Fellow Mustachians, Yankuba needs your help.
Our family is expanding - Mrs. Yankuba is expecting our second child. I was not in favor of having a second child due to the added responsibilities, cost and risk but Mrs. Yankuba really wanted two children, so I capitulated - like the French.
We currently live in an 1100 sf co-op (it's like a condo but slightly different) in Long Island, NY. Our mortgage is almost paid off and the monthly common charges are $1000. $500 of the $1000 consists of property taxes. $100 is parking. The remaining $400 is heat, water, landscaping, snow removal, the salary for the super, maintenance on the common areas, insurance (common areas) and the mortgage on the complex. $1000 is extremely low for the neighborhood and is why I chose to buy in my building many years ago. Monthly maintenance for comparable 2 bedroom co-ops in the neighborhood is 20% to 40% higher.
Mrs. Yankuba would like to move to a larger home so that each child could have their own room (we have a boy and the baby will be a girl). Today we saw a 1600 sf co-op across the street with extremely low maintenance - $1300. Half of the $1300 is taxes. This monthly maintenance is approximately 40% lower than comparable three bedroom co-ops on the market. If we were to buy a house in our neighborhood, the taxes alone would be a minimum of $12K per year which is why we are sticking to co-ops.
I could get approximately $450K for my co-op less the remaining mortgage ($23K), broker's fees ($27K) and closing costs ($10K?) - so a total of ~$390K in my pocket. The new place would sell for maybe $480K, but we would want to gut the place because it hasn't been updated in more than 20 years. We would tear up the carpets and finish the floors, gut the closets and install modern closet systems, replace all the doors, remodel the two bathrooms and kitchen, install a bunch of ceiling fans, replace the ancient air conditioners. All in it would probably cost $75K - although my broker said closer to $60K. So the new place would be $555K ($480K plus $75K renovations plus closing costs). Most three bedrooms in our neighborhood sell from $480K to $600K but the cheaper units all could use some work.
So the bottom line is that moving to the bigger place would cost me about $165K ($555K for the new place minus the $390K I get from selling my current place. In return for this $165k I get a roomier apartment, including one extra bedroom and much more storage space. The renovations would bring the new apartment up to speed with my current apartment, so I would not be getting enjoyment from two new bathrooms and a new kitchen because my current bathrooms and kitchen are remodeled and equivalent. I would also lose a patio/terrace and trade an indoor parking spot for an outdoor parking spot (there is a waiting list for an indoor spot in the new building). I would also switch from laundry machines across the hall to laundry machines in the basement.
We can afford the $165k. Additionally, mortgage rates are low and 80% of the renovations would add to the value of the home so spending $165k on a bigger place and remodeling it is a lot different than spending $165k on electronics, restaurants, cars and trips.
The whole idea of gutting the apartment and dealing with contractors while working, attending graduate school at night and raising Little Yankuba gives me anxiety. Mrs. Yankuba volunteered to handle the contractors and she does the brunt of the parenting, so it wouldn't be too bad if the contractors are decent. But is it crazy to take on the $165k in return for 500 square feet, more closets and an extra room so the kids don't have to share? Is it that terrible for a boy and girl to share a room 'til college? (the kids will be 4 1/2 years apart) In Manhattan it is quite common and everyone in my parents generation shared rooms in NYC in the 40s, 50s and 60s.
What say you?
Many thanks!
-Yanks
