Purchase makes sense?

[Kamban]

hatton1 wrote:

Are you sure you want a bigger lot as you hit your 50s?  More yard work.  The kids will be off to college soon.  Most people quickly tire of pools.

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Very sufficiently put.

Children grow up very quickly. Before you know one is out of the house in 4 years and another is 6. You might end up with a bigger house with a bigger lot as you approach 55 years. More yard work, more maintenance.

Unless you live in South California or Florida, pools are a pain in the butt to manage and costs much more for the very little use they see. My friend built a pool since his kids wanted it. One swam in it 3 times and one did only once. It is just lying there and sliding into disrepair. Cost to build it - $75K.

[squirrel]

Swim clubs where you live?  Agree with a lot of posters about the added hassles.  We almost bought a house with a pool, so glad I didnt.  The house we bought is right near our neighborhood swim club (where we live in NC there are tons of them).   For only $500 a year I get access to swimming from memorial day to labor day and NO UPKEEP for me to do.

Another thing to think about is liability.  Know someone whose child drowned in their pool.  So sad.  A pool cause cause injury and sadly death, and you will likely pay for that with higher homeowners and umbrella costs I'm sure.

With all that said, by your numbers you gave it doesnt seem like a horrible thing to do if thats how you want to spend your money and will give you happiness.

 

 

[jjandjab]

Similar to your situation, 5 years ago at my wife's request we moved from an "in-town" neighborhood in a 2600 sg ft house to a super nice neighborhood in a 5500 sq ft house with 3 private acres and a pool. In our experience so far, it was great for 5 years, but now we are thinking of downsizing again within the next two years (at that point two will be in college).

We made this move before discovering websites like WCI - and we are both from families that love to spend and have big homes. When we moved to this house, our kids were between 8-12 and we all loved the extra space and the pool. But much of the inside space in the house sits completely unused except for our main den/kitchen area and bedrooms. Our oldest teen, now almost 18, is always out and rarely home. The other two teens also do their own thing and the pool rarely gets used except for quick dips by my wife - but it is a nice spot to lay out and get some sun for the 4 1/2 months we can use it (in New England). We do both enjoy sitting outside and having friends over in the summer - at least other kids have fun in the pool...

Bigger obviously increases expenses - utilities, yard work (had a service, now my teens do it, but I still pay them and bought a tractor   ), more furniture, more decorations, more paint (inside and out), more systems - house has two heating and cooling systems due to its layout. When you increase size, you gotta at least decorate it, which takes time and money. Painting this house was 3x the cost of painting the smaller house.

However, there are good things that have kept us from selling so far. We did get a great deal on a beautiful house (it was a foreclosure that the bank in town completely renovated, go figure) and we have a super low mortgage rate. For my wife - she still loves it and we are still able to save at least 30% on income. By far the most important thing to me is the added privacy, despite the upkeep. I so much enjoy looking at the mountains from our secluded porch, although still in a neighborhood and walking distance to town. I did not like having neighbors within 30 feet on both sides with a backyard that touched four other yards - just always felt cramped.

I am not sure if I would do it again, but if you are in a place where you can still sell a 1.7M house in a few years without much trouble, it might be worth it, even if just because the family wants to do it. Again, you already have a great savings base, make a great income and can afford it - so it doesn't seem like a huge risk even with taking on the larger mortgage.

[BlueMonday]

Thanks for all the input.

 

You are all, of course, right that this is not a smart financial decision. We have a fair amount of cash on hand to cover 20% down on a new house and would plan on rolling over the proceeds from our current house into the new one if purchase it. I figure that would leave us with a new mortgage of about $600k (15yr at 4%). Very manageable, but a large portion of our net worth would be home equity (about 1/3, which scares me). HCOL area within a low cost of living region (Central Houston).

 

I'm leaning towards not moving ahead, but the wife has her own thoughts and opinions....

[StarTrekDoc]

Buying bigger than your 'needs' rarely makes FINANCIAL sense.  Your current home sounds like will appreciate as quickly as the high end community estate home that you're looking at.

Strictly from the FINANCIAL side, no --- it doesn't make sense.

That said -- Happy Spouse -- Happy Home.  You have the financial means.  that doesn't appear to be an issue and it'll probably won't affect retirement plans unless you're looking to curtail income significantly or expenses are out of a typical 600k income spend (doesn't appear so with 2M in the bank already).

Having a pool 10 steps away is not the same as a club house pool.  We had both ways and installed another pool again for us and the kids (and the dog) after 2 years without.   It's definitely in the splurge category.

[Peter @ Curbside]

You're not crazy, cause financially you can "afford" it. However, it's truly just a personal decision about priorities. My parents wanted a bigger lot back in the day because my father's passion, other than medicine, was gardening. He would spend most of his free time in the yard and to this day, that brings him so much enjoyment and pride. He could afford it and I think he made a good decision.

Having grown up with a large yard, I thought I'd want the same. I've gained a good deal of equity in my home so I've been encouraged to sell and move to a bigger home & lot. However, I've found over time that I value my location, neighbors, school for kids, etc. more than having a large yard or pool. The neighborhood has a good deal of parks and a pool and my HOA goes to maintaining it all (so I don't have to!). I hope to be where I'm at for a long time and am now more focused on savings and investments.

As others have mentioned, it will push off the retirement timeline a bit if you were hoping to retire early, but again it's all about what's important to you. Good luck!