We have no family nearby and no friends I would burden with an old dog that's starting to have accidents and a dog that sheds everywhere
We carpool in my car that gets almost 45mpgs so fuel only ends up being about $200/month
We don't plan to stay in this area in retirement which is hopefully <10 years away (trying for 7 years) so we don't need to love the house we buy

Typing this out I think I know what I want to do but am looking for input. What would you do in this situation?

Wolf_Stache

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Re: Moving/housing dilema
« Reply #1 on: June 05, 2014, 12:27:53 PM »
I guess I am not understanding why you can't put it on the market while you are still living there?

Another option is to buy the second house and rent out your first/original one.

Maigahane

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Re: Moving/housing dilema
« Reply #2 on: June 05, 2014, 12:36:39 PM »
The old dog (and a prior cat) destroyed the carpet in the living room and I don't want to replace it while he's still there since he's likely to damage the new carpet. Also, since the market is already bad  in this area I don't need people turning up their noses at the house because it smells like dog. With him starting to have accidents the smell is there even more than ever....

As for renting: I thought about it but the house is a bad rental. My mortgage is almost $1400/month (15 year loan) and at best I think I could get $1200/month renting it out.

frugaliknowit

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Re: Moving/housing dilema
« Reply #3 on: June 05, 2014, 01:14:56 PM »
I would either:

1.  Board the pets (maybe just the one that has accidents), make the house pristine (ditch the stinky carpet) and put it on the market while living in it.

or

2.  Wait for the old dog to pass, then make the house pristine and put it on the market while living in it.

All of the other options create too much uncertainty and potential negative cashflow.  They are too risky.

Maigahane

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Re: Moving/housing dilema
« Reply #4 on: June 05, 2014, 01:36:56 PM »
Boarding the old guy might just send him over the edge...he doesn't do well being separated from me for more than a day.

I've always been told that having animals at the house is a big turn off for potential home buyers. Even if they're not in the house when they look at it. Is that not really the case? If we didn't think it would seriously hurt our ability to sell it we would be fine with option 2 but we've even been told by realtors before that pets in the house is an issue for home buyers.

I'm not worried about going into negative cash flow. The monthly payments I'm looking at (which is less than the banks approved) we can afford with where we are now. It's certainly not something I'd want to keep up long term but I'm comfortable with it for a year or so. And if needed we can both scale back on retirement savings. And we both have very stable jobs

Gerard

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Re: Moving/housing dilema
« Reply #5 on: June 05, 2014, 01:48:18 PM »
I'm pretty sure I got my current house at a large discount in part because of the pet situation you describe (carpets, chewy incontinent older dog). My guess is, many other shoppers didn't even get past the doorway. Pet people seem to develop an amazing ability to "process out" how truly foul their house smells to other people.

Frugalknowit's option 2 seems like the most reasonable plan (assuming your old guy is not yet at the point where euthanasia might become a caring option).

MKinVA

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Re: Moving/housing dilema
« Reply #6 on: June 05, 2014, 01:51:29 PM »
Let's start over. Why do you feel you need to move now? Just to be closer to work? Is this lesser commute worth carrying two properties (especially given that your house won't sell quickly given the market in your area)? Is it worth moving to temporary housing (apartment)? Unless there is some necessity in moving, stay where you are, take care of the animals in their home, pay down debt, save for down payment, and when you get to that point, see where you are in terms of the animals and the house repairs.

DeepEllumStache

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Re: Moving/housing dilema
« Reply #7 on: June 05, 2014, 02:07:58 PM »
While normally option 1 would be good, it's rough with the situation you have with pets -
  • The pets might damage the apartment even in the short time you're there. More cost to fix/replace.
  • Instead of 1 move, it would then be 2 moves for the pets to get accustomed to.  If they don't take change well, it could cause issues.
   


Maigahane

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Re: Moving/housing dilema
« Reply #8 on: June 05, 2014, 02:16:54 PM »
Why move?:

To get rid of the almost 2 hours a day we are in the car
To be closer to other amenities. Grocery shopping is 20 miles away. I'm getting into roller derby which is 25 miles away. We've put 25k miles on my car in the last year car clowning plus what we've put on DH's
To downsize. Our house is 2400sqft, 3 bed (4th nonconforming), 2 bath for two people. It's pretty ridiculous and I'm kicking myself for it
To lower our housing costs. Not only would be be getting a smaller house we'd be getting a cheaper one. Adding in lower taxes (which are very high here despite our overall low COL) and lower utilities for the smaller house we can save a pretty significant amount of money by moving

Is temporary housing worth it? When I did the math that the apartment would be about $10k for a year I flat out decided that it was not

Re: Old man. He's not quite to the point of needing euthanasia but I'm being careful to make sure I'm not that person that holds out at the expense of his quality of life. It's going to be a very hard decision for me since I've had him since I was 14 but I don't want him to suffer because of it.

Maigahane

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Re: Moving/housing dilema - now a buy/build/rent question
« Reply #9 on: July 02, 2014, 11:10:03 AM »
Update:

My old dog took a turn for the worse a couple of weeks ago and he is no longer with us :(
So we are working on fixing up the house and hope to have it on the market by September (giving extra time since we will be out of state 14 days this month). Now we are trying to figure out the next step.

DH really wants to have a house built for some reason, keep in mind we're only planning on being here 7-10 more years, hopefully closer to 7. He wants to get with a builder and get a preliminary plan drawn up and see how much it would all cost. Talking last night we both threw out $150-160k max that we would be willing to pay grand total; land, house, appliances, permits, etc. We have no idea what what realistic costs are but that seems in line with what new houses are listed for sale at. But then I started doing the math....

Taxes here are 2% of the property value, interest rates are around 4%, PMI on a conventional mortgage is about .75%, and I took a stab at homeowners insurance based on what we pay now. Basically it came out that the portion of the monthly payment NOT going towards principal is .6% of the price of the house. So on a $160k house $960 per month is expense.

Looking around I've seen houses for sale that might be acceptable in the $80-130k range. With these we would probably have higher maintenance costs than with a brand new home.

Would you:

A) Build a brand new home for up to $160k that we will really like, will have very little to no maintenance on, but cost $960/month in taxes, interest, insurance, & PMI

B) Buy an existing home for $80-130k that we may not like as much, will have higher maintenance costs, but only cost $480-780/month in the above expenses

C) Rent for $650-950/month, have no maintenance costs but will probably deal with being sick of renting before our 7-10 years of living here are up

D) Other options?

No matter what we will stay within 10 miles of each of our jobs and will not be moving until our current house is sold now that the dog issue is much easier to deal with
« Last Edit: July 02, 2014, 11:13:45 AM by Maigahane »

mozar

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Re: Moving/housing dilema
« Reply #10 on: July 02, 2014, 04:30:50 PM »
I would rent because you can move as close to your jobs as you want, and you're planning on moving anyway.

Zamboni

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Re: Moving/housing dilema
« Reply #11 on: July 02, 2014, 04:57:42 PM »
Sorry to hear about your old guy!  My condolences.

Regarding the housing, if you are pretty sure you will be there 7-10 years and you can get something you can deal with for ~$100K and rents are $650 and up, then I say buy unless you can find a sweet renting gig, perhaps a small house with a yard that is for rent for the right price? (especially since you have the other two pets; moving is indeed a pain with pets) Corporate owned apt complexes have a habit of jacking up rent too much upon renewal and it ends up being cheaper in some areas to just move again when the lease is up and get the "move in special" at a new place.  I have friends have who moved every year for the past 5 years because of that. 

Building a house seems fun, but there are hidden expenses (I have built two.)  Beyond things like their recommended "upgrades" for cabinets, kitchen and bath hardware, carpets, counter tops, appliances, etc. - and trust me any model you look at is chalk full of those and does NOT cost the base price they are quoting you - there are things like landscaping plants/shrubs, window screens, blinds/curtains/shades, a shower rod, a stopper for the kitchen sink, shelving you decide you want to install in the closet or in the laundry area, and all kinds of other things you erroneously think will be included when they build the house, the list goes on and on.  "Used" houses often already have these things included.

Maigahane

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Re: Moving/housing dilema
« Reply #12 on: July 02, 2014, 05:21:56 PM »
Well, I think I got DH away from the idea of building here. I found a website for the builder that made a foreclosure we looked at a couple of months ago. That same floor plan is $110k, does not include the land ($30k) or finishing the basement. Plus I knew there would probably be a lot of stuff not included in the base price like permits, impact fees, decent appliances, hardwood floors, etc. So even that crappy house would easily jump above the $160k max we talked about.

Unfortunately houses in the $80-100k range are all older (read 1960's and before) so DH is very worried about the work we'd have to do. Our current house is a 1956 and while it was very livable on move in there is sooooooooo much I would do to it if we were to stay here that would probably involve sinking another $40-50k into at least.

As for area, we would have more options in houses close to our jobs than apartments. It's the older area of town so there's less apartments around there. But we have to be careful to make sure we're not too close to railroad tracks that are around there too. I keep seeing housing that look promising but end up being right next to tracks which we won't do. I just ruled out a cute brick house from 1947 that looked in decent shape because it's less than a block from them.

Zamboni

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Re: Moving/housing dilema
« Reply #13 on: July 02, 2014, 06:15:15 PM »
^Oh yes, of course, forgot about the land.  And the "lot premium" that you have to pay because the lot is "particularly desirable" according to the builder.  What, it isn't a swamp?

How much traffic is on the tracks?  If you are a couple of blocks away, you won't even hear it after a couple of days.

Thegoblinchief

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Re: Moving/housing dilema
« Reply #14 on: July 02, 2014, 07:43:53 PM »
I grew up three blocks from train tracks. Do you notice them sometimes? Sure, but honestly I found the occasional noise in the summer when the windows were open to be soothing.

Wolf_Stache

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Re: Moving/housing dilema
« Reply #15 on: July 02, 2014, 08:43:21 PM »
I grew up three blocks from train tracks. Do you notice them sometimes? Sure, but honestly I found the occasional noise in the summer when the windows were open to be soothing.

My current apartment is one block from the tracks. I've been here a month and its already background noise.

Maigahane

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Re: Moving/housing dilema
« Reply #16 on: July 08, 2014, 07:28:20 AM »
How much traffic is on the tracks?  If you are a couple of blocks away, you won't even hear it after a couple of days.
I don't know about those particular tracks but others around here are used a lot. Right now I live just under a mile from tracks and I do still hear them 6 years later. They don't really bother me but I doubt I could do very close since I'm a light sleeper (seriously, a phone vibrating will wake me up)

In an attempt to show DH that there are decent houses in our price range I showed him one that fits all of our requirements and more for $105k....unfortunately now he wants to look at it because it even has things we want but don't require like a heat pump and steel siding and built in 1993 instead of pre-1970's. I'm kind of afraid we're really going to like it because we're not ready to buy and unless our house moves very quickly we won't be ready until January at the earliest. It's also less than a block from tracks but they dead end about a block further down so I doubt they are used much.