Tell me what a bad idea this is...

[catccc]

We are currently renting a 3 BR 1.5 BA for my family of 4.  Not quite sure on sqft, but I'd guess 1,200-1,400.  Rent is $1,400, and is below market.

Then there's this gorgeous house for sale.  It is 3 BR, 2.5 BA on the 1st and 2nd floors, and a separate entrance 2 BR 1 BA apt. on the 3rd floor.  Total home sqft is 4,032, so we are talking 2,688 main home and 1,344 for the apt.  List is $550K, let's say we get it for $530K and put down 20%. Assuming a 3.9% interest rate, $7,500 in property taxes, and $2K in insurance (for both the main portion of the house and the apartment), the monthly payment would be about $2,800/month.  The apartment rents for $1,400/month.  So at first glance, it sounds like this amazing house will cost the same as our current place, $2,800 - $1,400 = $1,400.

But then I need to factor in increased maintenance costs ($5,300 annually for whole house), increased utilities ($100/mo? IDK.  No clue...), potential apt. vacancy ($1,400), etc.

I would guess buying this place would cost my family an additional $660/month over what we currently pay for housing.  It would also cost us a lot of time, because I hear that's what happens to homeowners.  Plus some time for the whole landlording thing.  That's another $140/month if we decide to hire a property manager.

Sounds like a bum deal, right?!

There's a part of me that wants to be stupid, not crunch the numbers beyond my second paragraph and just do it.  It is a beautiful house.

[pbkmaine]

How long do you plan to stay where you are? Would this be your "forever" house?

[ketchup]

It sounds like a lot of extra work for the privilege of being able to pay more to live in a bigger house.

What would market rent be for the main home be?  If you were to leave and rent out both units, would the property cash flow?  If it wouldn't, you'd have a pretty hard time calling this any sort of investment as opposed to simply "paying more to live in a bigger house" with a side order of "profitless landlording."  Do you want to manage a rental property closer-than-right-next-door forever?

What is market value of a plain-jane 3/2.5 SFR in your area to compare it to?

[Secretly Saving]

Really sit down and pull together all the numbers. Accurate numbers.  Then post them here and let all the rental experts chime in.  Being a landlord is great, but it's not for everyone.

[catccc]

This would be a forever house.

There are other houses on the market that are more comparable to our current rental.  They would go for $250-$300K, I think.

I'm not trying to call it an investment by any means.  That's why I'm just calling it a 'bum deal' or a 'bad idea.'

It is paying more to live in a bigger house.  I realize that.

And big house isn't my style, or so I say.  We were looking at a more comparable home to ours, listed at $320K, and it is 2,173 sq ft.  I told DH I didn't want to live in it because it was too big.  (It was also priced at $370K when I said that.)

So why would I want an even bigger house?  IDK.  I guess it's just really cool looking.  That's why it is so dumb.

Doesn't anyone ever wish they just did stuff without forethought?  My sister is this way.  She owns a house in CA (Bay Area) and a house in Portland, OR, because she decided she was going to move to Portland.  But she's not sure when she's moving.  So she's renting out the portland house to a friend who pays rent less than the mortgage.  She rents out part of her Bay Area home.  Her DH makes bank so it's all good.  She doesn't feel like she needs to think about anything, she just does what she wants to do.  Sometimes I want to do that, too.  I cannot buy a meal at a restaurant without adding numbers up in my head and seeing which meal is the best deal.

Deciding these things also gets to be annoying if you can afford the bad decisions.  It would certainly be smarter to buy a smaller, less expensive place.  If I couldn't afford the bigger place, I wouldn't even be looking at it.  But we can.

IDK what I'm even trying to get out of this post...  Sorry for being all over the place.  Just thinking out loud, I guess.

[MakeSmarterDecisions]

I would definitely slow down and detail your thoughts (goals) in a written format and rank what's most important to you. Even go back and re-consider the original question you are asking. That may be the source of some problems. We can spend a long time working through things and get anywhere because we are confusing a bunch of questions in our head.  (Yea - I do a lot of work on decision-making, and I made some real iffy real estate decisions before I learned more about how to put a better plan in place). I wouldn't do what your sister does...