Anonymous
08/18/2022 21:06
Subject: How do people "upgrade" houses?
Anonymous wrote:We are in a townhouse I always thought would be a starter. It's not horrible but it is very small and there is basically zero outdoor space. All of our friends are in SFHs by now and I particularly envy their backyards and bike storage. We'd planned on upgrading eventually, but it's been kind of horrifying to see prices rise by a couple hundred thousand in the last two years while our incomes definitely have not.
We have a combined HHI of $160k and we are in fields where we probably can't get giant raises (government and academia), so I feel like our options are:
1. Live with this forever and be embarrassed to have people over
2. Redirect some of our retirement/college savings to a new down payment fund, or just plan on saving less and having a larger mortgage payment if/when rates go down someday and we have more equity? Right now we are saving 35% of our income for retirement.
3. Figure out how to pivot to tech in...middle age...and double salaries?
If you bought two years ago you should plan to stay put for another 6-10 years. You don't upgrade after two years. Just enjoy your townhouse. In a few years keep your eye out for a dip in the market.
Anonymous
08/18/2022 21:01
Subject: How do people "upgrade" houses?
That’s a lot for retirement, especially if the gov worker will also have a pension? If you direct less to retirement and into a bigger home, if you downsize the home later, that’s part of your retirement plan. But don’t do anything because of embarrassment? If your friends would look down on you for a townhouse; they aren’t friends.
Anonymous
08/18/2022 21:00
Subject: Re:How do people "upgrade" houses?
Anonymous wrote:Anonymous wrote:How much house do you feel you can afford OP?
About $100k more than ours costs - which was the price differential of a single family home in 2020, and is far less now. We don't have a ton of equity yet.
Typically you want to stay in a home 5-10 years. It sounds like you may have been in yours about 2?
Certainly leave if you hate it - life is too short - but in that case you will take a hit. Financially you should stay longer. Save up your cash for a down payment and let your equity grow.
Anonymous
08/18/2022 20:53
Subject: Re:How do people "upgrade" houses?
Anonymous wrote:How much house do you feel you can afford OP?
About $100k more than ours costs - which was the price differential of a single family home in 2020, and is far less now. We don't have a ton of equity yet.
Anonymous
08/18/2022 20:51
Subject: How do people "upgrade" houses?
Anonymous wrote:#3. DH and I tripled our salaries by leaving our non-profit gigs in our late 30s for consulting. We definitely feel behind our friends but we're OK with that.
How did you do that? What kind of consulting?
Anonymous
08/18/2022 20:49
Subject: How do people "upgrade" houses?
Anonymous wrote:We are in a townhouse I always thought would be a starter. It's not horrible but it is very small and there is basically zero outdoor space. All of our friends are in SFHs by now and I particularly envy their backyards and bike storage. We'd planned on upgrading eventually, but it's been kind of horrifying to see prices rise by a couple hundred thousand in the last two years while our incomes definitely have not.
We have a combined HHI of $160k and we are in fields where we probably can't get giant raises (government and academia), so I feel like our options are:
1. Live with this forever and be embarrassed to have people over
2. Redirect some of our retirement/college savings to a new down payment fund, or just plan on saving less and having a larger mortgage payment if/when rates go down someday and we have more equity? Right now we are saving 35% of our income for retirement.
3. Figure out how to pivot to tech in...middle age...and double salaries?
2. That’s a lot to save for retirement. How much equity do you have?
But don’t be embarrassed by the TH. No one cares but you, I promise.
Anonymous
08/18/2022 20:43
Subject: How do people "upgrade" houses?
#3. DH and I tripled our salaries by leaving our non-profit gigs in our late 30s for consulting. We definitely feel behind our friends but we're OK with that.
Anonymous
08/18/2022 20:40
Subject: Re:How do people "upgrade" houses?
Anonymous wrote:Adjust your worldview. Your embarrassment with regard to your townhouse is self-imposed, not anything objectively shared on your behalf by anyone.
The key to financial success is to live below your means, which you may be doing now. if you upgrade your lifestyle with a more expensive home, will you still be living below your means, or will you be exchanging more working years before retirement for the bigger house?
As note earlier, you may be able to have a bigger home in a different location while keeping your expenses close to what they are now, but that requires flexibility on your part with regard to where you live geographically in return for the bigger house.
Everything is a trade-off, but it may be neither wise nor prudent to trade a bigger home for a higher level of expenses if your income can't comfortably support the higher outflow.
+1 We earn more than twice OP and were about to buy a small, unfancy but well located and premium lot townhouse worth less than half our last home. Who cares what people think? Is your house clean, safe, and meeting your needs? My richer friends with big houses were totally supportive—they know I got tired of the maintenance and hassle, and that we prioritize time, travel, food, and savings over things. Ultimately opted to downsize even further to a better-located apartment instead. And gasp, even rent it rather than owning. You’re saving a huge chunk of your salaries which is admirable, and probably allows you to buy years of your life back from the rat race. Keep going. Keeping up with the Joneses is a TRAP.
Anonymous
08/18/2022 20:31
Subject: Re:How do people "upgrade" houses?
How much house do you feel you can afford OP?
Anonymous
08/18/2022 20:16
Subject: Re:How do people "upgrade" houses?
Adjust your worldview. Your embarrassment with regard to your townhouse is self-imposed, not anything objectively shared on your behalf by anyone.
The key to financial success is to live below your means, which you may be doing now. if you upgrade your lifestyle with a more expensive home, will you still be living below your means, or will you be exchanging more working years before retirement for the bigger house?
As note earlier, you may be able to have a bigger home in a different location while keeping your expenses close to what they are now, but that requires flexibility on your part with regard to where you live geographically in return for the bigger house.
Everything is a trade-off, but it may be neither wise nor prudent to trade a bigger home for a higher level of expenses if your income can't comfortably support the higher outflow.
The key to financial success is to live below your means, which you may be doing now. if you upgrade your lifestyle with a more expensive home, will you still be living below your means, or will you be exchanging more working years before retirement for the bigger house?
As note earlier, you may be able to have a bigger home in a different location while keeping your expenses close to what they are now, but that requires flexibility on your part with regard to where you live geographically in return for the bigger house.
Everything is a trade-off, but it may be neither wise nor prudent to trade a bigger home for a higher level of expenses if your income can't comfortably support the higher outflow.
Anonymous
08/18/2022 19:22
Subject: Re:How do people "upgrade" houses?
How long have you been in your TH?
Would you consider a different TH (with yard and garage) vs a SFH?
$160k combined is unfortunately somewhat low for this area, although totally doable if you have equity to use for your down payment. Are there better paying options in your field? It isn't just tech that pays more than $80k.
Would you consider a different TH (with yard and garage) vs a SFH?
$160k combined is unfortunately somewhat low for this area, although totally doable if you have equity to use for your down payment. Are there better paying options in your field? It isn't just tech that pays more than $80k.
Anonymous
08/18/2022 19:21
Subject: How do people "upgrade" houses?
#2, most likely. 35% is a significant chunk. Do you have kids now? Do you see buying your “forever” (or at least, very long term) home next or is it another stepping stone? A house/home equity can certainly be part of your overall retirement plan, so I wouldn’t feel bad adjusting to make the move. If you don’t have kids yet, stop saving for college for a few years.
Anonymous
08/18/2022 19:12
Subject: How do people "upgrade" houses?
Or move farther out. Not sure where you are, but there are probably cheaper options if you’re open to different areas.
Anonymous
08/18/2022 19:10
Subject: How do people "upgrade" houses?
Option #3 or pivoting to some consulting for the academic
Do you have enough equity in your townhouse to use for the down payment on a more expensive house?
Do you have enough equity in your townhouse to use for the down payment on a more expensive house?
Anonymous
08/18/2022 19:06
Subject: How do people "upgrade" houses?
We are in a townhouse I always thought would be a starter. It's not horrible but it is very small and there is basically zero outdoor space. All of our friends are in SFHs by now and I particularly envy their backyards and bike storage. We'd planned on upgrading eventually, but it's been kind of horrifying to see prices rise by a couple hundred thousand in the last two years while our incomes definitely have not.
We have a combined HHI of $160k and we are in fields where we probably can't get giant raises (government and academia), so I feel like our options are:
1. Live with this forever and be embarrassed to have people over
2. Redirect some of our retirement/college savings to a new down payment fund, or just plan on saving less and having a larger mortgage payment if/when rates go down someday and we have more equity? Right now we are saving 35% of our income for retirement.
3. Figure out how to pivot to tech in...middle age...and double salaries?
We have a combined HHI of $160k and we are in fields where we probably can't get giant raises (government and academia), so I feel like our options are:
1. Live with this forever and be embarrassed to have people over
2. Redirect some of our retirement/college savings to a new down payment fund, or just plan on saving less and having a larger mortgage payment if/when rates go down someday and we have more equity? Right now we are saving 35% of our income for retirement.
3. Figure out how to pivot to tech in...middle age...and double salaries?