Skipping starter home and buying 4-5BR house?

[Anonymous]

Anonymous wrote:Not weird, but be sure you know what you really want in a house before you make the investment. We had a starter 2bdrm condo (well, if 700k+ Can be considered "starter") and I'm glad we did. Learned a lot about likes, dislikes, and must haves as well as about home improvement and maintenance. We upgraded to a 4 bedroom house (cheaper purchase price than the condo, actually) and knew what to look for in a house. We also know what kind of finishings and layout we prefer to live in and we are renovating our house with lessons learned from our condo (eg, love white marble, but not for kitchen countertops).

Agree with this completely. Started with a townhouse and learned a ton about what was really important to us - layout, yard, neighborhood, commute times and location. Also did a ton of work on the house & knew what projects we can just do ourselves. Bought a 4 bedroom rancher (1 bedroom is main level playroom) and couldn't be happier, but it's not what we would've chosen 8 years ago when we bought the townhouse before kids.

[Anonymous]

Anonymous wrote:We're married and have no kids but planning on having 2-3 kids in the next 10 years. Is it weird to skip the starter 2BR house and go straight for a 4-5BR house? Has anyone done this before? We are thinking of getting a row house in the city, so presumably we could rent out the extra space until we need it. Thoughts?

OMG.

I would never rent out space in my home. That's just too 3rd world.

[Anonymous]

I wouldn't buy anything that would be too big to live in case you don't have kids. You can never be sure. You might need IVF, and it might or might not work. It's also expensive unless you have insurance that covers it.

Also, I wouldn't rent out rooms in my house, unless it was a totally separate unit with a separate entrance.

[Anonymous]

OP here. Thanks for the responses. I think we'll need to think this through more. Hate the idea of eating transactions costs, empty space just sitting around, or continuing to rent when we could be buying. Maybe we will aim for the 2BR and just squeeze while the kids are young.

[Anonymous]

Anonymous wrote:OP here. Thanks for the responses. I think we'll need to think this through more. Hate the idea of eating transactions costs, empty space just sitting around, or continuing to rent when we could be buying. Maybe we will aim for the 2BR and just squeeze while the kids are young.

Or you could get a 3 br...or a different neighborhood... There is a lot of ground btw your dream 4-5br house and a 2br condo.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here. Thanks for the responses. I think we'll need to think this through more. Hate the idea of eating transactions costs, empty space just sitting around, or continuing to rent when we could be buying. Maybe we will aim for the 2BR and just squeeze while the kids are young.

Or you could get a 3 br...or a different neighborhood... There is a lot of ground btw your dream 4-5br house and a 2br condo.

Yea but the 3BR is also pretty much wasted space (aka $$$ we could be investing better otherwise) since the most we'd really utilize before kids is 2BR, and if we are going to have empty space or roommates we might as well aim for the house we can stay in for the long term so we don't have to deal with selling.

-OP

[Anonymous]

Anonymous wrote:

Anonymous wrote:We're married and have no kids but planning on having 2-3 kids in the next 10 years. Is it weird to skip the starter 2BR house and go straight for a 4-5BR house? Has anyone done this before? We are thinking of getting a row house in the city, so presumably we could rent out the extra space until we need it. Thoughts?

OMG.

I would never rent out space in my home. That's just too 3rd world.

The first time I heard about renting out space in your home was when I moved to the US from my 'third world' country.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. Thanks for the responses. I think we'll need to think this through more. Hate the idea of eating transactions costs, empty space just sitting around, or continuing to rent when we could be buying. Maybe we will aim for the 2BR and just squeeze while the kids are young.

Or you could get a 3 br...or a different neighborhood... There is a lot of ground btw your dream 4-5br house and a 2br condo.

Yea but the 3BR is also pretty much wasted space (aka $$$ we could be investing better otherwise) since the most we'd really utilize before kids is 2BR, and if we are going to have empty space or roommates we might as well aim for the house we can stay in for the long term so we don't have to deal with selling.

-OP

You're thinking about this the wrong way. A third bedroom isn't wasted space if you aren't using it. It can be used in the future and is priced into the value of your home whether you use it or not. You could use it as a guest room, office etc. did you grow up poor? It's perfectly common to have infrequently used rooms.

Also consider transaction costs and appreciation when buying. Condos are often bad investments. A 3 bedroom rowhouse can help you hedge your risk because it allows you enough space to stay if you have a second child.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. Thanks for the responses. I think we'll need to think this through more. Hate the idea of eating transactions costs, empty space just sitting around, or continuing to rent when we could be buying. Maybe we will aim for the 2BR and just squeeze while the kids are young.

Or you could get a 3 br...or a different neighborhood... There is a lot of ground btw your dream 4-5br house and a 2br condo.

Yea but the 3BR is also pretty much wasted space (aka $$$ we could be investing better otherwise) since the most we'd really utilize before kids is 2BR, and if we are going to have empty space or roommates we might as well aim for the house we can stay in for the long term so we don't have to deal with selling.

-OP

If renting out rooms was worth it everyone would do it. I've never known a married couple with roommates and that's for a reason. Your plan is strange.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. Thanks for the responses. I think we'll need to think this through more. Hate the idea of eating transactions costs, empty space just sitting around, or continuing to rent when we could be buying. Maybe we will aim for the 2BR and just squeeze while the kids are young.

Or you could get a 3 br...or a different neighborhood... There is a lot of ground btw your dream 4-5br house and a 2br condo.

Yea but the 3BR is also pretty much wasted space (aka $$$ we could be investing better otherwise) since the most we'd really utilize before kids is 2BR, and if we are going to have empty space or roommates we might as well aim for the house we can stay in for the long term so we don't have to deal with selling.

-OP

If renting out rooms was worth it everyone would do it. I've never known a married couple with roommates and that's for a reason. Your plan is strange.

Share housing is much more common amongst millennials due to rising housing costs and student debt. And I think some are also tired of lonely family life. http://www.theatlantic.com/business/archive/2014/07/two-couples-one-mortgage/374102/

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. Thanks for the responses. I think we'll need to think this through more. Hate the idea of eating transactions costs, empty space just sitting around, or continuing to rent when we could be buying. Maybe we will aim for the 2BR and just squeeze while the kids are young.

Or you could get a 3 br...or a different neighborhood... There is a lot of ground btw your dream 4-5br house and a 2br condo.

Yea but the 3BR is also pretty much wasted space (aka $$$ we could be investing better otherwise) since the most we'd really utilize before kids is 2BR, and if we are going to have empty space or roommates we might as well aim for the house we can stay in for the long term so we don't have to deal with selling.

-OP

You're thinking about this the wrong way. A third bedroom isn't wasted space if you aren't using it. It can be used in the future and is priced into the value of your home whether you use it or not. You could use it as a guest room, office etc. did you grow up poor? It's perfectly common to have infrequently used rooms.

Also consider transaction costs and appreciation when buying. Condos are often bad investments. A 3 bedroom rowhouse can help you hedge your risk because it allows you enough space to stay if you have a second child.

But extra rooms that aren't being utilized is wasted money, right? An extra bedroom is ~$1000/month of rent in most places in DC and might add an extra $250K to the price of a house in some areas, so it is a poor allocation of capital given the opportunity costs.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. Thanks for the responses. I think we'll need to think this through more. Hate the idea of eating transactions costs, empty space just sitting around, or continuing to rent when we could be buying. Maybe we will aim for the 2BR and just squeeze while the kids are young.

Or you could get a 3 br...or a different neighborhood... There is a lot of ground btw your dream 4-5br house and a 2br condo.

Yea but the 3BR is also pretty much wasted space (aka $$$ we could be investing better otherwise) since the most we'd really utilize before kids is 2BR, and if we are going to have empty space or roommates we might as well aim for the house we can stay in for the long term so we don't have to deal with selling.

-OP

You're thinking about this the wrong way. A third bedroom isn't wasted space if you aren't using it. It can be used in the future and is priced into the value of your home whether you use it or not. You could use it as a guest room, office etc. did you grow up poor? It's perfectly common to have infrequently used rooms.

Also consider transaction costs and appreciation when buying. Condos are often bad investments. A 3 bedroom rowhouse can help you hedge your risk because it allows you enough space to stay if you have a second child.

But extra rooms that aren't being utilized is wasted money, right? An extra bedroom is ~$1000/month of rent in most places in DC and might add an extra $250K to the price of a house in some areas, so it is a poor allocation of capital given the opportunity costs.

Renting a home is different than owning. You don't assess it the same way. I completely understand that people don't rent extra bedrooms typically but it doesn't work that way with home ownership. Most people stay put for a while once they buy and extra bedrooms allows that flexibility. It's not like you can move everytime you need more space, which you can when renting.

Fwiw it's difficult to find a two bedroom house anyway. You need to focus less on the bedrooms and more if you want a condo or house.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. Thanks for the responses. I think we'll need to think this through more. Hate the idea of eating transactions costs, empty space just sitting around, or continuing to rent when we could be buying. Maybe we will aim for the 2BR and just squeeze while the kids are young.

Or you could get a 3 br...or a different neighborhood... There is a lot of ground btw your dream 4-5br house and a 2br condo.

Yea but the 3BR is also pretty much wasted space (aka $$$ we could be investing better otherwise) since the most we'd really utilize before kids is 2BR, and if we are going to have empty space or roommates we might as well aim for the house we can stay in for the long term so we don't have to deal with selling.

-OP

If renting out rooms was worth it everyone would do it. I've never known a married couple with roommates and that's for a reason. Your plan is strange.

Share housing is much more common amongst millennials due to rising housing costs and student debt. And I think some are also tired of lonely family life. http://www.theatlantic.com/business/archive/2014/07/two-couples-one-mortgage/374102/

But OP isn't someone who can't afford to live without roommates. They just can't afford their dream house without roommates.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. Thanks for the responses. I think we'll need to think this through more. Hate the idea of eating transactions costs, empty space just sitting around, or continuing to rent when we could be buying. Maybe we will aim for the 2BR and just squeeze while the kids are young.

Or you could get a 3 br...or a different neighborhood... There is a lot of ground btw your dream 4-5br house and a 2br condo.

Yea but the 3BR is also pretty much wasted space (aka $$$ we could be investing better otherwise) since the most we'd really utilize before kids is 2BR, and if we are going to have empty space or roommates we might as well aim for the house we can stay in for the long term so we don't have to deal with selling.

-OP

You could lose your jobs or get transferred. Someone could get sick. You can't predict the future.

[Anonymous]

OP, you aren't always going to be able to get everything you want out of life. Financially there is always going to be an opportunity cost. Learn this lesson now.