of course you buy the biggest house you can safely afford. it appreciates and it is highly leveraged.

when you are 70 do you want to own a house, free and clear, worth $2.5MM or one worth $1.7MM?

I don't necessarily think so.

I think you buy a house with a good layout and 3-4 bedrooms in an area close to jobs and in a good school district. I think you maintain the house and land well, making improvements both for your enjoyment and for potential resale. Invest the money you've saved in other assets (or a smaller rental property, perhaps??)

Honestly, it sounds like some of the stuff you want is not necessarily going to attract buyers. The 2-story family rooms are not as en vogue anymore. I don't really see why you'd need or want a second staircase.

How old are you and how many kids do you have (or want to have?). Are your jobs entirely secure?

Anonymous wrote:

Anonymous wrote:OP here. I'm not "perfectly happy" in the current house as one PP said, but it is more than sufficient. Everything I'd be looking for would just be luxuries like 3rd full bath up, vaulted family room, 2nd stair case, bigger garage. i feel like if we can afford it, its not a BAD place to put the money. DH would rather save and make minor improvements than make a housing jump. He thinks there are "hidden" costs like higher taxes and utilities/maintenance, and richer neighbors making "keeping up" more expensive.

I just feel like if we are maxing out retirement and almost done saving for college, what else should we do with the extra money?

If you are living in a neighborhood where $950K is going to buy you a 3rd bathroom upstairs, a vaulted family room, second staircase (going to the same place as the first one, I assume?), and a "bigger" garage (which assumes you already have one), I suspect you are not buying in the close-in areas that are most likely to maintain/increase their value -- e.g. Arlington, Bethesda, etc. In those areas $950K doesn't necessarily even buy you one garage, let alone a big one! It sounds more like you're talking about the further-out suburbs, and in that case I would definitely not buy a bigger house b/c you think it will be a better investment htan you can otherwise make.

Totally agree with this. I don't have any of those things in Bethesda and our house would sell for $1.3 million. This market is relatively stable but farther out where it's overbuilt I don't think appreciation is nearly as reliable. If you really want to invest in real estate invest in rental property, which will be more liquid down the road.

What do you mean maxing out on retirement savings? If that means hitting the 401k tax deferred cap that's not nearly enough.

Maybe, but we love our neighborhood, so we've lived here for 15 years. A house is more than an investment.

Anonymous wrote:OP here. I'm not "perfectly happy" in the current house as one PP said, but it is more than sufficient. Everything I'd be looking for would just be luxuries like 3rd full bath up, vaulted family room, 2nd stair case, bigger garage. i feel like if we can afford it, its not a BAD place to put the money. DH would rather save and make minor improvements than make a housing jump. He thinks there are "hidden" costs like higher taxes and utilities/maintenance, and richer neighbors making "keeping up" more expensive.

I just feel like if we are maxing out retirement and almost done saving for college, what else should we do with the extra money?

If you are living in a neighborhood where $950K is going to buy you a 3rd bathroom upstairs, a vaulted family room, second staircase (going to the same place as the first one, I assume?), and a "bigger" garage (which assumes you already have one), I suspect you are not buying in the close-in areas that are most likely to maintain/increase their value -- e.g. Arlington, Bethesda, etc. In those areas $950K doesn't necessarily even buy you one garage, let alone a big one! It sounds more like you're talking about the further-out suburbs, and in that case I would definitely not buy a bigger house b/c you think it will be a better investment htan you can otherwise make.

If your savings are tied up in your house they are not liquid and not available when needed. I'd buy bigger if you want a nicer house but would not treat it as an investment.

I'd actually do the opposite, buy the cheapest place on the block.

Anonymous wrote:OP here. I'm not "perfectly happy" in the current house as one PP said, but it is more than sufficient. Everything I'd be looking for would just be luxuries like 3rd full bath up, vaulted family room, 2nd stair case, bigger garage. i feel like if we can afford it, its not a BAD place to put the money. DH would rather save and make minor improvements than make a housing jump. He thinks there are "hidden" costs like higher taxes and utilities/maintenance, and richer neighbors making "keeping up" more expensive.

I just feel like if we are maxing out retirement and almost done saving for college, what else should we do with the extra money?

How old are you and how old are your kids? How much equity do you have in your current house? If you bought the house, what length mortgage would you get?

No, I wouldn't buy a more expensive house just as an investment. Historically, homes only appreciate in value equal to inflation (of course that wasn't true in DMV in the last 10 years).

False. If you want more real estate, buy and fix up a rental property.

17:05 has it right. So does your DH.

Anonymous wrote:I've heard of people saying they use their mortgage as sort of a forced savings and/or buy a more expensive house so their home value (over 15-20 years, not short term) appreciates more in whole dollars.

So, from a strictly financial/investment stand point, would you "trade up" from a $700k house to a $950k house (assuming you could afford to) as a vehicle for investment? Or would you just focus on other areas of investment such as paying off the mortgage on the current home? What else would you do with extra money?

For the purposes of discussion, assume that:

1. Current house is "big enough" and in good schools
2. 401k/IRAs are maxed out in either scenario

Discuss!

We did that on our first house in 1999. Bought the biggest house we could afford - That was 3 houses ago and it has worked well for us. We are likely in our final house now and rolling the appreciation each time has put our LTV around 25%.

Anonymous wrote:I'm not sure this is what you're really looking for, but to answer your question: no. To maximize appreciation, but in an area that other people are reluctant to buy (not just DCUM people), like Anacostia. That reluctance to buy translates to lower prices for you when you buy. In several years, when more people see it as a viable place to live, you'll see significant appreciation.

+1. We had great luck doing this. Bought in up and coming areas. Ex. Bought an one bedroom apt in NYC, Manhattan, during the 90ties for 25k. Sold in 10 yrs for 435k. Subway entrance at the end of the block. We remodeled the bathroom, replaced the kitchen stove and frig. That's it.

Bought in DC, NW downtown within .5 mile to red, yellow and green metro lines. Bought from a guy who bought the property sight unseen at auction. He doubled his money when he sold to us but painted the interior. We will at least double our money when we sell after living here less than five yrs. Done nothing except basic maintenance.

We never had to get a mortgage and could have bought a lot more house with a mortgage but prefer living without one.

I'm not sure this is what you're really looking for, but to answer your question: no. To maximize appreciation, but in an area that other people are reluctant to buy (not just DCUM people), like Anacostia. That reluctance to buy translates to lower prices for you when you buy. In several years, when more people see it as a viable place to live, you'll see significant appreciation.

True