Author Topic: Nice house, Large value increase, Growing feeling that I am stuck  (Read 3114 times)

UndergroundDaytimeDad

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TLDR; Seeking opinions or ideas on the home I currently reside in.  Everything seems fine, but I get the nagging feeling I am missing an option in my family’s current high value, lower cost home. 

Six years ago my wife and I purchased the home we currently live in.  The market in my area has been on a tear for over a decade.  Our house is large, but not unmanageable, and no space goes unused, except a guest bedroom (I use it’s bathroom).  It is 3100 square feet for 2 adults, 2 boys, 1 dog, and the slim but real possibility of an in-law moving in at some point. 

The Mustachian position is clearly that we have too much space, and I do understand that viewpoint and know that we could do with much less.  But the reality on the ground is much more complicated.

Friends of ours who moved into town, who also have two boys, live in a much smaller home that is a townhouse.  They paid slightly more than what we paid for our house, not 3 years later.  Essentially, we are in a large, detached home, that is only 11 years old, for less than the current price of an older townhouse. 

To add to the complexity, our house is also very energy efficient.  I was shocked when we got our first bills, as I knew the house had an Energy Star rating, but the reality of what that meant turned out to be that our home costs much less to run than a standard home ½ the size. 

The taxes aren’t terrible for the region I live in, but they are clearly tied to the present value of the house.  Further afield, the tax rates are often higher where the tax base of large businesses isn't present to carry a large portion of a town’s revenue needs.  Taxable value is not assessed at full market rate around here, thankfully.  For perspective, the current price of the home equates to about a 40-50% gain. 

This is all to say that I wonder if I am trapped in this house, which I do love, if only because it is now so valuable, and it isn’t onerous to maintain.  I have done ample research on the general concept of cashing out and relocating.  The problem is that even moving a further 45-60 minutes away from the large city my suburb is tied to, we would still be spending 100-110% of the purchase price of our home to live in a place that will not be as new or well laid out.  Downsizing would essentially mean putting 110% of the purchase price of this home back into real estate, just to have less space, be far from an urban centre, and have a respectable wad of cash to add to the pile. 

My hope is that someone out there has been in a similar situation and may have some perspective to share.  If I have missed sharing any details that will help, please let me know. 

ecchastang

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Re: Nice house, Large value increase, Growing feeling that I am stuck
« Reply #1 on: August 31, 2019, 06:42:16 AM »
Sounds like you should keep the house as it meets your needs and you can't really find better for less.

StarBright

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Re: Nice house, Large value increase, Growing feeling that I am stuck
« Reply #2 on: August 31, 2019, 07:41:12 AM »
I agree. Sounds like you have a good deal and you are also conscious of being energy efficient and not commuting. You have lucked into what sounds like an awesome housing situation - congrats!

Also, with the possibility of an in-law moving in at some point, I'd say it is great that you already have space all taken care of.

We are in the opposite position in-law wise: have a smaller home that we adore but an in-law that is now making noise about wanting to move in with us once they need care. We are thinking of adjusting our budget to have to upsize or add in-law housing somehow in the next 5-10 years. You already have that taken care of!

I'd say don't worry about any mustachian face-punching and just be content with your lovely house that you like.

 

Papa bear

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Re: Nice house, Large value increase, Growing feeling that I am stuck
« Reply #3 on: August 31, 2019, 08:48:38 AM »
A lot of people are in the same situation.  You’ve got to live somewhere and if alternatives are the same price for the same utility, may as well stay. 



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JGS1980

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Re: Nice house, Large value increase, Growing feeling that I am stuck
« Reply #4 on: August 31, 2019, 08:55:16 AM »
what's the problem? Looks like you have your bases covered.

Enjoy the home!

JGS

UndergroundDaytimeDad

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Re: Nice house, Large value increase, Growing feeling that I am stuck
« Reply #5 on: August 31, 2019, 06:48:31 PM »
Thanks everyone! Appreciate the fresh eyes. 

I think I am looking for efficiencies all over and have run up against the house and concluded "nope, can't improve on this", which seemed like I had to have just been missing something.   

Dicey

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Re: Nice house, Large value increase, Growing feeling that I am stuck
« Reply #6 on: September 03, 2019, 05:23:29 AM »
Thanks everyone! Appreciate the fresh eyes. 

I think I am looking for efficiencies all over and have run up against the house and concluded "nope, can't improve on this", which seemed like I had to have just been missing something.   
I'm having trouble seeing a problem. I suppose you could look for ways to monetize some of the house i.e. having a house mate or creating an ADU and renting it out, but if you're living on less than you earn and saving/investing wisely,  I'd look for other ways to optimize. How's your water consumption?

UndergroundDaytimeDad

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Re: Nice house, Large value increase, Growing feeling that I am stuck
« Reply #7 on: September 05, 2019, 02:09:59 PM »
Thanks everyone! Appreciate the fresh eyes. 

I think I am looking for efficiencies all over and have run up against the house and concluded "nope, can't improve on this", which seemed like I had to have just been missing something.   
I'm having trouble seeing a problem. I suppose you could look for ways to monetize some of the house i.e. having a house mate or creating an ADU and renting it out, but if you're living on less than you earn and saving/investing wisely,  I'd look for other ways to optimize. How's your water consumption?

Perhaps others ways to optimize is the right approach.  Water consumption and electricity are solid next targets.  Thanks!

clarkfan1979

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Re: Nice house, Large value increase, Growing feeling that I am stuck
« Reply #8 on: September 23, 2019, 05:55:45 AM »
My wife and I are in the process of buying a house a little too big for us. However, it is very energy efficient. Cleaning will be the biggest issue. One set of parents will be asking us for money soon. Because we have the extra space, I will offer them to live with us, but I will not give them money. I'm 99% sure that the parents will not agree to live with us, so having the extra space allows us to give a polite, "no" to aging parents who ever spend.
« Last Edit: September 23, 2019, 05:57:34 AM by clarkfan1979 »

BicycleB

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Re: Nice house, Large value increase, Growing feeling that I am stuck
« Reply #9 on: September 23, 2019, 02:43:54 PM »
Use your Optimism Gun! You're not stuck, you're King of the Efficiency Hill!

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If your dwelling is already cost optimized, optimize your use of it. How can the family have the greatest possible experience, joy, memories, learning? Would you achieve these goals better by changing something, or by learning to be happy that your life is already wonderful? Can you express more often or dramatically your satisfaction about the wonderfulness of your home...and your family?

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Maybe the ceaseless search for optimization is taking away from other possibilities. Do you love optimizing, or do it out of duty?

If the latter, return to prior section of post; if the former, ask family what they would like to see from you. If none of the family's requests relate to the house, it is confirmed that the house is optimized. Fill the family's other needs...even if that means stepping away from the joy of optimizing.

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You're never stuck when you have skills and an Optimism Gun...

:)

Tuskalusa

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Re: Nice house, Large value increase, Growing feeling that I am stuck
« Reply #10 on: September 23, 2019, 03:00:39 PM »
We are in a very similar situation. We have a house that is a little big, but we use almost every space. Except a guest room. We are in the process of converting the unused guest room to a commuter rental unit. We’ve added a kitchenette and a separate entrance, and we’ve blocked the unit off from the main house. We are hoping rental income will offset property tax. Like you, were looking for efficiencies in a rising housing market.

ericrugiero

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Re: Nice house, Large value increase, Growing feeling that I am stuck
« Reply #11 on: October 04, 2019, 12:06:48 PM »
It sounds like you purchased at a good time and the fact that the house is so energy efficient offsets one of the big downsides (utility cost) of having a larger house than you need.  You could easily decide you like the house and you want to stay there. 

But, I will push back in one area.  You are comparing the original purchase price of the home you own with the current price of possible replacement homes.  You should be comparing current values of both when deciding whether to move.  Rising property values typically affect both large and small homes.  If you can sell your 3100 sq ft home, buy an energy efficient 2000 sq ft home and have a good chunk of money left to invest, that could help you towards FI.  Your taxes and insurance will certainly go down and if you find a good energy efficient home utilities could also drop. 

I'm not saying you should move, just that you need to compare apples to apples and decide what your priorities are.  Falling property values can make it hard to leave a home.  Rising values mean you have lots of equity.  Being in a good situation now means you are under no pressure to move.  It does not mean you are stuck. 

Neo

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Re: Nice house, Large value increase, Growing feeling that I am stuck
« Reply #12 on: October 07, 2019, 10:12:07 PM »
If optimization of funds is the goal you *could* look into a cash out refi on the large equity gain in your home and invest the proceeds somewhere that brings a return larger than the interest cost of refinancing that equity.

Not saying you should do this but you could look into it. Do your own due diligence and decide if it would benefit you.

Le Poisson

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Re: Nice house, Large value increase, Growing feeling that I am stuck
« Reply #13 on: October 15, 2019, 08:15:55 AM »
We are in a similar situation.

Our optimization was to take the equity stored in the house and play it against rentals. Now our primary residence has financed 1 one rental and we are closing on a second. This hasn't reduced our eco-footprint or done anything to lower the value of our primary home, but it has put it to work bringing in more little green workers so we can make an exit if we want to... plus we now have 3 options for retirement addresses - which could mean cashing out the "golden goose" rather than being trapped in it when we decide to move along. (My folks can't afford to sell and downsize, although they should have done that years ago for health reasons).

Guizmo

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Re: Nice house, Large value increase, Growing feeling that I am stuck
« Reply #14 on: October 16, 2019, 10:30:36 AM »
3,000 sq ft? For a family of 4 and a dog? How can you possibly be using all that space? Does the dog have his own room too??

Sounds like you can afford your home no problem so if you like it then stay in it. But I really think there's no real reason why you couldn't fit in a 2,000 sq ft home.

mountainfamily

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Re: Nice house, Large value increase, Growing feeling that I am stuck
« Reply #15 on: November 09, 2019, 09:55:23 PM »
Enjoy it!! We're in an overpriced 1100 square foot home with 1 bathroom, a toddler, a busy home business with clients coming in and out all the time, and the desire to have another kid. It's been an ongoing project to optimize every space so that it's usable. Like the 8x5 foot bathroom with little counter space, or the narrow hallways, or the small bedrooms. We're going to make it work, because there aren't any other options in our expensive city, but I'd rather have a little extra space than be squeezed.