Downsizing with kids...

[FireHiker]

We are in the preliminary stages of considering a major downsizing with kids, and I'm throwing the subject out there to see if anyone here has done so, any thoughts I haven't considered, etc. We've done a pretty substantial pros/cons analysis and financial assessment, and whether we do it in the immediate future or in a few years, it will definitely happen. We had been leaning towards waiting a few years and moving closer to the high school (not that it's real far now, but not real walkable-friendly from our current place). A townhome in our neighborhood came up for sale recently, though, and we visited the open house. It is right near my daughter's best friend, whose family has the same floor plan, so we hung out with the parents and chatted after. We're seriously considering it, but there are some logistics to work out still.

Here are the specifics:
Current home is an enormous clown house that we bought new in 2012. nearly 3,700 square feet, 5 bed/4 bath with loft, 3 car garage, backyard with pool. We have over 50% equity in this house and if we sell we can put 500k down with substantial cash left to put in savings/pay for college. Beautiful house and my 9 year old son has some friends nearby, but honestly we don't socialize with our neighbors all that much.

Townhome we saw last weekend: 1642 square feet, 3 bed/2.5 bath with loft, 2 car garage, fenced large patio/small yard (adequate for our dog). Asking price is about 660k. Walking distance to the elementary school, TONS of kids (our kids' friends) in the immediate vicinity. Nice community pool. My very social 7 year old daughter would be in absolute heaven, and my 9 year old son has plenty of friends there too. We would have so much more money available to travel (which we love) and retire well earlier than our previous target. We could retire without moving to a LCOL area, which is something I never thought would be possible.

So, we're running the numbers and trying to decide what to do. Moving will require substantial decluttering and downsizing of our stuff. There will be a big adjustment to the much smaller kitchen, but we can afford to eat out more which we both enjoy with so many great restaurants nearby, within walking distance since the townhome is a mile closer to the main shopping center than our current house. I've been talking to a friend of a friend who is a local well-known realtor and she's going to meet with us this weekend to discuss our wants/needs and see what else is out there if we decide we do want to wait for something closer to the 1800-2000 square foot size.

Anyone else have a downsizing with kids story to share? Any pros/cons/suggestions? We know financially it makes a lot of sense, and I don't REALLY care what other people think...but I am sure most of our friends and colleagues will think we've lost our minds. I just see it making our lives so much easier. We don't hire out home maintenance, so I spent most of Saturday cleaning and didn't even do floors. My husband spends so much time on yard and pool maintenance. If we move we could get rid of our lawn mower. We wouldn't have to change schools, and our 2 mile commute would become a 1.2 mile commute (an inconsequential change; we drive because we work together and come home to hang with the dog every day at lunch). Interested to hear thoughts/experiences from anyone else who has gone counter-culture and downsized with kids instead of upsizing!

[Us2bCool]

In our case, we downsized because we were moving from Texas to the California Bay Area, so it was more a matter of economics. We went from a 2600 SF clown house to a 1500 SF home with a very small yard. The only real downside to the new house was that it was in a draconian HOA, but other than that we absolutely loved having a smaller house. We did have to replace our large scale furniture but ended up getting smaller scale furniture of a much better quality.

Our daughter was 13 and was really struggling socially in the Texas school, and she ended up loving her new school. Being right in town she found it easier to hang out with friends. Overall we had a much better life in the smaller house.

[Laura Ingalls]

Do it.  1600 square feet is plenty big for four. 

We had a 1600 sf house when our children (2) were small.  We live in 900 sq with a finished basement now with high schoolers. 

We will probably downsize again when the nest empties.

Ruthlessly sort and purge and enjoy not cleaning the pool.  Figure out what kitchen stuff you are actually using and what is dead weight. 

[Jenny Wren]

Over 1600 sq ft for 4 people is huge. We raised our two boys  in a 1200 sq ft, 3 bed, 2 bath home and had more room than we ever knew what to do with. We lived here from when the youngest was 4 until now, 14 (elder from 8 to 18). Now three of us are moving into a 650 sq ft 1 bedroom apartment (elder off to college). Previous to this house, the 4 of us lived in a 900 sq ft 2 bedroom for three years.

As someone that is just coming off the decluttering necessary after 10 years in one spot and a major downsize, I advise that you find a donation place with weekly pickup.  We scheduled weekly pickups for a couple of months prior to even listing the house for sale, which gave us deadlines to sort through stuff so we could load up as needed. Plus, the quicker you can get things out of the house, the easier it is to let go.

[Frugal D]

Just downsized from 2,200 sq ft, 4 bed, 2.5 bath, huge 2 car garage. Moved into a 1,700 sq ft, 2 bed, 2 bath, loft, 1 car garage. Family of 3.

Best decision we've ever made for a number of maintenance related reasons but we were also able to eliminate the last remaining $200k of mortgage debt and extract about $300k of additional equity. Huge net swing that allowed us to test out FIRE.

Do it! You will not regret it!

[englishteacheralex]

Family of four in an 850 square foot 3 bedroom 2 bath condo here. But we've never known any different, because our kids were born and raised in Hawaii, and housing is so expensive here our condo is all we can afford. We're from the mainland and our families are a bit aghast when they visit us, but everyone here gets it.

We have two toddlers and we both work full time. Most of the time I consider the lack of storage and general space to be an enormous blessing. We are ruthless about clutter and cleaning takes very little time. No yard work. Some of our friends have SFH and I consider them crazy because of all the time they have to spend cleaning/maintaining. Our kids go to the condo pool every single day and maintenance on the pool is only our problem as far as the HOA fees go.

We have a very small kitchen! The bedroom closets are called into service for food storage. We don't have much furniture. Again: less time to clean, less money to decorate.

All that to say: downsizing can be done. When we rent houses through VRBO I find myself disliking how far away we all are from each other.

[former player]

No kids, sorry, but I would just like to comment on kitchen size.  I don't know whether you've ever been in a restaurant kitchen but they are usually tiny compared to modern houses, because professional chefs know the value in time, energy and efficiency of having everything they need within reach without walking all over: the most efficient layout for actually cooking is the galley kitchen.  OK, it's true that in professional kitchens food storage is in a separate pantry (makes sense for temperature reasons), washing up is constant (limits the amount of cookware required) and eat-in facilities are limited.  A small kitchen was also the norm for old houses, for the same reasons as professional kitchens: it's practical and efficient - and in old houses a lot more cooking, and cooking from scratch, went on than is usual now.   With proper organisation, and not having scads of barely used stuff hanging around uselessly (better to have one extra dishwasher than 2 or more extra cupboards), there is no reason why a small kitchen would limit your cooking. 

[EngagedToFIRE]

We have had the same discussions and personally decided against it.  I don't know your financial situation, but with our numbers, we realized we can FIRE already by just selling the house and moving to a smaller house.  However, we don't want to RE at the moment.  We have our own business that gives us a ton of freedom anyways.  We would rather wait until the kids are out.  And with the kids, we prefer the larger house.  So when the kids move out, we'll retire completely, sell the clown house and have FatFIRE money.  But for us, since we can already FIRE, we ask ourselves "what's the point of making all of this money?" - may as well enjoy the clown house and we love it, plus we save a ton anyways.  We really do use all of the luxuries in the house (we use the movie theater almost daily, for example).  If your financial situation is much more stressed because of the big house, then you may want to downsize for sure.  Everyone's numbers and reasons are different.  But I did cringe a tad when it seems some of your major reasons are things like wanting to eat out more!  But if that makes you happy, go for it.

[EngagedToFIRE]

No kids, sorry, but I would just like to comment on kitchen size.  I don't know whether you've ever been in a restaurant kitchen but they are usually tiny compared to modern houses, because professional chefs know the value in time, energy and efficiency of having everything they need within reach without walking all over: the most efficient layout for actually cooking is the galley kitchen.  OK, it's true that in professional kitchens food storage is in a separate pantry (makes sense for temperature reasons), washing up is constant (limits the amount of cookware required) and eat-in facilities are limited.  A small kitchen was also the norm for old houses, for the same reasons as professional kitchens: it's practical and efficient - and in old houses a lot more cooking, and cooking from scratch, went on than is usual now.   With proper organisation, and not having scads of barely used stuff hanging around uselessly (better to have one extra dishwasher than 2 or more extra cupboards), there is no reason why a small kitchen would limit your cooking.

This isn't really true.  Restaurant kitchens can be small due to the expensive commercial real estate, and having customer focused areas is more profitable than back of the house.  They would rather have a larger bar and more tables than extra kitchen space.  But the larger, custom build out restaurants often have huge kitchens.

[partgypsy]

Family of 3 (formerly 4) living in a 1500 square feet home. I recommend downsizing. The only downside to our house is ex had a couple space heavy hobbies (music) and art/painting, so it was hard to make room for those.  So many studies show that social connections are what make people happy and healthy, not material things. With that big of a change, you will really need to do some serious/ruthless decluttering. It will be traumatic but ultimately liberating. So your next part time job is having weekly/regular decluttering. As far as kitchen, there is a certain minimal amount of cook, prep and cleanup space needed, bit it's a lot smaller than what Americans assume. You can look at photos of NYC chefs and their personal kitchens (ie bittman) to get an idea of optimizing kitchen space.

[AMandM]

We raised seven kids in 1500 sqft, so I don't think you need to worry about not having enough space. Do think about the layout of the space, though--are the rooms divided/connected in a way that allows for the kinds and amounts of togetherness in your family's life?

I would not worry about what people think, either. They may think you're crazy for downsizing, but they'll think you're "just lucky" for being able to travel more. They'll be wrong on both counts!

IME, decluttering is very hard for kids, even harder than for grownups.  Be kind to each other! When we moved, we ended up not pressing the kids too hard since they were not too keen on the move anyway. A few years later, when they had experienced the benefits of the move, they decluttered on their own initiative.

[SimpleLifer]

We are in the preliminary stages of considering a major downsizing with kids, and I'm throwing the subject out there to see if anyone here has done so, any thoughts I haven't considered, etc. We've done a pretty substantial pros/cons analysis and financial assessment, and whether we do it in the immediate future or in a few years, it will definitely happen. We had been leaning towards waiting a few years and moving closer to the high school (not that it's real far now, but not real walkable-friendly from our current place). A townhome in our neighborhood came up for sale recently, though, and we visited the open house. It is right near my daughter's best friend, whose family has the same floor plan, so we hung out with the parents and chatted after. We're seriously considering it, but there are some logistics to work out still.

Here are the specifics:
Current home is an enormous clown house that we bought new in 2012. nearly 3,700 square feet, 5 bed/4 bath with loft, 3 car garage, backyard with pool. We have over 50% equity in this house and if we sell we can put 500k down with substantial cash left to put in savings/pay for college. Beautiful house and my 9 year old son has some friends nearby, but honestly we don't socialize with our neighbors all that much.

Townhome we saw last weekend: 1642 square feet, 3 bed/2.5 bath with loft, 2 car garage, fenced large patio/small yard (adequate for our dog). Asking price is about 660k. Walking distance to the elementary school, TONS of kids (our kids' friends) in the immediate vicinity. Nice community pool. My very social 7 year old daughter would be in absolute heaven, and my 9 year old son has plenty of friends there too. We would have so much more money available to travel (which we love) and retire well earlier than our previous target. We could retire without moving to a LCOL area, which is something I never thought would be possible.

So, we're running the numbers and trying to decide what to do. Moving will require substantial decluttering and downsizing of our stuff. There will be a big adjustment to the much smaller kitchen, but we can afford to eat out more which we both enjoy with so many great restaurants nearby, within walking distance since the townhome is a mile closer to the main shopping center than our current house. I've been talking to a friend of a friend who is a local well-known realtor and she's going to meet with us this weekend to discuss our wants/needs and see what else is out there if we decide we do want to wait for something closer to the 1800-2000 square foot size.

Anyone else have a downsizing with kids story to share? Any pros/cons/suggestions? We know financially it makes a lot of sense, and I don't REALLY care what other people think...but I am sure most of our friends and colleagues will think we've lost our minds. I just see it making our lives so much easier. We don't hire out home maintenance, so I spent most of Saturday cleaning and didn't even do floors. My husband spends so much time on yard and pool maintenance. If we move we could get rid of our lawn mower. We wouldn't have to change schools, and our 2 mile commute would become a 1.2 mile commute (an inconsequential change; we drive because we work together and come home to hang with the dog every day at lunch). Interested to hear thoughts/experiences from anyone else who has gone counter-culture and downsized with kids instead of upsizing!

I'm wondering if we might be neighbors.  If you've seen some of my other posts, I've been looking for opinions on this very thing.  I have a little more than $1M in home equity (home value is $1.6M-$1.8M and I owe $560K on the mortgage).  I live in a beautiful custom McMansion that I do NOT use, but my youngest is a social butterfly, and my house is always full of kids...it's my main reason for staying (the kids could easily gather in a smaller home, but I don't think my neighbors would drive them to our new home).  FIRE-wise...I could literally downsize tomorrow, and RE within 6 months!!!  If I stay put, I need to work 7.5 more years!!!!!

Here's what sticks out about your plan, that I sort of worked through also...the HOA for townhomes in my neighborhood are astronomical.  My idea (for myself) is to eliminate my mortgage debt and cut my property tax bill in half so that I can severely reduce my yearly spending.  By doing that, I could quit my job (eliminate w-2 taxes), and "live off of" LTCG...If I keep that under $50K per year, I pay ZERO taxes!!! (I'm Single/HOH).  Getting into an HOA situation is the main deterrent for me.

I'm looking in the older neighborhoods with 1200-1500 sq foot homes that do not have HOAs.  If the right one comes along in the next couple of years, I'll most likely execute my plan, and hopefully not scar my social butterfly too much by leaving the neighborhood friends behind.

So my suggestion is:  consider the move for sure!, but keep an eye on HOA and how that recurring cost might affect your yearly cost of living expenses.

Good luck!

[Just Joe]

We left behind a 1600 sq ft house and bought something bigger. Flyover country so what we bought is cheaper than HCOL townhouses mentioned here.

When the weather was good, the kids played inside and outside both. When the weather was poor and they were stuck inside - and they wanted to have friends over - they were limited to their bedrooms which was okay if they wanted to listen to music or play games.If they wanted to take over the family room - which was okay - DW and I were right there with them b/c our bedroom was the last place to retreat to.

Sometimes they just wanted separation from 'ole Mom and Dad.

When we retreated to our bedroom during foul weather sleepovers we could sleep on the bed, lay on the bed or sit on the bed. No space for other kinds of sitting furniture. We'd have to concede the house to the kiddos. We could sit in the kitchen too. Or the little dining room. Both were open to the family room. The porch wasn't an option if the weather was cold.

Also, sharing walls. Or floors and ceilings. Your noises and your neighbor's noises. The dog's noises. The kids' noises. Maybe the property is well built and noises are not an issue.

Storage for non-inside stuff. We store a fair amount of outdoor stuff - canoe, kayak, bikes, camping gear, tools. Can you fit your things into whatever storage room is available?

We are perfectly happy staying in a smallish townhouse on vacations (VRBO) but its easy to see the challenges if that was a permanent plan.

Good luck to you. If we lived in a HCOL area we'd prob be considering the same choices.

[partgypsy]

It's a good point that in a smaller home layout is more important. There should be both community/hanging out space, and also private -getaway space. Some of that private get away space can happen in bedrooms depending on space and how they are laid out.
In my house there are 3 bedrooms on one side, and then on the other side, a living room, study, and kitchen. What I did to make more useable space, was that I really decluttered and changed/reorganized the furniture. Previously the study was not very useable fly over space with a computer desk and couch but not much else. Now in addition to table and chairs in kitchen, there is a nice table in the study with settee and chairs. So if I have people over, there is more than 1 place for people to hang out. Oldest could be having friends over for a game night and hang out in study, youngest could hang out in her own room or have friends in the living room, and I could be hanging out in kitchen. The next step I am hoping to make, is re-organize my bedroom/bathroom, so that I create a laundry room accessible from the hallway, and I would have space for a better closet system as well as a spot for a chair and small table in bedroom. In turn, I want to at some point help my youngest de-clutter and free up space, so she has less toys stored and instead a chair/ottomans with small table for either drawing or hanging out. She is still attached to her toys, so I will wait until she is excited about redoing it.   

[Sibley]

Most practically right now - since you know you're considering moving, you need to slash the acquisition of stuff. If you don't have it to begin with, don't have to get rid of it later.

[mm1970]

I can't help much, except to give support.  I live in a 2BR, 1 BA, <1150 sf house with my 2 kids.  We love our 'hood and aren't moving. I've considered moving into a townhouse or slightly larger house in the next city over.  But the community here is so much worth it.

I think you'll be fine, but def consider layout.  Our kitchen is galley style, and it's fine.  I'd love a bigger kitchen.  But the house was built in 1947 and most kitchens in these old houses are WAY smaller and poorly laid out compared to mine.

[FireHiker]

First, I want to thank everyone for their considerate and thoughtful responses. We are thankful to be in a position where it is a choice and not a necessity, and we're still very much evaluating the pros and cons. A little more information and thoughts from the comments I've received thus far.

-Kitchen and eating out. Thanks @former player for your thoughts on the kitchen size. The reason I posted here and not in the kid section is because I was hoping for broader feedback including things that weren't specific to kids, so I really appreciate you chiming in. In a lot of ways the smaller kitchen will be more efficient, although the smaller storage is pretty awkward (specifically pots and pans will be the biggest issue). We have a giant island currently but it is an awkward shape so a lot of it isn't really useful much of the time. The smaller kitchen is still plenty big enough. My brother is a hobby gourmet chef and he makes amazing meals in his kitchen which is half the size of the smaller one we're considering. This concern is really more my husband's than mine since he does 95% of the cooking, often while I'm busy doing another chore in our giant house; in a smaller house I would probably share the cooking since there would be fewer other chores to handle. To clarify on the "eating out more" comment...it's not so much that we want to eat out with reckless abandon. It's more, if he wants a break, there isn't the guilt of "we shouldn't spend the money". We are pretty frugal in our eating out: we often split meals, hardly ever order drinks, go out for lunch more than dinner since it's cheaper. There are a few places we like within walking distance of the new place, with dog-friendly seating on the patio.

-HOA vs. property taxes...in our current home we pay approx. 18k/yr in property taxes and $90 for the community HOA. The new home would still have the $90 HOA plus another $210 for the townhome-specific HOA (common structure, pool, etc). The property taxes on the new place would be $9022/yr. It really hurt not being able to deduct all of the property taxes last year. Honestly, with the lower utilities, losing the pool maintenance, drastically lower yard maintenance, we would come out so far ahead despite the higher HOA.

-kids, space, etc. I think the layout would still enable everyone some private space/time when they need it. There are 3 bedrooms, the downstairs living area (which is pretty small and my biggest concern), and a loft which would be an office area where we could go if the kids were hanging out with their friends downstairs. Aside from the financial side, though, the single biggest advantage we see is the impact for our daughter who is 7. She is a social butterfly and is a child who just requires...more. There are NO little girls her age at our end of the neighborhood at all. In the new area we're considering (pretty much as far as you can get from our current house and still be in the same elementary school) there are SO many kids. Every time we go to her friend's house there, she sees friends she didn't even know lived there. They are in and out of each other's homes, not tucked away in their giant houses playing alone like where we live. She told me today that she would rather live in a smaller house and be closer to her friends and that she "doesn't care that much" about all of her stuff. Coming from my collector, this is huge! My 9 year old son also has friends in the area so I'm not concerned about him. His two closest friends are within walking distance of our current home but they never even get together outside of school. There would still be two living areas, upstairs loft and downstairs, so I think that's enough space to get away. We currently have a great room, office, "piano" room, playroom, loft, and everyone has their own bedroom. When my oldest (18) leaves for college across the country in August we'll have another unused room. He doesn't plan to move back home and says "do it"...his dad (we're divorced) has two spare rooms so if something happened he would still have a place to stay when he's here.

-space/outdoor stuff/townhome living. The weather is almost perfect most of the year here, so I'm not concerned about needing indoor space to get away/blow off steam during harsh weather. As for storage, there is a two car garage with enough space to store the things we need, and a giant under stairs storage where some of the stuff in the garage (camping/holiday) could go. I'm excited about decluttering all the excess crap we've accumulated though in our giant house. The fenced large patio/small yard is big enough to have a fair bit of seating for hanging out which is possible most of the year here. One of the things that has caused us to rule out other, newer townhomes we've seen (in addition to higher HOAs) is the short wall around the patio. This one has a high enough fence/wall to contain our dog and provides much more space for her. It's at a dead-end walkway so there would be no foot traffic; she barks at everyone who goes down the street currently. I do worry a little about shared walls, but I have several friends in the community and we've talked candidly about it. It doesn't seem to be too bad. The townhome is an end unit so there would only be one shared set of walls.

-financial...the primary motivator. We have always figured we would stay here and work until our youngest graduates high school and then sell and downsize to a LCOL area and retire. After running the numbers we're pretty sure we could shave at least 4 years off our plan, fully fund college for the younger two, and retire in place if we move. If either of us lost our jobs we could survive indefinitely on either of our salaries, which is not the case currently.

@SimpleLifer Ha ha, message me, we can exchange details if you want. If the HOA/property tax exchange wasn't so dramatic I would be more concerned about the HOA for sure. I've heard horror stories about how high they can be, but thankfully it's not bad for this development.

@Lichen For decluttering we currently use VVA for regular pickup. I've been on a decluttering kick for...a long time. My mom is a borderline hoarder and I am trying to reduce our stuff because it stresses me out. With such a large house things seem to accumulate easily without making the place look cluttered so I'm working my way through the cupboards and closets and drawers...it's laborious. For the nicer stuff and furniture I've recently gotten in touch with a local refugee group and was able to pass along some of the bigger stuff in good shape that VVA doesn't accept.

@mm1970 Thanks for the support; even without the downsizing element it's helpful to hear how things work with a family of 4 in a small space.

Anyway, we haven't made any decisions on making an immediate move to the place we saw last weekend, but we definitely know we want to downsize. I appreciate all of the thoughts you all have shared; I'd love to hear more if anyone else has things to consider that haven't been mentioned or their own anecdotes to share.

[Just Joe]

That's something to consider. Our smallish house was single level. With different floors, people are more separated for better or worse.

[partgypsy]

It actually sounds great, at the end of the street and an end unit is ideal. The one thing that pops in my head, how does this affect financial aid for the kid who is going to college? Every college evaluates financial resources differently, but it is consistent that equity in houses is weighed a lot less than cash in the bank. I almost hate to say this but I worry that downsizing now, would affect financial aid packages for your kid, not this year but the following year or years. The person to ask about this to know for sure is the financial aid office of your child's college. For later kids this shouldn't be an issue as you can roll the monies into a retirement fund which again is weighed much less than taxable savings accounts. 

[FireHiker]

It actually sounds great, at the end of the street and an end unit is ideal. The one thing that pops in my head, how does this affect financial aid for the kid who is going to college? Every college evaluates financial resources differently, but it is consistent that equity in houses is weighed a lot less than cash in the bank. I almost hate to say this but I worry that downsizing now, would affect financial aid packages for your kid, not this year but the following year or years. The person to ask about this to know for sure is the financial aid office of your child's college. For later kids this shouldn't be an issue as you can roll the monies into a retirement fund which again is weighed much less than taxable savings accounts.

Oh gosh, the oldest qualifies for no need-based financial aid. He does have a large merit scholarship from the private university he will attend which is not impacted by our finances. We make $$$ and we will be paying for college with our regular cash flow. By selling the big house and downsizing we would have all of his college expenses covered outright (we have the first year set aside in cash already; first semester payment is next month). Our plan would be to fully fund 529 plans for the younger two before pulling the FIRE trigger. We previously planned to cash flow for the oldest, then sell the big house and retire to a LCOL area, buying a less expensive home outright and paying for college (x2) with the sale proceeds. I appreciate your comment, though, in case someone else reads this and doesn't take it into account.

[partgypsy]

Awesome!

[Kronsey]

+1 for the family of four being able to live comfortably in 1600+ sq ft. Our home is right around 1700 sq ft, and about 100 sq ft or so of that is a separate office for me located off of the garage (I have to walk through the garage to get to my office).

I think we could live in a much smaller place, but we've found this size to be a good compromise (wife would probably prefer more McMansion size home). The one thing we do wish this house had was a separate half bath for guests to use when they come visit (which your condo does). She would like to be able to leave the kid's bathroom a mess and not have to deep clean when we have friends or family over :) We have two young sons who are pretty typical boys, so keeping their bathroom neat and tidy is a task. I just mention this to say that the half bath in the place you are considering may be a huge benefit that you might not have already considered.

It doesn't sound like it would be an issue for you, but the lack of yard space would be a deal breaker for us. We are on about 1/3 of an acre. That feels like plenty for me, but still feels cramped to my wife who grew up in the country. Our boys like to go outside and play, so a private yard is essential for us. Just something else to consider.

Off topic - but I'm always shocked in reading about the real estate values and property taxes for some folks. If I read your reply correctly, you will be spending roughly $1,052/month just on property tax and both HOAs if you move into the condo. My entire mortgage payment including escrow for taxes, insurance, plus our small HOA (under $300/yr) is $950/month (actually in the process of refinancing right now). I guess it is all what you get used to, but I think I would have a heart attack writing those checks (or seeing the debit) each month.

Best of luck with your decision. Keep us posted on how you decide to move forward!

[ysette9]

I think this sounds like a wonderful option and you would enjoy lots of quality of life improvements if you made the move. I likely would in your shoes as well if there were town houses in my area that were that much cheaper than SFHs.

[SunnyDays]

Don’t let a small kitchen stop you - use a hanging rack for frequently used pots and pans.  I would be more adverse to a townhouse just because of the two stories, unless you’re used to that.  I hate running up and down stairs and it seems like you’re always on the wrong level.

[ysette9]

But for kids carpeted stairs are So Much Fun! Especially combined with footed pajamas so you can more easily slide down. :)

[FireHiker]

Thanks for the additional comments! We already have a two story house; the biggest negative about the townhome is that the laundry room is on the first floor and I'm used to having it on the second with the bedrooms, but it's not a big deal. @SunnyDays Our friend who has the same floorplan uses a hanging rot for her pots and pans; she said it frees up a lot of space.

@Kronsey It is definitely a different world here...we currently pay 18k/yr for our property taxes (included in our $4145/mo mortgage which is a 30 year fixed at 3.25%) and another $90/mo for the HOA (in addition to the $4145). We're looking at an overall cash flow benefit of $3300/mo when things like maintenance and utilities are considered as well, closer to $5500/mo for the next few years since the proceeds would cover college for my oldest in full instead of having to cash flow it. To put it in perspective, though, we bring in 302k combined pre-tax so it isn't so much that we're stretched currently as it is that we want to accelerate our FIRE plan. We do max out everything (401k, HSA, flex spending for childcare). We are very, very fortunate. We have a large (for So Cal) yard with a big patio, grass area with playset, pool, and large bank in the very back. We are SO over the yard and all its maintenance. The kids don't use it anywhere near as much as I thought they would, although the pool is getting regular use again now that it's summer.

[mm1970]

But for kids carpeted stairs are So Much Fun! Especially combined with footed pajamas so you can more easily slide down. :)

OMG both my kids for awhile wanted to buy a bigger house so they could have stairs.  They love stairs.  When we visit grandparents they love going up and down the stairs (mostly the carpeted ones, not so much the hardwood).

[partgypsy]

A difference of 3K/month is huge!

[Villanelle]

Since this is largely a financial choice for you, I'll throw out that you might want to reconsider putting down $500k on a $650k house.  With interest rates so low, your money will likely work harder for you in the market.  You might also get better rates with a larger loan. 

I know the mortgage v. invest horse has been beaten well beyond death on these forums, but it's worth at least considering a lower downpayment.

[partgypsy]

But for kids carpeted stairs are So Much Fun! Especially combined with footed pajamas so you can more easily slide down. :)

OMG both my kids for awhile wanted to buy a bigger house so they could have stairs.  They love stairs.  When we visit grandparents they love going up and down the stairs (mostly the carpeted ones, not so much the hardwood).

OK, so my kids aren't weird either. They think houses with multiple floors is superior as well. When we visited the grandparents when first born was a toddler and they were living in house with stairs, she loved going up the stairs, and then down the stairs on her butt.

[SunnyDays]

They think houses with multiple floors is superior as well.

Wait until they’re older and have decrepit knees, then they won’t think that!

[meandmyfamily]

Sounds like an excellent plan!  We live in a 2156 sq. ft home with 4 kids and we only use 3 of the bedrooms with the 4th as an office/guest room.  We have a smaller rental that we may move into in the future as the kids leave.  There is so much less maintenance, yard work, taxes, cleaning etc.  I am betting you will be really glad you did especially if you can travel more and retire earlier!  More family time!

[MonkeyJenga]

They think houses with multiple floors is superior as well.

Wait until they’re older and have decrepit knees, then they won’t think that!

Or until their older sibling pushes them down the stairs.

FireHiker go for it! I grew up in increasingly giant houses, and a lot of it was wasted space. Being able to retire in the area you've built your social network is pretty valuable. I'm excited for you!

[FireHiker]

Thanks again everyone! It does look like we will downsize, but we aren't 100% sure that the place on the market is definitely the one we want...there are a couple of key specifics that are less than ideal for us. We're meeting with a realtor this weekend to discuss further. I would prefer to only move with kids once more, so we want to be sure it's really the right place for us and not just the first one on the market. Whether we do jump on it or not I'm really glad we have considered it because it made me really run through all of our numbers and we've had some really good discussions on our priorities. It is no longer a question of if, but when.

I really appreciate all the feedback here. In the meantime I will be focusing a lot of my energy to really downsize all of our stuff so that the move, whether it's in a month or a year or two, will be less painful. We've done a pretty good job on reducing the general influx of stuff over the last few years, but there is so much accumulated stuff from when we combined our two households, things the kids have outgrown (clothes and toys), etc.

[crispy]

We did this in 2015 and are so happy we did. We went from about 2800sf  to 1500st (andlater finished a small playroom over the garage). It was a good move for us. Financially, we are now mortgage free plus we save on taxes, utilities, home maintenance and HOA fees. My stress level has been tremendously. Our current house is just so much easier to keep clean so we save a lot of time and energy.

This definitely isn't for everyone, but I now del like I own a house instead of the house owning me.

[FireHiker]

If you have a group in your area, Buy Nothing (which is Facebook based) is a great place to get rid of unwanted stuff.

Oh gosh yes, I'm active in our Buy Nothing group and I have gotten rid of a bunch of stuff there. Between Buy Nothing, VVA, and a local refugee assistance group (for bigger furniture) I should be set with donating!

[ambimammular]

My kids (8 and 10) hear us talk about downsizing or long term traveling in ER, and are desperate to keep a lock down on the house. It's the only one they've ever known and our oldest is very sentimental. They want their rooms to become shrines. Good luck with that kids

[partgypsy]

I have kids and the youngest especially is very sentimental, would never want me to sell house.  It's 1500 sq feet and when married, bought in a price range could be paid for just on my salary. So no plans at this time

[happy]

I think the main point I wanted to make has now already been said:  the floor plan becomes much more important but 1500-1600 sq ft with kids is perfectly possible and comfortable: I did it for many years. I upsized to a clown house 2600sq ft because I wanted a spare bedroom for my ageing parents to be able to stay in, and a closed in garage rather than the carport I had ( couldn't be closed in). Ended up with a house with a much more efficient floor plan, and tons of storage. The double garage was useful but otherwise we ended up with 2 extra furnished rooms that were almost never used and and extra bathroom, also almost never used. It was a lovely house, and I did love it, but way more than we needed.

I've narrowed down what is important to me with a family: 3 br, 2bathr, open plan kitchen/dining/ living, a second living area, a laundry and a weatherproof garage. Somewhere in one of the rooms I need a study nook, and a place to keep the ironing board up, since I never put it away and don't want it in the main living area. YMMV.

[Gray Matter]

We downsized last fall, partly out of necessity and partly because I wanted to.  (I had quit my job to go back to school full-time, and then DH got laid off.  We had plenty of non-retirement savings to tide us over until he found a new job, but the stress of it was too much for me, and it was hard on our marriage, too, so we decided to sell.)

We downsized from a 2500 square foot house with an additional unfinished (but useable) basement and attic to a 1600 square foot house with a basement but no attic.  Our old lot was 10,000 square feet and our new one is 4,000.  We were able to turn the equity from our old house into the new one, and with a little extra from DH's severance, we have no mortgage.

We have three kids:  12, 14, and 16 at the time of the move.  Our old neighborhood was too expensive (mostly white-collar professionals), so we moved to a more modest, but still nice and safe neighborhood, about 2 miles closer to their high school (although still not within walking distance).

I love, love, love not having a mortgage.  I know it's financially smarter to have a mortgage and have that money invested, but we didn't have that option since we had no income, and the peace of mind I feel is definitely worth the forgone returns.  Our monthly bills are just over half what they were before, so I don't worry about DH losing his job and my having to drop out of school.  We have more flex money for things like eating out (which we like to do) and travel.  Our taxes are less than half what they were, our heating bills are one-third what they were, our insurance is one-third what it was, it's cheaper to maintain.

This was an excellent move for us.  For one, I like living in a more modest neighborhood and house--I think it's good for our kids, as we were living in a bit of a "bubble" before.  I love that I don't love this house (my other house was my dream home, and my identity was pretty wrapped up in that), that it's just a place to live.  Increasingly as kids age, our life is outside the house, so we just need to be warm and comfortable and dry.  I even love that I don't really want to entertain in my new house, because it's too small.  (We used to entertain a lot in our old house, but what a hassle--a full day spent cleaning, menu planning, grocery shopping, cooking, entertaining, doing dishes...).  Now we meet people at restaurants and it's lovely (and I don't think it's much more expensive, honestly--we used to spend a lot on food when entertaining).

So...yeah.  I am glad we lived in that other house for 15 years.  We did a hell of a lot of living in that house and we have wonderful memories.  And I'm glad we moved.  We got rid of about half our furniture and probably two-thirds of our non-furniture stuff, and boy, does that feel good!  It's grueling, but so, so worth it.

The only small regret I have is that we couldn't afford to buy first and then sell, so once we had an offer on our house, we were scrambling to find a house in a hot market, and had to compromise more on location that I wanted to.  That means we will be moving again once the kids are out of the house and we no longer need 4 bedrooms, but that's OK.  I kind of like living in a house that I know is temporary (5-10 years).

[Linea_Norway]

We downsized last fall, partly out of necessity and partly because I wanted to.  (I had quit my job to go back to school full-time, and then DH got laid off.  We had plenty of non-retirement savings to tide us over until he found a new job, but the stress of it was too much for me, and it was hard on our marriage, too, so we decided to sell.)

We downsized from a 2500 square foot house with an additional unfinished (but useable) basement and attic to a 1600 square foot house with a basement but no attic.  Our old lot was 10,000 square feet and our new one is 4,000.  We were able to turn the equity from our old house into the new one, and with a little extra from DH's severance, we have no mortgage.

We have three kids:  12, 14, and 16 at the time of the move.  Our old neighborhood was too expensive (mostly white-collar professionals), so we moved to a more modest, but still nice and safe neighborhood, about 2 miles closer to their high school (although still not within walking distance).

I love, love, love not having a mortgage.  I know it's financially smarter to have a mortgage and have that money invested, but we didn't have that option since we had no income, and the peace of mind I feel is definitely worth the forgone returns.  Our monthly bills are just over half what they were before, so I don't worry about DH losing his job and my having to drop out of school.  We have more flex money for things like eating out (which we like to do) and travel.  Our taxes are less than half what they were, our heating bills are one-third what they were, our insurance is one-third what it was, it's cheaper to maintain.

This was an excellent move for us.  For one, I like living in a more modest neighborhood and house--I think it's good for our kids, as we were living in a bit of a "bubble" before.  I love that I don't love this house (my other house was my dream home, and my identity was pretty wrapped up in that), that it's just a place to live.  Increasingly as kids age, our life is outside the house, so we just need to be warm and comfortable and dry.  I even love that I don't really want to entertain in my new house, because it's too small.  (We used to entertain a lot in our old house, but what a hassle--a full day spent cleaning, menu planning, grocery shopping, cooking, entertaining, doing dishes...).  Now we meet people at restaurants and it's lovely (and I don't think it's much more expensive, honestly--we used to spend a lot on food when entertaining).

So...yeah.  I am glad we lived in that other house for 15 years.  We did a hell of a lot of living in that house and we have wonderful memories.  And I'm glad we moved.  We got rid of about half our furniture and probably two-thirds of our non-furniture stuff, and boy, does that feel good!  It's grueling, but so, so worth it.

The only small regret I have is that we couldn't afford to buy first and then sell, so once we had an offer on our house, we were scrambling to find a house in a hot market, and had to compromise more on location that I wanted to.  That means we will be moving again once the kids are out of the house and we no longer need 4 bedrooms, but that's OK.  I kind of like living in a house that I know is temporary (5-10 years).

Congrats on making such a good economic choice that is also good for your mental health.

[FireHiker]

@happy Our criteria is particularly similar to yours, aside from the ironing board!

We took the kids to see the smaller home over the weekend and they were both totally okay with moving. Right now it looks like they already have an offer, and we are not quite ready to list our place, so I don't think this specific home will happen. However, we had a really productive weekend meeting with one of the top two realtors in our community. She actually brought a potential buyer over yesterday afternoon, but the buyer complained to her that the bedrooms were "too small." They're not likely to find something with all of her requirements in her target price range, so who knows if something will come of that at some point. We busted our asses to pick up the house and clean things that haven't been cleaned in ages, and now everyone is excited to keep things tidy and keep decluttering the stuff so that we are ready to move when the right home comes on the market.

@Gray Matter I'm really glad that you were able to make things work with your change in circumstances through your downsizing as well. Thanks so much for sharing your experience. I can't wait to get rid of "half the furniture and 2/3 of the rest of the stuff" ourselves...it would definitely be grueling, but I can't wait to have it done. It actually sounds like your previous circumstances were very similar to our current ones. We live in an expensive, white-collar professional (which we are) neighborhood, and have the giant entertaining house. If there's a family event, we almost always host it...shouldering the bulk of the expense. We like to (occasionally) eat out and love to travel too. And I definitely agree...with what we spend on groceries to host social events at our home it would definitely not be more expensive to eat out a little more and no longer be the social hub.

I'm not really sure how things will shake out with timing, but everyone is motivated to keep the downsizing process underway. Now we need the timing to align the right buyer for our home and the right downsized home for us to buy. In the meantime, I sure like my current house a lot more now that it is tidy and clean. I just don't want to spend all weekend every weekend keeping it that way.

[FireHiker]

Replying to my own post but...we may actually make an offer on the smaller place. It turns out the seller doesn't want to move until late August anyway, which would be the earliest we could conceivably do it anyhow. I am excited and I feel like I'm going to throw up!

[Gray Matter]

...I am excited and I feel like I'm going to throw up!

Yep--that sounds about right!  Good luck!

[roomtempmayo]

we currently pay 18k/yr for our property taxes (included in our $4145/mo mortgage which is a 30 year fixed at 3.25%) and another $90/mo for the HOA (in addition to the $4145). [...] To put it in perspective, though, we bring in 302k combined pre-tax so it isn't so much that we're stretched currently as it is that we want to accelerate our FIRE plan.

It may not seem like anything is burning down right now, but by my math you're paying 6.3% of your gross to the government and the HOA just to occupy that spot of ground.  In California, that might be more than 10% of your post-tax income.  If I were in your shoes, I'd be running from a three alarm fire.

[FireHiker]

we currently pay 18k/yr for our property taxes (included in our $4145/mo mortgage which is a 30 year fixed at 3.25%) and another $90/mo for the HOA (in addition to the $4145). [...] To put it in perspective, though, we bring in 302k combined pre-tax so it isn't so much that we're stretched currently as it is that we want to accelerate our FIRE plan.

It may not seem like anything is burning down right now, but by my math you're paying 6.3% of your gross to the government and the HOA just to occupy that spot of ground.  In California, that might be more than 10% of your post-tax income.  If I were in your shoes, I'd be running from a three alarm fire.

Well, yes, that's why we're downsizing. I'm not sure where you are located, but in my part of California it is not uncommon for people to pay an obscene percentage of their income for housing. We do have an almost 7 figure NW not including our home equity (pushing 1.6M with our home equity included) and could lean-FIRE today if we were willing to relocate to a LCOL area.

We bought our current home in 2012 well before being made aware of the FIRE concept while we were still climbing in our careers and "keeping up with the Joneses". We've cut a LOT of our spending in the last few years and maintain a savings rate over 40%, but the house has been the single biggest expense. We've been thinking about downsizing for awhile, and always planned to sell and retire when the youngest graduates high school (she is 7). We have an enormous amount of equity (getting close to the point where we'd have to pay capital gains) and even after putting a generous downpayment on the smaller home we'll have a non-trivial amount to invest in non-401k funds, and our home expense will cut in half.

It's so overwhelming though; both of us have been up since 1:30am, unable to fall back asleep. It's going to be a LONG day. It's amazing to me how the kids are so excited. They really don't need the giant house we have. They need the time with us and the community with their friends so much more. I really feel like it's the right decision, but I am NOT excited about the effort that will go into the next few months while we make it happen.

My husband hasn't really spent any time here on the forum, but evidently I talk about it a lot. He made a comment this morning that we'll actually be "really mustachian" now. Um, I'm still not biking to work, so, no. But it's certainly progress. :)

[Aelias]

It may be a little premature, but congrats @FireHiker !  Trading in square footage for a better lifestyle and more stash strikes me as a great deal.  And it's so awesome that your kids are excited about it -- a compliment to you as a parent.  Enjoy that right-sized space and community pool (seriously envious).

[ysette9]

Replying to my own post but...we may actually make an offer on the smaller place. It turns out the seller doesn't want to move until late August anyway, which would be the earliest we could conceivably do it anyhow. I am excited and I feel like I'm going to throw up!

That is super exciting! Fingers crossed for you.

I’d love to see some photos of this place if it ever works out to share.

[FireHiker]

Replying to my own post but...we may actually make an offer on the smaller place. It turns out the seller doesn't want to move until late August anyway, which would be the earliest we could conceivably do it anyhow. I am excited and I feel like I'm going to throw up!

That is super exciting! Fingers crossed for you.

I’d love to see some photos of this place if it ever works out to share.

I'll send you a message with the link; I'm still trying to be quasi-anonymous here since it's a public forum and I'm not retired yet. ;)

[ysette9]

Totally fair.
And “no” is a legit answer also. :)