Author Topic: Should i buy a bigger home relatively HCOL + 4 kids  (Read 4503 times)

Slow2FIRE

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Re: Should i buy a bigger home relatively HCOL + 4 kids
« Reply #50 on: April 02, 2018, 02:20:08 PM »
You can't afford a 650K house, even with 20% down payment. 
Counting on profits from a rental that isn't currently in service sounds like a gamble to me.  I suppose you did homework on the numbers already for the rental...[repairs, maintenance, capital expenditures, vacancy], but if you've never been a landlord you could very well find your projections to be off from reality.  How long does it take for a house of your size and layout to rent at your desired rent for your market? 

I'm going to guess that your home PITI is around $2000 so you must be expecting to have rents around $3100 (10% for vacancy, 20% for repair/maintenance/capex, $500 profit).  How does that play with a 20% overall housing vacancy rate in Boca Raton?  Only 25% of the residents are renters.  Average 3bdrm home rents across the whole city is about $2050/month.  I see expensive pockets of rentals like your home, but there are many options for sub $2000 homes of similar size and quite a few in the $2000-$2500 range too.  This tells me, that acquiring renters won't be as sure fired guaranteed as you might be thinking and my 10% vacancy reserves may be too optimistic for this particular city & price point.




formerlydivorcedmom

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Re: Should i buy a bigger home relatively HCOL + 4 kids
« Reply #51 on: April 02, 2018, 02:20:53 PM »
450 for something decent. I just figure if we're going to move we might as well optimal space for everyone to live and grow, hence looking for 5bdr 4 bath. Working on frugalizing everything else in the mean time but still doesn't change the raw multiplier/percentage of income math when it comes to housing expenses that everyone seems to use.

When I married my husband five years ago, we fit 3 kids (aged 3-7) and us into a 2000 sq ft house and thought it was a teeny bit cramped.  When we moved to a different town, we bought a 3000 sq ft house, thinking that would be perfect for us as the kids grew.  (Note: we did get new construction, but we bought the model home as the neighborhood built out.  As the model, it had EVERYTHING..and because it was officially 3 years old, we negotiated a 15% discount on the list price.)

We were dumb.  Our kids are now aged 8-12, and our house is way too big.  There are two entire rooms we don't use.  They have furniture and other crap in them, and occasionally we visit the crap, but the rooms themselves are useless.  We could cut 400 sq ft off the house without noticing, and probably cut 750 sq ft off before it occurred to us that we were cramped.  Big lesson for us - kids need less room as they get older, because their toys (e.g., electronics) get a lot tinier.  We seriously considered downsizing this year, and we may very well do that next year. 

I live in a lower cost of living area than you, but my income is about the same as yours, and, like you, I'm the sole provider at the moment.  I had heart palpitations at the thought of paying 650k for a house on my income.  ESPECIALLY when you don't have much savings in the grand scheme of things.

I urge you to refactor your expectations of what you really *need* in a house, in terms of size and features.  Gated communities are always more expensive - is that really necessary?  3500 sq ft is unnecessary (I promise). 

formerlydivorcedmom

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Re: Should i buy a bigger home relatively HCOL + 4 kids
« Reply #52 on: April 02, 2018, 02:22:56 PM »
And while we're on the subject - doubling your space doesn't double the cleaning. It more like triples it. I really don't know why, but it does.

Part of that increase in time is nagging the kids to actually clean :)  Although I do like the idea of having a bathroom I could dedicate completely to the little boy, and then tear it down and start over when he leaves the nest.

shelbyautumn

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Re: Should i buy a bigger home relatively HCOL + 4 kids
« Reply #53 on: April 02, 2018, 02:24:31 PM »
Although I do like the idea of having a bathroom I could dedicate completely to the little boy, and then tear it down and start over when he leaves the nest.

You may be on to something, here...I shared a bathroom with my brothers at one point. PEE.EVERYWHERE.

They're nasty.

Easye418

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Re: Should i buy a bigger home relatively HCOL + 4 kids
« Reply #54 on: April 02, 2018, 02:30:34 PM »
And while we're on the subject - doubling your space doesn't double the cleaning. It more like triples it. I really don't know why, but it does.

Part of that increase in time is nagging the kids to actually clean :)  Although I do like the idea of having a bathroom I could dedicate completely to the little boy, and then tear it down and start over when he leaves the nest.

My discretionary spending money goes to two services:  Lawn care ($27.05 weekly) and Maid Service (2 times a month, $95 per).  Cutting the lawn and cleaning the toilets/shower just aren't fun anymore.

3,000 sq ft is perfect IMO.  It is SLIGHTLY more space than I need (will need) but it's definitely a comfortable space.

Sibley

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Re: Should i buy a bigger home relatively HCOL + 4 kids
« Reply #55 on: April 02, 2018, 02:33:44 PM »
Although I do like the idea of having a bathroom I could dedicate completely to the little boy, and then tear it down and start over when he leaves the nest.

You may be on to something, here...I shared a bathroom with my brothers at one point. PEE.EVERYWHERE.

They're nasty.

I don't have brothers, but I believe it. The house I bought the previous owners had 2 boys - 8 and 10ish. I have to replace the bathroom floor because of those boys. It's not even cosmetic (though it's hideous) - it has a permanent odor. I spray part of the floor with the enzyme cleaner for pet urine to keep it under control. And keep the door open to encourage airflow.

NotAnymore

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Re: Should i buy a bigger home relatively HCOL + 4 kids
« Reply #56 on: April 03, 2018, 03:53:58 PM »
Although I do like the idea of having a bathroom I could dedicate completely to the little boy, and then tear it down and start over when he leaves the nest.

You may be on to something, here...I shared a bathroom with my brothers at one point. PEE.EVERYWHERE.

They're nasty.

I don't have brothers, but I believe it. The house I bought the previous owners had 2 boys - 8 and 10ish. I have to replace the bathroom floor because of those boys. It's not even cosmetic (though it's hideous) - it has a permanent odor. I spray part of the floor with the enzyme cleaner for pet urine to keep it under control. And keep the door open to encourage airflow.

My daughter has to share with her 3 brothers...

NotAnymore

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Re: Should i buy a bigger home relatively HCOL + 4 kids
« Reply #57 on: April 03, 2018, 04:05:51 PM »
You can't afford a 650K house, even with 20% down payment. 
Counting on profits from a rental that isn't currently in service sounds like a gamble to me.  I suppose you did homework on the numbers already for the rental...[repairs, maintenance, capital expenditures, vacancy], but if you've never been a landlord you could very well find your projections to be off from reality.  How long does it take for a house of your size and layout to rent at your desired rent for your market? 

I'm going to guess that your home PITI is around $2000 so you must be expecting to have rents around $3100 (10% for vacancy, 20% for repair/maintenance/capex, $500 profit).  How does that play with a 20% overall housing vacancy rate in Boca Raton?  Only 25% of the residents are renters.  Average 3bdrm home rents across the whole city is about $2050/month.  I see expensive pockets of rentals like your home, but there are many options for sub $2000 homes of similar size and quite a few in the $2000-$2500 range too.  This tells me, that acquiring renters won't be as sure fired guaranteed as you might be thinking and my 10% vacancy reserves may be too optimistic for this particular city & price point.

~$1750, was factoring ~$2750. I understand it is greater than average, but the house could probably get it.

MrThatsDifferent

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Re: Should i buy a bigger home relatively HCOL + 4 kids
« Reply #58 on: April 03, 2018, 06:59:03 PM »
Although I do like the idea of having a bathroom I could dedicate completely to the little boy, and then tear it down and start over when he leaves the nest.

You may be on to something, here...I shared a bathroom with my brothers at one point. PEE.EVERYWHERE.

They're nasty.

I don't have brothers, but I believe it. The house I bought the previous owners had 2 boys - 8 and 10ish. I have to replace the bathroom floor because of those boys. It's not even cosmetic (though it's hideous) - it has a permanent odor. I spray part of the floor with the enzyme cleaner for pet urine to keep it under control. And keep the door open to encourage airflow.

My daughter has to share with her 3 brothers...

Which should be fine until she hits puberty and then she will need her own space. I think your idea of waiting 10 years is the best, so you can focus on building up your stache. Hell, you might decide itís cheaper to rent a place for 6-8 years until the kids have left and then move back to your perfect place. Can the trust be used for renting? Try to work out 3-4 different scenarios that include, buying, renting and savings and see what works best for you and your family. End of the day, 6 humans, 1 salary. Good luck.