Buying a house for school vs private schools

[mdovell]

Ironically I know a lexington grad that is going to Cleveland for higher ed. Things have changed.

Read the book Ahead of the Curve about HBS. Harvard and MIT are nice but frankly do not stand out nearly as much as they did before.

Buying a house can technically be nice as long as you can afford the long term costs and think of children and grandchildren etc. I think that had more validity generations ago but not as much now.

[NS-GR]

Originally Posted by mdovell

Buying a house can technically be nice as long as you can afford the long term costs and think of children and grandchildren etc. I think that had more validity generations ago but not as much now.

I cannot agree more! However, I would insist that buying a house in areas with “top” public schools is generally a very overrated concept.
The reality is that the average buyer keeps the house for 12-18 years (average around 15) and then they usually downsize.

-Assuming you buy a 3 bedroom at Newton/Lexington etc… that is in move-in condition to avoid extra expenses for repairs etc., you are looking at $800K (at least) and assuming you get a loan of $470K to avoid extra rates for jumbo loans etc. and that you take this for 30 years:
you need to pay 330K downpayment (which really is a significant amount and is money that you can save for retirement, right?).
after 15 years: you have paid about $260K interest and you still owe $310K to the bank.
You have paid taxes that range from $80K - $130K.
You have paid maintenance, the amount of which is difficult to estimate, but the real estate experts will tell you that you should set aside at least 1% of the price of the house, so this is $9K per year, which means $135K.

How is this much better financially than renting or owning a smaller house in an area with average public schools (and thus average house prices...lets say $350-$500K) and pay for private schools, which will end up:
$35K/year x 6 years = $210K for one kid or $420K for two kids, while at the same time, at least based on the current studies, private schools are safer and increase the chances of Ivy placement???

[kingeorge]

Man plans and God laughs.

What might work for one family, is often misery for the other. There is really no one solution that fits all. Plenty of people buy in an expensive town, and still send kids to private schools, and vice versa.

It is also very naive to think that your chosen private school will be accepting your kid. Figuring what will fit, and applying for private schools is as stressful process as buying a home or applying for a college. Process is often full of need to comprise as well. And as it with homes, just because you can like it and can afford it, it doesn't make it a sure thing.

People are overthinking RE. Buy best location that you can afford, and where you will feel at home. Make sure that things like daily commute and amenities work in your favor, and not against you. All other things will sort themselves out.

Instead of fretting about future unnecessarily, give you kids well rounded existence that is not spent in comparing and stressing how they and you "preform" and compare to others. No need to be part of that insecure, and neurotic herd. Waste of life actually.

[bohemka]

I can spend all day weighing the financial pros and cons of distributing my money across housing, taxes and private education in a number of different scenarios, and I could only hope to guess how my choices might benefit my children.

Quite simply, however, I choose to live in a community where everyone has a better chance of receiving a good education, not just those with the extra means or ambition (parental at that). A good school system benefits a community far beyond college prep and resale value.

[tribechamy]

Originally Posted by bohemka

I can spend all day weighing the financial pros and cons of distributing my money across housing, taxes and private education in a number of different scenarios, and I could only hope to guess how my choices might benefit my children.

Quite simply, however, I choose to live in a community where everyone has a better chance of receiving a good education, not just those with the extra means or ambition (parental at that). A good school system benefits a community far beyond college prep and resale value.

Well said.

[johngolf]

When I lived in Andover MA (80's to 90's) their was one child in the neighborhood who went to a private school. He was picked up and dropped of via a private van. He never participated in Andover school activities and a such was an outcast from the local kids. He was a loner as in always alone. I always felt sorry for that kid. I felt the parents did him a disservice.

[mdovell]

Make no mistake the value of a public school system does factor into the value of a house. There is no way to really take that away. However, there can be some limits to that. I personally know people active in Scituate and frankly their system is losing students due to other systems.

There is more competition now in education then there has ever been. Public, charter (technically I consider it charter but a lottery system lowers equity to a point no pun intended), private, religious and online. Back in the day before charter and online things were limited. Now with modern technology pretty much all students can be reached. It's not a matter of if but when.