Any help would be greatly appreciated. First-time poster!
Current Housing:
Condo in a condo/townhouse community.
Location: + very convenient for grocery shopping (< a mile) with a ton of options
+ very close to major highway
- Far (25-30min) from work, major attractions (big parks, popular bars & restaurants)
- Terrible public school options
Living: It is enough space for the two of us. Small kitchen but can be made more comfortable if we decided to stay longer and invest the money for remodeling. We are living very comfortably in our condo. However, the biggest problem that bothers us with this place is our (lack of) outdoor space. We have a small deck, which is a good hangout place, except that we have to look into other condos from the deck. For me personally, if our deck faces a secluded green area, I would have almost no complaints about the living condition. Note that we live in a city where 3-5 months of the year are too cold to sit outside, and about 2 months that are too hot to be out, so sometimes I contemplating having a big yard with a good chunk of the year when I can’t really fully utilize the outdoor space. We are also trying out home gardening, currently utilizing the railing of our deck to grow some herbs and tomatoes. Even if our outdoor living space is private (i.e not looking over other people’s condos), at some point our ideal gardening needs will outgrow this deck.
Cost: we have about 10 years left in our mortgage after refinancing it a couple years ago. We are paying $1,100 a month, with 300 of them being “overpayment” towards the principal. There is also a $200 condo fee we pay monthly.
Real Estate: if we sell it now, Zillow is showing $110K (bought it for $140K!). Zillow also shows that comparable homes in the neighborhood are being rented out at $900 to $1K a month. Note that the condo association is getting more and more against renters in the community. By the way, we have never had any landlording experience before.
Possible house purchasing:
We have been casually looking at houses in our desired areas, and have narrowed down our wish list to a few essential things.
(1) Private yard big enough for some moderate home gardening. The backyard being nice and private is one of the most valued things we are looking for.
(2) Decent school district
(3) Close to major highways, not farther from work than we are now.
Of course we are looking for other things in a house, such as a master bathroom with separate shower and tub, big kitchen, and finished basement. However, I would say the lack of the three things listed above would be deal-breakers, whereas the others are “nice to have”.
Real Estate: the desire to have both a private big yard and a convenient location puts our desired houses on the high end of local housing price. If we set $200K -$300K as the budget, it has been challenging to find a house of our liking. If we raise the budget to $300K-$350K, it becomes much easier. Prior to being exposed to FIRE concepts, we were comfortable spending $300K or more for housing. That has since changed, and we are reevaluating whether we should spend that much, or lower it to $250K. Also, we have enough down payment saved to pay for up to 20% of a $300-$350K house, but whether we go with the big downpay + smaller mortgage route, or other, is still up for debate.
Our question: what should we do with our housing situation so that we could live comfortably without compromising our end goal of reaching FIRE in 10 years? With our current income and savings, we can reach the minimum of SWR “stash” in 10 years, assuming a 5% return on investments as is. These are the options we have come up with, but are curious to hear others’ thoughts:
(1) Stay in the current condo.
(2) Get a house and sell the condo. (note that we would benefit from a buyers market when buying while suffering from it while selling, and vice versa - should we take advantage of the low interest rate now and buy a house and swallow the loss on the condo?)
(3) Get a house, and keep the condo as a rental. This would have been a much more desirable option if the monthly rental was higher, or if we had experience and know what owning a rental entails.
Thanks, everyone.
