Would you go for it?
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| Thu, 08-04-2005 - 2:05pm |
Hi all~ Just wanted some opinions here......
If you were given land for free(2 acres) in an area that you absolutely loved ~ would you go ahead and build a home there even though the property taxes would be around $5500 per year? (The first 2 years are tax exempt for new home builders- so we could put that money away)
We could afford it- but it's the "sticker shock" that kills me. We live in town now so it's really cheap (taxes are $1300/year)~ but we HATE everything about it. I've paid so many bills off just to get out of here, so staying isn't an option. In the country the taxes are around $4000/year.
All of the (decent) houses in that area cost more to buy($150K+) than the split level we want to build($135K)! We were told by the assessor that when you build your taxes are higher than buying (even if the older house is bigger/cost more)
Would you guys go for it? Land around here costs $40K for less than 2 acres. So it's hard to pass it up!!
Nicki

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If you can afford it without a strain, I would say go for it!! Eventhough we have great neighbors(most of them)I hate living so close. 2 acres would be great.
Dana
Less then $40k for 2 acres? Wow thats cheap... Where are you located?
I would take it even with the property taxes at $5500, (which in MD, would be a bargain) I pay $3000 in a rural town for less then .52 acre. And if we were to go buy a 2 acre lot in our current zip code would be about $200,000!
Shannon
Shannon
It sounds like a dream come true. I don't see any real reason *not* to do it. Remember, we are not our debts. Remember to go ahead and live your life, as long as you're taking responsibility. Don't deprive yourself just because you still have some debt.
We bought our gorgeous house over a year ago, though it set us back on our debt repayment plan, and we wouldn't change it for anything. Yeah, it'll take us a couple extra years to pay off our debt. But in the meantime, we're HAPPY. And that's priceless.
First, as I'm sure you already are or are planning to, work your budget out very carefully, leaving a generous budget for moving expenses and extra "hidden" costs (like buying drapes and flooring and landscaping--niceties that "used" houses come with but "new" houses have to have added). And if it still looks doable and you can still meet your obligations, I say, "Do it."
Another option to consider is to build something very small just for a few years until your budget can more comfortably afford your dream house. Then use the small building as a guest house. Or put a trailer on the property (if that's allowed) until you're ready to build. Just a few possibilities.
Anyway, congratulations on the great offer. Good luck!!
Heather
Go for it--if it will truly make you happy. You say you aren't happy living in town, then I would take the free land and be happy. Me I would LOVE to live on two acres. Over the last 7 years I have lived in 2 apts., 1 duplex, a triplex and am now living in a 4 plex. All I want is a single family home not connected to anyone else's house. So, I say do what will make you happy. And you never know. Once you are happy in your home, the debt will probably take care of itself.
Kellie
Thanks for your reply!~ Nicki
Thanks for the nice replies! I indeed have worked on a new monthly budget Heather. It would go something like this:
New mortgage $800
Property taxes/Ins $500 (taxes Not due for 2 years under states new builders program, will use this money for some house items for a few months then save it for when they are due)
DH student loan $100
Groceries/paper goods $450
Utilities(high estimates) $350
DH cell $30
Internet $13.95
Cable $54
Life insurance $48
Car insurance $125
Total $2470.95 DH's checks will cover this, gas money for vehicles, and his "allowance". There is already money deducted from his check for 401K.
My waitress money is all extra and will be used as follows~
First off I will pay off my student loan of $3500 in a couple months.
THen:
Strict savings/retirement funds $400
Spendable savings (christmas, repairs, emergencies) $200
Extra principle on new home $200
Fun money $200
Extra on DH student loan $100
KIds college fund $100
Right now it's all save save save. We will payoff our Durango with the sale of our current home so I didn't include that or my student loan in the new budget.
We don't want too big of a home because of the high taxes and it's just too pricey. THe split level is actually a modular home put together in sections. (It's getting very popular here.)You can save a lot of money and time that way. Plus dh wants a separate big garage. So it adds up fast. But yes, we could always add on later Heather.
Thanks again I feel better now, It's just hard jumping from $475 total mortgage/taxes a month to about $1300!!!! OUch!!! Nicki
This looks like a terrific plan, Nicki. Congratulation and good luck!
Yes, we freaked a bit at going from $580 a month rent with low utilities (water was paid for, electric very cheap because the apartment was very efficient) to almost $1000 a month and much higher utilities. It seemed like such a huge jump.
But we've been amazed at how easily we've fit within our new budget. For one thing, we love where we live so much, we don't have the "wanderlust" that used to cost us a lot of money. Also there are tax savings, and savings related to the fact that I can store a lot of food and thereby stock up when things are cheap, and we can save a lot of materials and use and re-use things because we aren't as limited for space, and so on. And we're just plain happier, so we don't mind things being a bit tight.
One thing we did, was for several months before we moved, we went ahead and lived within the "new" budget, to make sure it would work for us. We took all the money that would soon be going toward mortgage and extra utilities and put it in a savings account. That's what we used for our closing costs, and we learned along the way that we could manage within our new budget. It helped us feel more confident.
Anyway, I highly recommend it. If you're going to be happier in your new home, and you're excited about it and, as it seems you have, you've done your homework (not only financially but also on the housing market and your personal housing preferences--which, as I said, it sounds like you already have), then I think it's time to go for it.
Many blessings,
Heather
All my best,
Danni
Yes, and not just because that's about what we pay now (although our value is more too)
ALL houses are perioudically reassessed. Around here it's about every 5 years. I think it will all balance out with the older houses, esp. with the two year grace period. AND it's important to have a house you love.
You can also challenge an assessment for being too high if you find too large of discrepancies going on in your area.
Good luck!
My husbands company is out of Pittsburgh. We will be up there on Dec 10. Now I understand why the owner does not get why my husband constantly asks for raises. Its cheap to live up there.
Shannon
Shannon
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