$2M home w/ $160k HHI?

[Anonymous]

Anonymous wrote:

Anonymous wrote:What are the taxes on the home? At that price, they may Be like an income appropriate mortgage that will never end. So at local rates around here that’s $20k per year on taxes alone. Plus upkeep, dues, etc. Why be permanently house poor? Buy a million dollar house and keep some money in the bank.

One million home will really make you house poor cause it requires constant attention. 2 million gets you something more decent.

This was us. We just sold our house for $1M on the Hill. The roof was on its last leg, although we did everything we could to maintain it while we were there - the inspector even noted how well maintained it was despite the age. I would cringe every time the roll-up garage door was opened, hoping it wasn't the last time - we'd had it serviced over the years, and the service person who was also the original installer told us it was almost 20 years old. Stairs and flooring were really beat up. Bathrooms needed updating and it was on our list of to-do's for so long, but after having lived through kitchen and other renovations, we just never got around to tackling it. We installed all new appliances when we moved in about 7 years ago, but they were basically the cheapest of the nice-looking models, and starting to have issues. We preferred to something nicer and newer, as opposed to putting more money in a house that we no longer worked for us - no basement, very little outdoor space, poor storage, etc.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We spent slightly less (1.8) and make slightly more (~$200) and it’s tight but doable. Maintenance costs are the biggest unknown and you definitely pay a wealth tax having an expensive home. Quotes for home repairs are always high. This year we had to replace a few windows, gutters, and a water heater. About $15K.

If I had an even more expensive house and even less income it would feel impossible. The definition of house poor....

I’m interested in hearing more. We make 2x the amount and are springing for $2M. We expect to eventually rent out the basement for $2k, but not relying on that to pay the mortgage or daily expenses. I know it will be tight for a while, just curious if you regret your purchase. Every which way I calculate it, and looking at worst case scenarios, we can make it work.

If you are factoring our renting the basement you really can’t afford it. Also very tack to live in such a neighborhood and turn your place
Into a multi family unit. Your neighbors will hate you. You don’t really belong. Stop.

I'm pretty sure the neighbors will look at me and think that, no matter if we rent out the basement or not. No, I will not stop.

[Anonymous]

Anonymous wrote:Taxes, insurance, and upkeep on a $2M home with no mortgage would be nearly the same you'd pay for rent these days on a modest apartment. Not that big of a deal.

you’re not factoring in the loss earnings OP would make on that money if they didn’t piss it away on a $2mil house. Plus maintenance, cleaning, and utilities are going to be a LOT. This is such a stupid idea that I think OP is trolling.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We spent slightly less (1.8) and make slightly more (~$200) and it’s tight but doable. Maintenance costs are the biggest unknown and you definitely pay a wealth tax having an expensive home. Quotes for home repairs are always high. This year we had to replace a few windows, gutters, and a water heater. About $15K.

If I had an even more expensive house and even less income it would feel impossible. The definition of house poor....

I’m interested in hearing more. We make 2x the amount and are springing for $2M. We expect to eventually rent out the basement for $2k, but not relying on that to pay the mortgage or daily expenses. I know it will be tight for a while, just curious if you regret your purchase. Every which way I calculate it, and looking at worst case scenarios, we can make it work.

If you are factoring our renting the basement you really can’t afford it. Also very tack to live in such a neighborhood and turn your place
Into a multi family unit. Your neighbors will hate you. You don’t really belong. Stop.

I'm pretty sure the neighbors will look at me and think that, no matter if we rent out the basement or not. No, I will not stop.

We rent our basement (legally, as in we went through the whole permitting process). We live in a neighborhood where there are no houses less than $1.3. Our tenants are quiet, respectful, do not have cars (we're by the metro) and likely largely invisible to our neighbors. I don't care if anyone thinks less of us because we have a nice basement apartment (which adds value to the house, btw, since its legally done) that we rent out to a couple of college students....

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:What are the taxes on the home? At that price, they may Be like an income appropriate mortgage that will never end. So at local rates around here that’s $20k per year on taxes alone. Plus upkeep, dues, etc. Why be permanently house poor? Buy a million dollar house and keep some money in the bank.

One million home will really make you house poor cause it requires constant attention. 2 million gets you something more decent.

This was us. We just sold our house for $1M on the Hill. The roof was on its last leg, although we did everything we could to maintain it while we were there - the inspector even noted how well maintained it was despite the age. I would cringe every time the roll-up garage door was opened, hoping it wasn't the last time - we'd had it serviced over the years, and the service person who was also the original installer told us it was almost 20 years old. Stairs and flooring were really beat up. Bathrooms needed updating and it was on our list of to-do's for so long, but after having lived through kitchen and other renovations, we just never got around to tackling it. We installed all new appliances when we moved in about 7 years ago, but they were basically the cheapest of the nice-looking models, and starting to have issues. We preferred to something nicer and newer, as opposed to putting more money in a house that we no longer worked for us - no basement, very little outdoor space, poor storage, etc.

But you don’t have to spend $2 mil to get an updated house! You were paying $1 mil for an old house because of the location on the Hill. OP has a million options to find a new or newer build for less than $2 mil. And if OP is just trying to make an investment she should buy property near the Purple Line.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:What are the taxes on the home? At that price, they may Be like an income appropriate mortgage that will never end. So at local rates around here that’s $20k per year on taxes alone. Plus upkeep, dues, etc. Why be permanently house poor? Buy a million dollar house and keep some money in the bank.

One million home will really make you house poor cause it requires constant attention. 2 million gets you something more decent.

This was us. We just sold our house for $1M on the Hill. The roof was on its last leg, although we did everything we could to maintain it while we were there - the inspector even noted how well maintained it was despite the age. I would cringe every time the roll-up garage door was opened, hoping it wasn't the last time - we'd had it serviced over the years, and the service person who was also the original installer told us it was almost 20 years old. Stairs and flooring were really beat up. Bathrooms needed updating and it was on our list of to-do's for so long, but after having lived through kitchen and other renovations, we just never got around to tackling it. We installed all new appliances when we moved in about 7 years ago, but they were basically the cheapest of the nice-looking models, and starting to have issues. We preferred to something nicer and newer, as opposed to putting more money in a house that we no longer worked for us - no basement, very little outdoor space, poor storage, etc.

But you don’t have to spend $2 mil to get an updated house! You were paying $1 mil for an old house because of the location on the Hill. OP has a million options to find a new or newer build for less than $2 mil. And if OP is just trying to make an investment she [i]should buy property near the Purple Line.[/i]

Thanks for the laugh OP. Considering the contractors are about to walk off the job... no.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We spent slightly less (1.8) and make slightly more (~$200) and it’s tight but doable. Maintenance costs are the biggest unknown and you definitely pay a wealth tax having an expensive home. Quotes for home repairs are always high. This year we had to replace a few windows, gutters, and a water heater. About $15K.

If I had an even more expensive house and even less income it would feel impossible. The definition of house poor....

I’m interested in hearing more. We make 2x the amount and are springing for $2M. We expect to eventually rent out the basement for $2k, but not relying on that to pay the mortgage or daily expenses. I know it will be tight for a while, just curious if you regret your purchase. Every which way I calculate it, and looking at worst case scenarios, we can make it work.

If you are factoring our renting the basement you really can’t afford it. Also very tack to live in such a neighborhood and turn your place
Into a multi family unit. Your neighbors will hate you. You don’t really belong. Stop.

I'm pretty sure the neighbors will look at me and think that, no matter if we rent out the basement or not. No, I will not stop.

We rent our basement (legally, as in we went through the whole permitting process). We live in a neighborhood where there are no houses less than $1.3. Our tenants are quiet, respectful, do not have cars (we're by the metro) and likely largely invisible to our neighbors. I don't care if anyone thinks less of us because we have a nice basement apartment (which adds value to the house, btw, since its legally done) that we rent out to a couple of college students....

but you probably live in a legacy “normal” neighborhood where a lot of people bought when it was still middle/upper middle class? If OP is paying $2 mil for a McMansion then it’s a totally different vibe.

[Anonymous]

I agree that it's not an investment. I assumed OP just wanted a nice house.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:What are the taxes on the home? At that price, they may Be like an income appropriate mortgage that will never end. So at local rates around here that’s $20k per year on taxes alone. Plus upkeep, dues, etc. Why be permanently house poor? Buy a million dollar house and keep some money in the bank.

One million home will really make you house poor cause it requires constant attention. 2 million gets you something more decent.

This was us. We just sold our house for $1M on the Hill. The roof was on its last leg, although we did everything we could to maintain it while we were there - the inspector even noted how well maintained it was despite the age. I would cringe every time the roll-up garage door was opened, hoping it wasn't the last time - we'd had it serviced over the years, and the service person who was also the original installer told us it was almost 20 years old. Stairs and flooring were really beat up. Bathrooms needed updating and it was on our list of to-do's for so long, but after having lived through kitchen and other renovations, we just never got around to tackling it. We installed all new appliances when we moved in about 7 years ago, but they were basically the cheapest of the nice-looking models, and starting to have issues. We preferred to something nicer and newer, as opposed to putting more money in a house that we no longer worked for us - no basement, very little outdoor space, poor storage, etc.

But you don’t have to spend $2 mil to get an updated house! You were paying $1 mil for an old house because of the location on the Hill. OP has a million options to find a new or newer build for less than $2 mil. And if OP is just trying to make an investment she [i]should buy property near the Purple Line.[/i]

Thanks for the laugh OP. Considering the contractors are about to walk off the job... no.

clearly you have no head for investing because now would be the perfect time. it’s gonna get built eventually, so you just need to not be buffeted by headlines.

[Anonymous]

OP is not the one talking about renting out the basement. Sorry, I side-tracked the convo there. And to be clear, the house already had a basement and the developer turned it into a basement with a separate entrance. So now I should move the stairs and entryway to appease NIMBYs like PP? LOL.

[Anonymous]

Personally, I would buy a less expensive home and plan on an early retirement.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We spent slightly less (1.8) and make slightly more (~$200) and it’s tight but doable. Maintenance costs are the biggest unknown and you definitely pay a wealth tax having an expensive home. Quotes for home repairs are always high. This year we had to replace a few windows, gutters, and a water heater. About $15K.

If I had an even more expensive house and even less income it would feel impossible. The definition of house poor....

I’m interested in hearing more. We make 2x the amount and are springing for $2M. We expect to eventually rent out the basement for $2k, but not relying on that to pay the mortgage or daily expenses. I know it will be tight for a while, just curious if you regret your purchase. Every which way I calculate it, and looking at worst case scenarios, we can make it work.

If you are factoring our renting the basement you really can’t afford it. Also very tack to live in such a neighborhood and turn your place
Into a multi family unit. Your neighbors will hate you. You don’t really belong. Stop.

Why would neighbors care if you rent out an asset? If it’s there why not make money off of it?

In neighborhoods with houses of $2 million, trust me when I say that there would be a huge stigma to renting out the basement. Your neighbors will look down on you and assume you are house poor. Trust me, as I speak from personal experience (as the person who was house poor).

And ?

And . . . do you really want your neighbors looking down on you for buying a house that you could not afford (since you need to rent the basement.)

And . . . do you really want random people living in your basement as renters, even if you rarely see them? It's for people who are financially strapped or bought too much house or whatever.

[Anonymous]

Maintenance, upkeep, furnishings, and landscape maintenance will suck up all of your disposable income and then some. I'd split the difference - find a nice, updated, well-maintained but slightly smaller home for $1M-ish. Put another $0.5M in a low-risk account to cover your move-in costs (including furnishings) and 5-10 years of maintenance. Keep investing the other $0.5M.

[Anonymous]

I was low-income and inherited a house. I never had the money for the maintenance but at least my kids got into a decent school district.

My suggestion would be to run the numbers: taxes, utilities, 1% for maintenance costs. Then figure out how much of your 2m would you have to put in a more conservative investment to generate some of the income to run the house. My guess is that if you drop your purchase point, you could either invest in a second property, rent it and generate enough to pay the taxes and maintenance on your primary residence, or keep some in the market (more conservative investments) and use that to supplement income.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We spent slightly less (1.8) and make slightly more (~$200) and it’s tight but doable. Maintenance costs are the biggest unknown and you definitely pay a wealth tax having an expensive home. Quotes for home repairs are always high. This year we had to replace a few windows, gutters, and a water heater. About $15K.

If I had an even more expensive house and even less income it would feel impossible. The definition of house poor....

I’m interested in hearing more. We make 2x the amount and are springing for $2M. We expect to eventually rent out the basement for $2k, but not relying on that to pay the mortgage or daily expenses. I know it will be tight for a while, just curious if you regret your purchase. Every which way I calculate it, and looking at worst case scenarios, we can make it work.

If you are factoring our renting the basement you really can’t afford it. Also very tack to live in such a neighborhood and turn your place
Into a multi family unit. Your neighbors will hate you. You don’t really belong. Stop.

Why would neighbors care if you rent out an asset? If it’s there why not make money off of it?

In neighborhoods with houses of $2 million, trust me when I say that there would be a huge stigma to renting out the basement. Your neighbors will look down on you and assume you are house poor. Trust me, as I speak from personal experience (as the person who was house poor).

And ?

And . . . do you really want your neighbors looking down on you for buying a house that you could not afford (since you need to rent the basement.)

And . . . do you really want random people living in your basement as renters, even if you rarely see them? It's for people who are financially strapped or bought too much house or whatever.

I don’t want judgmental neighbors, no. But I can’t control what they think about me. Nor can I make them move. Or Maybe they will move now that brown people are moving in next door to them?