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Renting out your home is the option with the most potential for headaches. Given that you have to subsidize the mortgage even with great tenants and your goal is a less stressful life, I would suggest removing this option from the table.
The best option would be for your wife to find a job with a shorter commute or telecommute to her current job. But you say that option is off the table. So be it.
If you guys decide selling the house and moving is the best option, spend the next seven months fixing the place up. Take care of all repairs. Hire a staging/color consultant for advise on paint colors and affordable updates that will help you get top dollar. Your goal would be to get as much as you possibly can out of your home.
Then spend what free time you have available researching communities within a reasonable commute of your wife's job. Schools. Neighborhoods. Prices. You may have to par down your belongings and live in a small space for a time while you wait for just the right place.
But if you decide that moving is what you want to do, be smart about it.
Work to get top dollar from your home in the spring and go from there.
Selling and buying is a huge bunch of trouble and will cost thousands. But be smart about the move and find a place that you will be content to stay at for a while.
I am living in my 9th house. How did you buy a house with only $5K down? That is very low and never ran across that before. Good for you but a bigger mortgage. Right now we are in a sellers' market so it is a good time to sell. My guess is that a recession is not far away so now is a very good time to sell.
Our last house was to be our retirement house so we did as you did plus new windows and a roof. Made no difference to people looking to buy. All it did was make our house more attractive than similar houses on the market but no one was willing to pay more. Appliances were not to their liking and a window is a window.
There were no comps in our area and that proved to be a problem. However we had a small mortgage and were able to make a $170,000 profit which we used as a downpayment for a $209,000 house in Florida where I found a job working from home. We are here 9 years and our house is now appraised at $300,000. Mortgage is now paid off.
BTW we waited too long to sell. The township bought the farm next to my house and put up a sign saying that it would be the home of a new golf course with several top end restaurants. Everyone on my block sold. My house was selling for $550,000. However a supposedly knowledgeable friend told me to wait until after they built the golf course and I would get a log more since my home would abut it.
Then along came the recession and made housing market. I was lucky to get $375,000 when I sold and was ready to pull it from the market. Sell when it is a seller's market. The Bull Market will end in the next few years or break a record, and then home sales will go down. My dad died a few moths ago. It is such a seller's market that there is a shortage or certain kinds of houses in desirable areas. His 55 year old tiny ranch 2 bedroom home sold for $530,000. There is a shortage of ranch houses where his was located due to all new building is condo or townhouse due to the high price of land.
Sell as soon as you can. I cannot help you with your finances. As recently retired married man all I can say is that there are lots of one time expenses each month. Thank you Amazon. My fixed expenses were a little less than I planned for since I used the highest monthly bill we had for my planning.
These days renting makes a lot of sense for many people due to the high prices of homes and maintaining them. I know that as I get older I will sell my home and rent right in the same community I live now. They are building apartments right now due go demand since many of us old folk cannot physically or monetarily afford to maintain a home. BTW my wife and I were both licensed Real Estate agents before we moved here.
How much can you rent your current house for? will the rent cover all house expense. Since your house is relatively new, I would not expect much maintenance from your part. Find a good family, do background search, do interview and go with your guts to find good tenant. If the rent covers your house expense, then you are set. Keep it for a year and see how you like being a landlord. Sell it when you are not losing money on the house.
In the mean time move in to a small place near work. Rent it, maybe even get rid of the car as someone suggested. Try it out for a year, see what works. Unless you have financial means to buy another house easily after seeing your current house, I would not recommend getting rid of your house. It takes lot of effort to find and get approved for a house. What if the house price goes up so much that you can't find another house, will you continue to rent? Even if you are renting your current house, if you change your mind or job changes, you can always move in to your house
Just remember that the new tax law has changed some of the former tax policies re selling your home and not declaring profit on tax return
I don't know the specifics but I remember people talking about how the new tax law would impact people who wanted to rent out their primary home
So you might want to check on-line or with a CPA/tax person--
If you decided to rent it out for several years you might have tax issue that would complicate any profit taking
Personally--re the "bad school" effect of home ownership
In TX where I live schools are part of the top 3 factors in choosing/selling homes
Our districts can be much smaller and there can be variety in tax rate so some towns can have 3 different school districts in their city limits
People invariably will chose a better school district for their kids and resale even if the price might be a little higher than comprably home in lesser district
BUT there are many families in my state and others that choose home schooling--not so much because they live in area with "bad" schools but because they don't want their kids going to public school that might espouse different social values than they do--
Often they have a religious bias and can't afford a church school or live close enough to one
So they home school--
Not something I advocate--but I know that even in my area which has good public schools, some parents choose to home school their kids for social value reasons...
I don't know if that is option YOU would consider for your child though
Doing it at a quality level takes a lot of time and effort that requires more than some parents will give
Jobs that are "guaranteed" have about the same level of security as a "guarantee" that your house is going to keep going up in value. In other words, sure, it could be stable and your wife could be there until she retires if she wants. Or the company could get sold tomorrow and all the IT jobs get off-shored to India.
I would never uproot myself, sell my house at a loss and move to an expensive rental in a crappy school district just for a job because every job can potentially disappear tomorrow. I personally think looking for a different job closer to home or that allows telecommuting is a FAR better option - every choice here involves trade offs, but I happen to think changing jobs is the most reasonable trade off under the circumstances.
She can wait until she finds something that seems like a really good fit, but in the meantime, can she carpool or use public transportation so she can get some work done during the commute and cut back on time in the office and get a little shorter workday that way?
Thank you everyone for your valuable suggestions, I had the opportunity to revisit some scenarios basing on your suggestions/comments.
I will answer some of your questions:
We got sellers credit for closing costs and it's a FHA loan, hence the $5k down by payment.
I understand that any person is replaceable at work and even companies can go down, but that is highly unlikely in my wife's situation. moreover, she enjoys what she do and I can not ask her to change jobs. We would rather lose money by selling the house.
We are not looking to buy again if we sell the house, as the house prices are relatively high in most of the areas. We might wait till there is a drop in the prices again (may take few years or more, but that's ok)
When you say I am losing money, here is what I am thinking (I might be wrong):
let's say I sell the house for $275k. My total expenses so far is $37k + $15k in realtor fees. My loan amount is $200k. from where I see, I am still at $23k ($75k from selling - $37k - $15k) positive.
I know that I also paid ~$2k mortgage every month but I would be paying that as rent too all these years if I didnt buy a house. Is my math wrong?
Just remember that the new tax law has changed some of the former tax policies re selling your home and not declaring profit on tax return
I will check this with our CPA, thank you!
Quote:
Originally Posted by loves2read
I don't know if that is option YOU would consider for your child though
Doing it at a quality level takes a lot of time and effort that requires more than some parents will give
home schooling is not an option for us as we both work full time.
She can wait until she finds something that seems like a really good fit, but in the meantime, can she carpool or use public transportation so she can get some work done during the commute and cut back on time in the office and get a little shorter workday that way?
public transportation would be better but it would add 20 more minutes to the commute each way. but i agree that she can relax in the train. She can not work during commute though.
Renting out your home is the option with the most potential for headaches. Given that you have to subsidize the mortgage even with great tenants and your goal is a less stressful life, I would suggest removing this option from the table.
The best option would be for your wife to find a job with a shorter commute or telecommute to her current job. But you say that option is off the table. So be it.
If you guys decide selling the house and moving is the best option, spend the next seven months fixing the place up. Take care of all repairs. Hire a staging/color consultant for advise on paint colors and affordable updates that will help you get top dollar. Your goal would be to get as much as you possibly can out of your home.
Then spend what free time you have available researching communities within a reasonable commute of your wife's job. Schools. Neighborhoods. Prices. You may have to par down your belongings and live in a small space for a time while you wait for just the right place.
But if you decide that moving is what you want to do, be smart about it.
Work to get top dollar from your home in the spring and go from there.
Selling and buying is a huge bunch of trouble and will cost thousands. But be smart about the move and find a place that you will be content to stay at for a while.
Good luck!
thank you! We might have made up our mind and looking for suggestions like this
We will do all that is necessary to get top dollar. We already looked at some decent apartments close to work and for some reason we liked them. we have to see if we can really live there for long time until we are ready to buy again in the areas with good schools.
When you say I am losing money, here is what I am thinking (I might be wrong):
let's say I sell the house for $275k. My total expenses so far is $37k + $15k in realtor fees. My loan amount is $200k. from where I see, I am still at $23k ($75k from selling - $37k - $15k) positive.
I know that I also paid ~$2k mortgage every month but I would be paying that as rent too all these years if I didnt buy a house. Is my math wrong?
You math is wrong from the standpoint that you're looking at the loan amount. You should be looking at the amount you paid for the house, $240,000, to determine the loss. My opinion, but I always look at the big picture.
I did the math quickly before.
$240,000 + 37,000 + 15,000 =292,000 (the cost of the house and selling expenses)
292000-275000(sales price)=$17,000 loss. That's far less than I originally ball parked. You have to ask yourself, were the years you spent in the house worth losing 17K. In your situation I'd probably think of it as extra "rent" for those years.
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