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To little house

Old 04-14-2008, 08:10 AM
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You will sometimes hear people say that they bought to much house or that they are house poor. Do you guys think that you can buy to little house? I know that you can get a "cheap" loan on your home and when or if you sell your home the gain is tax free up to 500k but I wonder if you might miss out on better oppurtunities and enjoying everything else with a larger home than if you lived in a comfortable but smaller home. Its not just the cost of the home either, its the maintiance and up keep, cleaning and remodeling, utilities and furnishings and of course the time robbing honey do's.

I can not say that I really love my house and my wife and I do not do a lot of entertaining and when I have free time (if I remember what that is) I never decide to stay at home and enjoy my home so why am I working to buy a bigger one? Anyone else have a good reason to justify or condem buying a smaller house.
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Old 04-14-2008, 08:20 AM
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I guess it depends on your stage in life, needs and what you value. If you are still raising kids, a larger home may be needed just to keep your sanity. Or, if your the type that loves to entertain and have house parties, than maybe a large showplace is for you.
But, if none of the above applies and maybe you would rather spend weekends on the boat or at a vacation home, than a smaller house with less maintenance would be better.
Sometimes bigger is not better.....
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Old 04-14-2008, 08:30 AM
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With our third child we effectively out-grew or home. Becuase of the property tax issues in Fl. it would have cost us 10-12K a year to sell and move to a larger home. We put a 900sq.' addition on our existing home. id di it woner builder and it still cost about $25,000 MORE than we the total we originally paid for the house and property.
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Old 04-14-2008, 08:47 AM
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Default Re: To little house

baitkiller - 4/14/2008 11:30 AM

With our third child we effectively out-grew or home. Becuase of the property tax issues in Fl. it would have cost us 10-12K a year to sell and move to a larger home. We put a 900sq.' addition on our existing home. id di it woner builder and it still cost about $25,000 MORE than we the total we originally paid for the house and property.

We are in the exact same boat as you. We need to either add on this year (1000 square feet) or sell and buy another home.
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Old 04-14-2008, 08:56 AM
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I feel very much like you do, bsmit24. With the interest rates where they are, and the housing market in what I would consider a buyer's market, I have been looking at homes with a real estate agent lately. My plan is to sell my current home, which is finally paid for, and downsize. No need for all the room, or maintenance, and I can invest the difference in some fairly safe investment vehicle for harder times.

I see no problem with your line of reasoning, especially if it makes sense to you and your wife.

Good luck.
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Old 04-14-2008, 08:59 AM
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bobb - 4/14/2008 7:20 AM

If you are still raising kids, a larger home may be needed just to keep your sanity. Or, if your the type that loves to entertain and have house parties, than maybe a large showplace is for you.
Lol, I have a small shed in the back yard that is currently filled with junk. I keep telling my wife that I am going to make it my "Serenity Shack". My own personal retreat to escape the ills of excess estrogen exposure.

I am sure that there are some people that truly enjoy entertaining and a large home but my wife and I still have "junk" in storage after five years because our home is not large enough store everything so she wants a larger house. I believe that if we did not need it in the last five years then we will not need it in the next 5 or 50, it is just junk. I have come to consider unnecessary possessions as unnecessary burdens and wish to simplify and enjoy life.

I started to rant above but I was trying to get more of a financial answer analysis of the trade off.
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Old 04-14-2008, 09:04 AM
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bsmit24 - 4/14/2008 8:59 AM

bobb - 4/14/2008 7:20 AM

If you are still raising kids, a larger home may be needed just to keep your sanity. Or, if your the type that loves to entertain and have house parties, than maybe a large showplace is for you.
Lol, I have a small shed in the back yard that is currently filled with junk. I keep telling my wife that I am going to make it my "Serenity Shack". My own personal retreat to escape the ills of excess estrogen exposure.

I am sure that there are some people that truly enjoy entertaining and a large home but my wife and I still have "junk" in storage after five years because our home is not large enough store everything so she wants a larger house. I believe that if we did not need it in the last five years then we will not need it in the next 5 or 50, it is just junk. I have come to consider unnecessary possessions as unnecessary burdens and wish to simplify and enjoy life.

I started to rant above but I was trying to get more of a financial answer analysis of the trade off.
Craigslist my friend. I have sold so much of that crap that takes up room in my garage that it is not even funny. It is amazing what people will buy.
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Old 04-14-2008, 09:20 AM
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We finally pulled the trigger this last year and put a "two car garage under a master suite" addition on our home. We also renovated the existing first floor interior to open up two smaller rooms into a large living room area. Factors in making the decision were: We have two small children (5 and 7) and the extra room was a big plus, I really wanted a garage, she really wanted a "master suite" - separate from the rest of the house - which really does give us a nice buffer, and probably the biggest thing - we live in a nice area and don't want to leave. We bought our house 9 years ago, just before everything went through the roof in value and price in our area - so we were lucky with that. We could not afford to buy a larger house in our area today, so we opted to add on. The key is we had a lot of equity in the house, so even if we had to get out tomorrow, we would not be "upside down" on the investment. It's been about 4 months since we completed the project, and we are very happy with the results. Lots of work and a big decision to finally "pull the trigger" - but for us it was totally worth it.

Good luck with whatever you decide to do.

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Old 04-14-2008, 09:34 AM
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I live in a house that is considerably smaller than the type I can afford....I always have and I always will. Everything is relative.
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Old 04-14-2008, 09:42 AM
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Gravy and SweetD are right on the "money". Get rid of what you don't need and with some properly planned additons to your existing place, itwill make it feel like NEW!

I got stuck w/ most of my parents crap after they passed in '99 and STILL haven't unloaded all ofit yet. They were both consumate hoarders and I am so afflicted , IF it hasn't moved in 5 years let someone else enjoy it! Let the yardsales begin!

I design alot of additons and hopefully this economy will be a boon for me. [img]../images/emoticons/biggrin.gif[/img]

As toBIG houses, I'd live on a boat if I could. I likethingsnice and cozzy, everything within arms reach.[img]../images/emoticons/thumbsup.gif[/img]
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Old 04-14-2008, 09:57 AM
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House or boat buy what you can afford and enjoy it. I think nationwide we will see a trend toward houses with lots more character and less square footage. The average new home size grew sizably over the last 15 years and now the McMansion owners aren't so sure they can heat, cool and properly maintain them. A quick look around here and the houses that are selling briskly are modest homes in desirable locations. Buying a home that you can easily afford allows other investment opportunities. Most CFP's will argue that a home really isn't an investment at all but simply a place to live, since you are bound to live a long time and will always need a place to live your money needs to also be placed in real investments earning consistant and real returns.

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Old 04-14-2008, 02:13 PM
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Thanks guys. I am going to have to see how much junk I can get rid of this spring. I will have to see how receptive my wife is to a more simplified life.

I thought that this was interesting. Average household size in the United States has dropped steadily from 3.67 members in 1940 to 2.62 in 2002. The average size of new houses increased from about 1,100 ft2 in the 1940s and 1950s to 2,340 ft2 in 2002.

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Old 04-14-2008, 02:42 PM
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bsmit24 - 4/14/2008 4:13 PM Thanks guys. I am going to have to see how much junk I can get rid of this spring. I will have to see how receptive my wife is to a more simplified life. I thought that this was interesting. Average household size in the United States has dropped steadily from 3.67 members in 1940 to 2.62 in 2002. The average size of new houses increased from about 1,100 ft2 in the 1940s and 1950s to 2,340 ft2 in 2002.
And the 40's houses usually had 1 bathroom, try THAT today. We just sold my folks 1953 3 bdr.-1,200 ft ranch a few years ago and that was a major drawback. I wonder how 6 people survived w/ only one bathroom.
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Old 04-14-2008, 02:55 PM
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Well, if you have a higher than normal probability that a lawyer will try to steal everything you own, your home is one of the few things he can't fight for. For some people, it makes sense to put money into their home.
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Old 04-14-2008, 02:58 PM
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GhostShip - 4/14/2008 1:42 PM



bsmit24 - 4/14/2008 4:13 PM Thanks guys. I am going to have to see how much junk I can get rid of this spring. I will have to see how receptive my wife is to a more simplified life. I thought that this was interesting. Average household size in the United States has dropped steadily from 3.67 members in 1940 to 2.62 in 2002. The average size of new houses increased from about 1,100 ft2 in the 1940s and 1950s to 2,340 ft2 in 2002.
And the 40's houses usually had 1 bathroom, try THAT today. We just sold my folks 1953 3 bdr.-1,200 ft ranch a few years ago and that was a major drawback. I wonder how 6 people survived w/ only one bathroom.
My home was built in '53 also but is 1600 sq ft with 2 full baths so not that much different and has plenty of living space. Although I must say that it is a poor floor design. How quickly we can become accustomed to the good life.

My wife kept saying that she wanted a large house like her grandparents million dollar home. When I finally got a chance to go to jersey to see her grandparents it was a 30ft x 30ft two story wooden shingle covered house with one small bathroom and a kitchen the size of a postage stamp. I personally think that it would be a step down from what I have now but when we go she still sees it through the eyes of a little girl and thinks it is a huge house. By the way her grandparents raised 9 children 4 of which were girls on one bathroom.
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Old 04-14-2008, 02:59 PM
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BIGnUGLY - 4/14/2008 1:55 PM

Well, if you have a higher than normal probability that a lawyer will try to steal everything you own, your home is one of the few things he can't fight for. For some people, it makes sense to put money into their home.
I know that is the case in Florida but not in Louisiana. Our homestead exemption is fairly low comparatively speaking.
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Old 04-14-2008, 07:11 PM
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I bought this house in 1991. It was built in 1951 and its about 1300 ft2. 1-1/2 bathrooms. Things were pretty tight in here and i considered building an addition onto the back. Problem is, the land is worth way more than the house and whoever buys this place will have it bulldozed, so no sense in investing about $100K in that. I owe about 70K on the mortgage now. What helped a lot was building a detached 2 car garage with a large loft for about 20K. Now the house isn't so cluttered since i've got TONS of storage space now, and a place to play with my tools and drink beer. I figure i just might get some of that 20K back if/when i sell this place since the garage is new and detached, so somebody else might want to keep it. That's the theory anyway. I like the fact that even if the economy takes a total nose dive and i loose my job, it's unlikely that i'll have to move since the mortgage payments are still very low. Plus there's a refrigerator in the garage.
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Old 04-14-2008, 07:58 PM
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I went through this decision just recently. Four person family here. Two Sons, ages now 9 and 12. We lived in a 3 bedroom brick ranch that was only 1100 square foot (not counting basement and two car integral garage). The house was beautiful and had alot of character. Exceptional plasterwork. I had put alot of time and money into it. Finished the entire downstairs, retrimmed and redoored the entire house. All new flooring, etc. Had two fire places and 2.5 baths. I even brought in 7500 tons of fill to raise the 3rd plateau of the yard (in the rear of the house) to be even with the 2nd plateau. I would've liked to add on, but the only way I thought was feasible was to go out the back of the house, and that would've cut into the back yard more than I would've liked. In this area, a flat yard is a major selling point. And that house had a nice flat back yard, but not enough (60 ft out from the house, by 160 wide) that cutting into that 60 ft with an addition wouldn't have affected it. I sold the house myself in two weeks and for just a couple grand less than I was asking, which was about dead even with what the comparable houses in that plan were selling for. Another reason I opt'd to sell the house was that the area seemed to be changing, and not for the better. I bought two acres of land (two separate lots actually) and had a 2200 square foot house (again, not counting garage and basement) built on one of the lots. Our new house is very plain compared to the last house, but the added space is very, very nice.

Another benefit is that newer homes are much more energy efficient than older homes. We had a high efficiency furnace in our last home, and our gas bill for our new home is no higher. I insulated the attic in our last home, and it had new windows installed just before we bought it. But they didn't insulate walls that well back in 1955 (when our last home was built) compared to today.

I'm learning as I go along in life. When we bought our first home, I thought we'd be there for life. But circumstances change. Not too long ago, I reasoned that I'll probably own three personal residences in my life (and given my reasoning, think this might be the case for the average head of household). The first home is your starter home. You use that to build equity. You live there while your starting your family, but eventually out grow it. You then move into your next home, which will probably be the largest of the three homes. This is the home you'll live in until the kids have moved out for good. For retirement, you down size for your third home.
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Old 04-14-2008, 08:12 PM
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I think it is better to go too little than too big - too big is the main reason the mortgage mess is killing us. There are a number of reasons to go little - I live in an area where the housing market has always been a poor investment. Houses that cost $50K 25 years ago are selling for $75K now. Houses that cost $200K 25 years ago are selling for $180K. There are a lot more folks that can afford $75K than $200K. I bought small because that is all I could afford 25 years ago, but got some pay increases along the way, and paid it off after 15 years - something I could not do with a larger house. It was cramped when we had kids, but now we have one room neither me nor the wife has entered in the last month, and another room we would never go in except I now have a home business. When you replace the roof and air conditioner like I have this year, I probably paid half what I would have for a bigger house. I have put two kids through college and not had to borrow a dime to do it - because we were cramped when they were growing up, but it was not like we were living in a one room hut in africa. After I paid the house off, I was able to save a lot more, and should be able to retire at age 55. I never have felt the urge to keep up with the Joneses.
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Old 04-14-2008, 08:44 PM
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Bought my 700 sq ft house (more like a cottage) in 1993 for 82k. At the time it was valued at 145k mainly because it's on a dead-end road with a big yard next to a school bordering the woods. In 2004 I added a 2nd floor,expanded the living room. Now the wife has her 10'x10' walk-in closet and I got my office with a 27' x 15 master bedroom. With a favor owed to me from a contractor and building material at wholesale prices from a relative I was able to get it done for 72k. Last I checked my initial 82k investment is now worth 475k! I made 321k ! So in closing I'd go small...you can always add on with the right property.
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