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No big disadvantages I can think of. Only thing would be if you or your wife's specific type of job involves some sort of home entertaining socializing schmoozing.
Lots of big disadvantages of moving.
All involving greater costs which depending on your market may not transfer to returns when it comes time to 'down size' near end of occupancy. Also there is a general rule in housing much like when one allots time to accomplish task to a worker (they will take up all the time you allot) that if you get a larger house you will invariably buy the ancillary amount of 'stuff' to fill it up - which most often people do not need. So that what you think of as extra income will be eaten up in other ways (as well as the property taxes, insurance and countless other operational / maintenance related items.
If you love the neighborhood and it is stable, good location, desirable schools etc... (whatever variables you consider most important) you'd be better off, as many have suggested, saving, paying it down faster, investing money in a few key additions / upgrades that increase comfort (bathroom/ all season room etc..) or investing the money toward retirement.
One's primary housing choices are 1) Lifestyle dependent 2) Should not be looked at as investments and 3) As an investment are illiquid and demand lots of ongoing maintenance and operational costs. All these things impact number one in that your time is something of value only you can determine.
Ask yourself a few basic questions, based on the amount of leisure time you have when home:
How often do you use all the space you currently have?
How will any additions to the family impact that?
How pleased are you with the neighbors / neighborhood?
How would any move impact your transportation costs? (Commute, routine shopping needs, etc...)
What gives you more contentment what you can show off to others in your home of your level of ownership / self management of what you occupy?
Does your current lifestyle and unexpected extra income afford you an opportunity to do and experience other things in life to be more fulfilling than upgrading your residence?
Only you can make the final decision, so I hope this gives you something to ruminate over to make a better educated decision. Good luck
Well, if housing prices are steadily rising and you have very little invested in the house, a more expensive home will carry more leverage. If you sell the house at a profit after a few years, you will have a bigger profit dollar-wise on the bigger house. But as others have said, you will be having higher expenses all along, AND, we all know that there is bigger risk as well, since a bad market will mean bigger losses.
2. Lost revenue as home prices increase ( a $300K home lags behind a $400K home if housing rises 4-5% annually )
On the flip side:
1. You have less home to maintain, clean, heat, and pay taxes, insurance, and mortgage interest on.
2. Lower losses if home prices decrease, and opportunities to put that extra $100K into more diversified investments to lower your risk exposure if the real estate market crashes.
FWIW, a few years ago I moved from a city where real estate prices are quite high to one where homes are much more reasonably priced. One of my reasons for relocating was that, as I got closer to retirement, I was feeling uncomfortable with having over half my total assets tied up in my house. Now that ratio is about 20-25% and I've put the difference in a more diversified investment portfolio.
Best AC I have seen was a wall mounted AC unit. But it wasnt "hey I whacked something together" or "look I mounted in a window". It was literally a extension of the structure on the wall. They had created a enclosed box, and when winter hit you slid the inside door down and the outside venting area down, and turned on the AC unit.
It was actually done REALLY well. And didn't cost an arm and a leg.
I don't recommend moving into a larger home then what you use, yeah it SOUNDS like a good investment if home prices rise, but the issue is....so does your heating, electric, gas, taxes, etc etc. It didn't make financial sense to me. If you want to invest in real estate that way, buy a duplex and rent it out.
My sister and husband have always lived in a house below their means. Their two kids will graduate from college without a dime of student debt.
Mr. Dokie and myself (no kids) have lived the same way. We are now retired, have a very comfortable income with our savings and bought our version of a dream house.
Re the AC, you might look into a mini-split or ductless system. It has an outside compressor like central AC but the evaporator goes directly on the wall of the room you want to cool, instead of venting into ductwork. You can get multiple cooling units on one compressor nowadays.
Thank you for mentioning this. I have not heard of it before, and I will investigate it, thanks to you.
One thing to think about. If you decide to pay down and spend a lot on upgrades, make sure you don't out-improve the neighborhood. You don't want to be the most expensive house on your street. If you can afford it, buying a slightly nicer house in a nicer neighborhood will give you more room to improve in later years and still keep in line with the neighborhood.
Overall, though, if you are totally happy, then stay and use the money for other investments.
When we bought our house we were reasonably conservative and bought a house we could comfortably afford. Since then, however, my wife has nearly tripled her salary, so it's gone from "comfortably afford" to "easily afford". While there are some things we'd like to have (like central AC and a master bathroom), we love the location, most of the neighborhood, and have plenty of space (assuming we don't have too many more kids), so we're perfectly happy to stay here until work or other circumstances necessitate moving.
I don't see a problem with our situation but am wondering if there are good reasons that we haven't thought about more closely align the house we have with what we can afford. Any thoughts or insight is appreciated!
I bought well under what I could afford. No regrets.
Another that downsized & is living below my means..
Realtors always ask "how much can you afford & qualify for"
I always think "lowest price home I need"
Less house = more retirement funds,less taxes,less heat & ac costs, less to repair,
less space for guests to come & stay & stay, less insurance....
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