Hey there, been reading a lot, but first time poster. I usually find answers that are similar to my situation and go with that, but in this case I think I need some more help. We're debating moving from a 350k house to an energy efficient 650k house for more space for our kids to grow and out of town family to visit. We're pulling our hair out with 2 adults, 4 kids with 2 bathrooms and 3 bedrooms. We are weighing the costs of trading some financial freedom with less stress in a bigger home.
I live and work in a relatively high HCOL area (Boca Raton, FL). Wife and I are in our mid 30's and have 4 younger kids in public school. Wife stays home and takes care of house / food / kids, etc.
Yearly Income:
128k salary (no state income tax, annual raises are consistently ~5%)
15-30% bonus
12k trust (pledged for the next four years if we buy a bigger house)
6k rental income after expenses (projected if we move to a bigger house)
Assets:
~200k cash
40k in 401k (just started company w/ 401k, but near maxing w/ match now)
60k in Roth IRA
350k 1600 sqft house (owe 290k of 302k @ 3.25% refi 1 yr ago, no PMI)
3 & 6 yr old cars with lower mileage.
No debt aside from mortage. Monthly housing costs right now including utilities are ~$2300 /mo. Job situation is now pretty stable.
Current house is a 3/2 ~1600 sqft in an A Rated school district and 15 min from work. It's older and the energy efficiency is non-existant, non-gated community, but we've added nice upgrades over the past 10 years including new kitchen, baths, floors, and a pool / spa. We are thinking of renting it, and then coming back to it to retire.
My wife and I like a higher quality home (nice yards, views, and communities, some upgrades, etc), so there may be some additional house cost factor there and we are willing to spend a bit more because of that.
There's a new home community in a close by A-rated school district, very energy efficient, impact glass windows, latest hurricane building standards, natural gas, low HoA, gated, low maintenance, but the houses are not cheap 600-650k. It would be around 3500 sqft and 5bdr, 5bath.
Some of the surrounding areas have either higher taxes, CDD deb taxes, high HoA fees, crappy schools, or generally are not a good area, but the homes could be 450-550k. For comparison purposes a re-sale in the next town over could have an additional 1-2k year in taxes / CDD, 150/mo increased electric, no natural gas, higher insurance costs, and 100-300/mo more in HoA. There's also high maintenance costs when homes are 20+ years old including replacing roofs and A/c systems. Older homes were not built to latest hurricane codes and that explains some of the increased insurance costs (5-6k/yr compared to 2-3k yr).
So the way we see it we have 4 options (maybe you can find more)
1. Stay in our current house and deal with it, maybe wait 5-10 yrs?
2. Buy the new construction for ~650k (they pay 10k in closing costs) and put 20% down and not worry about maintenance (save it), move in December 2018.
3. Buy a resale for 500-550k (but pay 400-500 more / mo for the above mentioned expenses + increased insurance for the next ~10 years)
4. Rent a bigger house for $3500+ / mo.
If we pick either 2 or 3, the costs are generally offset with the rental income (barring major maintenance to existing home) and the trust pledge (at least for the next four years). Housing costs and interest rates are going up and I want to do something before it's too crazy for fear that it might be another 5-10 years before the cycle comes back down. We could also sell our current home, but we like it and may come back to retire or after kids move out.
So all that said... what should we do?
Thank you in advance for looking at my situation with me.