The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Kotten on December 21, 2016, 01:09:11 PM
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I´m a long time MMM-lurker in need of some advice. We are a family of two semi-mustaches and one budding mustache, who are considering a move. We live in Scandinavia, why some of the stuff below might differ from US conditions. Our situation:
Both adults are able to work full time due to flexible schedules, parents nearby and excellent day care. We have a savings rate of about 50%.
We are renting at the moment at a cost of 1200 $/month. The rental is perfectly situated near a transportation hub and close one of our jobs, daycare, shops, cultural-stuff and everything else. This also enables us to not own a car. Housing is very expensive where we live, for a number of reasons. A 3:2 house around here would cost us around 700k $. One of us has to commute 30 min (1 hour/day) by train at the moment (I know, I know). One problem is that the environment in the immediate vicinity of our apartement is not the best for kids.
The alternative:
We could buy a 3:2 house 20 minutes away by train. The house also has a basement which has been modified into a small 2 bedroom rental. The rental needs some work. The house is for sale at 300k $. We have 20% down for the house (of course), and could get a loan at 1% interest after tax deduction. The rental would bring in around 500-600$/month. Our monthly expenses for the house + rental would be around 1100$. So our housing costs would be cut by around 500-600$.
We would still have access to public transportation, but it would mean a commute of 40 min/day for one of us and a commute of 30 min/day for the other. The cost of public transportation would increase by 150$/month. We would probably need to get a car for other reasons. The house is situated in a "boring" area but with great recreation areas nearby. It is safe, has ok schools and so on, but where we live now is generally considered to be one of the nicest places around here. A couple of the grandparents would not be able to pick up the kid from daycare anymore, although visiting would not be a problem. In other words: our flexibility would be hampered. That being said, a house would mean a lot of MMM-opportunities and a slightly better environment for our kid.
So... should we move, or stay in our rent controled apartement and just throw everything into investments? Any and all thoughts on our situation are welcome. (Sorry if my english is a bit off.)
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Talk more about the difference between where you live now, and where the possible house is.
Is your current area "not the best" or "one of the nicest"? And what do those things mean to you?
The things you talk about in your current area seem pretty great. Also, be aware that home ownership costs money in that when something breaks, you get to pay for it, not the landlord.
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To clarify:
Where we live now is a very nice area. Great schools, great cultural life, great socioeconomic status etc. The immediate area around the house where our apartement is located is not the best for kids as there is some traffic and it is close to the railway station.