Decisions, Decisions!!

by Bumble Bee 5 Replies latest jw friends

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  Bumble Bee

  We are thinking of selling our house. We bought some property up north about two years ago and love it up there. Right now we can't move there, but want to retire up there. We built a small cabin over the last two summers and spend most of the summer up there and about every other weekend in the winter. Hubby wants to build the "cottage" (future home), but I don't want to until our mortgage is paid off - about 8 years.

  He's thinking if we sell our house and get something cheaper, we could walk away with a nice tidy sum to build our future home.

  We have two scenarios - 1) find a fixer upper in our town. We looked at a few today. It's a bit of a culture shock and the work that would need to be done seems to be overwhelming to me (I know what a procrastantor my hubby is - would he really get the work done?????). Plus these homes are in more run down areas of town (hence the cheap price).

  2) Buy out of town. We looked at a nice place today. It is small - a one bedroom home, no basement about 800 sq ft, but it has another building almost as big as the house that is easily made into two more bedrooms (we really only need one bedroom - it's just the two of us) or whatever we wanted it to be. There is a three tier deck overlooking a small lake. We'd wake up each morning with a view of the water from the bedroom window. Across the road is seasonal cottages so no real neighbours from mid Oct. to April. The downside is the size of course, we'd have to get rid of alot of stuff!! And the driving. It would take me about 30-40 min to drive to work verses the 10 min drive I have now. Hubby would be about 45-50 min drive (about double he does now).

  It's a bit more than the "fixer uppers" we've seen, and we'd still have a small mortgage, but we'd be able to build on our property sooner (about three years vs 8). I'm fine with waiting, but hubby is anxious to start!

  This was the first house we owned and I love it! But - I also love being up north, and would love to build our own home.

  I hate making decisions!!!!

  BB
• 

  AudeSapere

  It's nice to have options.

  The downside is, of course, you have to choose.

  Congrats on the possibilities!!

  -Aude.
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  Mystla

  We bought a piece of property last spring and are working on building on it. We are a little slow about getting it done (my husband is disabled and needs to rest a lot and can't sit if I'm working, so I rest with him) but we made some progress over the summer. It is so wonderful to be working on something together and our house, when we get it done, will be truely ours.

  My husbands disability income went up enough last spring that I was able to quit my full-time job. We bought an RV to live in on our property and spent the summer clearing and putting up a storage shed. Hubby was pretty wiped out by then, and as we didn't have water or septic on the property yet, we decided to winter elsewhere. (it snows enough here that there is the possibility of getting snowed in for extended periods.. which could be a problem when we need to haul water in jugs from a couple miles away) I can't wait to get back and work on it some more. We are working on getting our permits during the winter so we can be ready to go come spring.

  I know this isn't relevent to helping you decide what to do.. I just wanted to share

  Good Luck!

  Misty
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  garybuss

  I'm a HUGE Dave Ramsey fan and I think it'd be very hard to go broke or make any real bad financial decisions following his advise.
  
  I'm a mathematician and a pragmatist, so I let the numbers decide for me. I just divide a decision to four columns: want, need, practical, and foolish. I just divide the decision into components, list the components on my chart, and compare my chart to my written monthly budget. Want and foolish go into the dumpster.
  
  For me, emotion never enters into a business decision. It's all numbers and good sense.
  
  I manage my own affairs as though I were working as a business manager for a second party. I ask myself, If I were managing this for an out of town investor who I had to account to for loss or gain, would I do it or not?
  
  
  
  
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  XU

  Do you have the option of buying a smaller house and renting out the one you have now? If you rent it, you can have someone else pay the mortgage off in 8 years, then after that, you can have $1000+ bucks a month for retirement or travel coming in from that house. It can be a headache to be a landlord, but sometimes, it makes a lot of sense. If you buy a "cheap house" make it the cheap one in a neighborhood of nicer ones, so that if you fix it up, it'll be worth more, not just cost more to fix. If your husband is anxious to start, let him practice on a fixer-upper. Maybe the fixer-upper could be a rental once you are ready to build on your dream lot. So I just gave you more choices, not help in your decision.
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  BlackPearl

  Here's your solution (since I'm in the mortgage business I think about these things in my sleep) (1) Take a cash out refi on your primary residence to finish the home you want to be live in. (2) Get the right mortgage to do it. NOT soliticing here, but I've got access to a mortgage that will give you a $600.00 per month payment on a $200,000.00 mortgage. This type of mortgage will provide the cash you need to finish your home and in the meantime won't strap with some huge payments. (3) Or...get a construction loan with "Interest reserves" built into it. Interest reserves allow you to take up a year to build without making a single payment. In effect the loan is constructed with the payments for the first year built right into the loan. See.....done, case closed. You don't have to find something else to live in and you get what you wanted. You can PM me if you need more help.

  As a final thought, I do agree with XU on the topic of retaining the current property, it will always make you money. If you can rent it out now, it will be worth far more in ten years from now and at that time you may want to sell it and take the profits. Two things occur there, (1) You will get the benefits of the interest right-off (tax deduction advantage) (2) Your renter will be paying the tab for the next ten years.

  Take todays value and calculate a compounding return at 8% average increase in value. Since I don't know what your house is worth today, it's impossible to do the calculation. At any rate, once you have that, you can get an estimation of "future value" relative to present value. This should help formulate and shape your decision making process.