When does the need for a stressfree lifestyle trump common financial sense?
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| Wed, 09-19-2012 - 9:56am |
Let me explain :
I own a house in a very high priced city. We are ranked in the top 3 best places to live in Canada and the median home price here is around $300K (to give you an idea, there is not one home/condo/apartment for sale in this city less than $130K).
I bought my home for $328 and invested probably $20k into it rennovating and doing the furnace. I still need to do a bathroom, recarpet a room and paint. I had it valued and they think I could get somewhere around $380-$390 for it since I am in a perfect pricepoint (starter home with great property).
The problem is this: I can't keep up with the house. I am single, work 70-80 hours a week with two large dogs and I am having huge issues trying to keep up with basic maintenance and gardening. I have resorted to hiring someone to do it fore me (it doesnt' help that I am allergic to grass and when I cut it I swell up like a balloon, even with my anthihistamine). The layout of the home isnt' very workable for me either, but I can deal with it for a while.
So here is the issue:
There is a new build happening in my city down by the waterfront. There are only 50 townhomes available and they will be previewing in the next few weeks. They start from the mid 300's and I have no idea how long the build would take (I would guess at least a year). I am seriously considering buying one. Here is my pro and con list:
- Pros: Brand new home in great location (less than 5 minutes to the lake and the shops in the city)
- Towhhome with no maintenance (there is a small maintenance fee of about $70 a month for landscaping, snow removal etc)
-Assuming I increase my mortgage to $350K (just to be on the high side) the weekly payment is the same as what it was in the beginning of the year so I know I can carry it
- Likely lower property taxes because its a townhome (TBD)
- Better chance for increasing value due to location (not banking on it)
- Have about a year to save/ pay down debt/ move (possibly more)
- Spoke with some agents and if I wanted to rent out the place, the townhome woudl be easier then the house.
Cons:
- Have to move
-Bigger mortgage
- Will need to invest about $5k to get this house ready for sale
- No guarentee what I will walk away with
- Will lost ~ $20K immediately due to real estate/ lawyers fees
- Will need extra $ to pay for things like central air/ blinds that do not normally come with new builds.
- Will increase the length of my mortgage slightly.
I can see from this list there are more cons than pros, but I'm going to be honest, I'm really considering this. The idea of living in this location is amazing (I drive down there on average 2 times a week to walk the dogs along the lake) and the fact that it will be so much more suited to my life is really making me wonder . . .
Okay folks . . . give me opinions, good bad or otherwise!
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Bex, Bex, Bex.....
There you go changing things again! You just got settled!
More importantly, how are things going with the BF? Are you considering kids? A house is better for that and for two large dogs.
I don't like this idea. Get BF to move in and mow your lawn. and 70 to 80 hours a week is way too much. But you already know that.
$20,000 to make a move would pay off most of your debt.....You are paying for a quick fix. Don't be so reactive. Be proactive, think future.
Again, don't like it. But that is just me.
My first thought is: your home does not suit your *current* lifestyle. Do you see yourself living this same lifestyle (working a lot, single) for at least 10 more years? Or do you see yourself settling down, getting married, having children? needing more space, a backyard (what you have now)?
what about if your BF moved in with you? Would that solve some issues? Is that in your future?
what about the dogs in the city? They would be housebound until you took them out, as opposed to just opening your back door and letting them in the yard by themselves to play....
I know you are a smart girl and you always think through your decisions. whatever decision you make will be the right one.
http://www.TickerFactory.com/savings/
I don't think kids are in my future either. I've never wanted them and I've never had that maternal drive. Maybe this will change, but who knows . . .
Bex -
I agree with happys that it is perfectly fine to pay someone to do basic upkeep and maintenance to your house. And with a house, you have complete control of how much you want to pay and get done.
In a townhouse situation, there are so many things that can go wrong with the maintenance fees. The developer may (and often do) under-budget to make the property appear more attractive in price. A poorly constructed portion of the building may require major maintenance sooner than expected and could result in an expensive assessment. You can inspect every centimeter of your own individual unit to make sure it is fine, but if a bad roof from the opposite side of the same building is falling apart, you could still responsible for part of it.
Also, when you are working 70 - 80 hours a week, you don't need to deal with stupid homeowner association issues, especially with two large dogs. I bought my loft pre-construction and the rules allowed two dogs per unit. Then a psycho woman became the president of the homeowner association and wanted to ban dogs. We managed to vote her out so all is fine for now. But things like that just zap your energy.
What if you put the difference between your current mortage payment and the projected payment and maintenance fees for the townhouse in two accounts, one for future renovation and one for current maintenance? Would that be sufficient for re-doing the bathroom and the other room and enough to pay someone to do on-going upkeep?
Don't take this the wrong way but I had to chuckle at your post! I live in Canada too but our average home price is $750K. I'm sure someone out there claims it's a great place to live too...but I digress...
If I were you, I would sell the house. If you are not enjoying it's benefits (the yard, the space, etc) than why are paying so much to live there? (what about 1% realty instead of paying $20K).
I personally would probably look at renting and investing whatever I have right now. Our market is SO uncertain for a number of reasons. If you don't want to rent - then why not a condo? Upping your mortgage to $350K sounds like a LOT for one person...unless you make over $100K. Mortgages shouldn't be more than 3X your annual income. At 3.19%, that payment is $1690. But what if interest rates rise? Can you afford $2035 at 5%? $2671 at 8%? Interest rates are at historic lows...no guarantee they will stay that. I do think they will stay relatively low as the US inflates its debt away...but we have seen 18% mortgage rates in the '80s so 8% is still historically low.
Dee
Sorry for more giggles here, Bex. I also thought this was going to be about working less hours and making less money.
Okay, so at first I thought "sure, I could see a young professional woman living downtown by the water in a townhouse or condo." Then I read the replies and thought well, yea...two dogs, eventually marriage and kids, keep the house.
So then I see you don't really see kids in your future, and I go back to the townhouse/condo again.
I have never lived within any kind of association, but I have heard of similar stories told here of problems that can occur. I also know that where I live, there was (for some, unknown reason to me) a spurt of high end apartments/condos built (I guess that is what you call them. Fancy apartments in a building) and as far as I can tell, the vacancy rate is high. One building can't even hardly give them away.
But really Bex, if we look at your topic "stressfree lifestyle," I am unclear how this move would make your life less stressful. You are already paying for someone to take care of your yard, you would not be working less hours, and I would think the dogs would be harder to care for in a townhouse. So if stress free is your motive, I don't see it.
If your goal is to not be a homeowner and let someone else put out the money to fix things, etc. then sure, I could see that making a big difference. If you were wanting to downsize and spend less money, I could see that. If you were wanting to save an hour long commute, I could see that.
So Bex, is there more to the story? Is really about stress or is it that you simply would prefer to live somewhere else?
Suzie Orman suggests living BELOW our means. Just because we can "afford" $$$$ mortgage, doesn't mean we should.
What ever you do, or don't do, just be careful entering something sort of unknown. Not just a house you have never seen, but an entire area. Have you ever seen one lonely house on a street waiting for the rest of the lots to be sold? Will you be somewhat alone if the other townhomes take a while to sell? I really don't know much, but just some things to consider.
I think I am going to keep my internet provider because I don't think the bother is worth the little bit I would save. Just how I am. I do envy you for being so bold as to even consider this and not be afraid of change.
The $20k you would loose in realty fees could pay for a maid and landscape help for quite a while, won't it?
You have been talking about renting out part of your home for some time anyway, so maybe it is too big?
But you tend to go from thing to thing, so be sure this is what you really want to do.
I am thinking with your work schedule, a home might be more than you really want to deal with. Why not rent something instead?
Personally I want to say go for it, I would!!
LOL
Good for you for NOT having your BF move in with you to save money. I think it is a bad idea just to do it for that reason and I was quite surprised to hear it a few times (and for him to take care of your place/lawn....your dating, that would lead to resentment and it is not his "problem" it is yours...I know that sounds bad, I hope you know what I mean). I think you should follow your heart on what will make you happen longer term. I wish you the best with the BF
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