Success stories of NOT buying more/too much house

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bluelight
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Re: Success stories of NOT buying more/too much house

Post by bluelight » Mon Jan 26, 2015 2:04 pm

I bought my house 21 years ago. 2 bedroom, 1 bath, 900 sq ft. 13 years ago I added a powder room and family room which brought it to just under 1300 sq ft. I paid it off a couple of years ago and will probably sell it when I retire in 2 years. Over the years, the times that I have been grateful that I had a small house that is cheaper to keep have outweighed the few times that I've been tempted to sell and move up. Sure, I'd love to have a 2 car garage and walk-in closet, but at the same time the money that would be needed to pay for a large home goes into my retirement accounts.

RunningRad
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Re: Success stories of NOT buying more/too much house

Post by RunningRad » Mon Jan 26, 2015 2:58 pm

One can always buy more, have more, do more. As one has eloquently said in another venue, "You can have anything you want (within reason), but you cannot have everything you want ." Most of us who could have had more house, chose to have less house, and perhaps more of something else--for me it was more financial security. YMMV
Few decisions in life motivated by greed ever have happy outcomes--Peter Bernstein, The 60/40 Solution

BahamaMan
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Re: Success stories of NOT buying more/too much house

Post by BahamaMan » Mon Jan 26, 2015 4:28 pm

We built our House about 17 years ago. The cost back then was $325K.... We got a mortgage for $200K, that we have since paid off. At the time our real estate agent said we could have easily qualified for a house double in cost. Instead we opted for cheaper living instead of being 'house poor'.....

Our success story - We are now living in a 750 sq. foot apartment that we are renting...... In the Bahamas for the Winter as we are both retired :D

BlueNote
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Re: Success stories of NOT buying more/too much house

Post by BlueNote » Mon Jan 26, 2015 4:49 pm

nyinca wrote:We are happy in our current home but I actively am trying to fight lifestyle creep. Sq footage is fine for current house with 2 kids and we have done nice reno to the house. Would ideally like more land but the houses we are looking at would be 2-3x the cost of our current house (which we can afford). Part of the reason we have not done it is I would like to spend more money on travel as my kids start get a little older. Also having a smaller mortgage means larger monthly cash flow for indexing/investing and less property taxes.

For those who resisted the urge, how did you do it, and how has it enhanced your life? I am not one to compete with the Jones but I do see most of my colleagues falling into this pattern.
This will probably only make your head hurt even more, but since you asked...

We were in the same situation a couple of years ago. Succumbed to creep and bought a house that was 2x the value of the one we had been living in. (Though still easily affordable.) Now that we are two years in we have developed a little lifestyle creepers remorse and are moving back into our old house at the end of the year. (We knew the old house was something special so luckily we kept it as a rental.) Despite that, I can't say that we regret our decision. We've now had an experience that we once dreamed of when we were younger and can now say 'been there done that'. The current house/neighborhood is awesome but at the end of the day, for the most part, a house is a house and a neighborhood is a neighborhood. You adjust back to status quo happiness levels in almost any situation. So back we go. And what's great as we will be able to profit enough from the sale of this house to do some nice remodeling work on the old one.

It wasn't so much the higher house payment that leads me back to the old house. But the higher property taxes and insurance are substantial and those never go away.

heyyou
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Re: Success stories of NOT buying more/too much house

Post by heyyou » Tue Jan 27, 2015 12:28 am

Success stories of NOT buying more/too much house
As is often the case, a multitude of small increments contributed to the final outcome:

Was laid off for six weeks within the first year of buying the first house, so I chose to save more in the future, instead of increasing my house payment.

Got married later, and neither she nor I wanted to raise kids, so we didn't have any.

Shorter commute was a reason to stay put.

Transferred to a low cost of living area and just rolled the equity into the next residence, thus no mortgage there.

Luckily sold a multistory house in 2005, and had the single level retirement house built.

Retired at 55 unexpectedly into the best years of my life, so I'm thankful for my previous housing choices. Your mileage may differ.

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GerryL
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Re: Success stories of NOT buying more/too much house

Post by GerryL » Tue Jan 27, 2015 2:06 am

I bought my 1475 sq ft home in 1990 for a little over $90k with a 10% mortgage. My real estate agent kept telling me I could afford more, but I had no interest in going for the top of my budget just because I could. It was as much house as I needed and more than I had ever imagined I would have.

Shortly after I moved in, the market started to slow and I wondered whether I had paid too much. Then I lost my job and was unemployed for 18 months. If I had listened to the hype and bought more house, I may very well have lost it during that rough time.

But here I am retired and enjoying my well-maintained, cozy home -- all paid off.

2cents2
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Re: Success stories of NOT buying more/too much house

Post by 2cents2 » Tue Jan 27, 2015 6:27 am

We bought a 4BR,2.5Bath 1600sqft home in 1986. We picked a centrally located house, in a good school district that we could afford on only one salary (if one of us lost our job).
We thought about upgrading in 1999, but we still liked where we were living--the location was still good, the schools were good and the overhead on our home was low.
We paid our mortgage off in 2007 (9 years early). If we had upgraded, we would still have a mortgage and our overhead would be much higher. I don't know if I would have been able to retire in 2011 (at age 55). I still like where we are living. DH is still working (he wants to work another 2 or 3 years) and with improvements to mass transit the location is even better than when we first moved here.

PinotGris
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Re: Success stories of NOT buying more/too much house

Post by PinotGris » Tue Jan 27, 2015 7:23 am

nyinca wrote:We are happy in our current home but I actively am trying to fight lifestyle creep. Sq footage is fine for current house with 2 kids and we have done nice reno to the house. Would ideally like more land but the houses we are looking at would be 2-3x the cost of our current house (which we can afford). Part of the reason we have not done it is I would like to spend more money on travel as my kids start get a little older. Also having a smaller mortgage means larger monthly cash flow for indexing/investing and less property taxes.

For those who resisted the urge, how did you do it, and how has it enhanced your life? I am not one to compete with the Jones but I do see most of my colleagues falling into this pattern.
We could have afforded a larger house and a nicer lifestyle when our kids were growing up. I wish we had bought up but did not mostly because we could not agree on it. We have more than enough house now and it is all paid up and our retirement is great financially but i have regrets.

But you need to do what is right for you and not for any other reason. Our daughted moved from a larger house to a smaller, but right near town .she is much happier.

carolinaman
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Re: Success stories of NOT buying more/too much house

Post by carolinaman » Tue Jan 27, 2015 7:26 am

We built a 2,000 sqft brick ranch on 2 acres in 1973. We had 2 young children and they grew up in the house. Once we were empty nesters, we considered buying another house several times and bought building lots on 2 occasions but eventually sold both lots. We especially considered buying another home around the time I retired in 2010, but due to the housing market at the time, we chose to remodel our house instead. We did complete remodel of kitchen and livings spaces which really modernized the interior of our home.

Another reason we never moved is the difficulty in finding 1 to 2 acre lots with the privacy we currently enjoy. We could easily have afforded a much more expensive home but could never find exactly what we wanted at a reasonable price. A lot of my peers have dealt with downsizing and getting 1 story homes as they age. We are already there and are happy where we are.

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obgyn65
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Re: Success stories of NOT buying more/too much house

Post by obgyn65 » Tue Jan 27, 2015 8:30 am

To answer the OP's question, the only home I bought is a small condo in a skyscraper of a large Midwest city. I paid for it cash, about one year's salary, in 2008. I never tried to compete with Joneses. Instead, I plan to live in my condo for many years to come.
"The two most important days in someone's life are the day that they are born and the day they discover why." -John Maxwell

cherijoh
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Re: Success stories of NOT buying more/too much house

Post by cherijoh » Tue Jan 27, 2015 9:36 am

Some of you may find this story and podcast on tiny houses of interest. This was yesterday's topic for a local call in radio show. It gives a different perspective on what some people define as "too much house". :shock:

Slapshot
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Re: Success stories of NOT buying more/too much house

Post by Slapshot » Tue Jan 27, 2015 10:41 am

We bought a modest front-to-back split for $34,000 in 1974. 3 br, 1 ba. First we finished the lower level ourselves with a family room and half bath. Then a few years later we added on a formal dining room and 2 car garage. Each of our sons had his own bedroom, and the house met all our needs. We loved the neighborhood and resisted any urge to splurge on a bigger, more elaborate house even though we could have afforded it. We had it all paid off by the time our kids went to college, and thus we could pay as we went for their education, resulting in no loans or debt for either us or them. About 12 years ago we had a major fire, and with the insurance proceeds we were able to gut the place and add 2 12x14' bedrooms, reconfigure the other rooms, and add another full bath to the lower level. So now we have a bigger home than we ever could have imagined in a great neighborhood and plenty of room for guests. The bottom line is that we bought what we could afford, then added on as needed, and never over-extended ourselves financially.
This time, like all times, is the best of times if we but know what to do with it.

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FuyuKei
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Re: Success stories of NOT buying more/too much house

Post by FuyuKei » Tue Jan 27, 2015 2:19 pm

I wanted an ultra-tiny home for a long time. Like the Tumbleweed ones for ages. If people can live in those, you can live in your house.
http://www.tumbleweedhouses.com/


Why? Freedom from rent. Utility bills that are next to nothing. You want space? Go outside.

You're a human. You really don't take up that much space, and you're probably in the same-ish area most of the day.

Your kids are gonna leave eventually. It's gonna be empty rooms.

surfstar
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Re: Success stories of NOT buying more/too much house

Post by surfstar » Tue Jan 27, 2015 2:37 pm

"Re: Success stories of NOT buying more/too much house"

My g/f just moved into my 1 br apt with me. :D
(Our combined gross annual income is probably right around 175k)


The living room has a gear storage area that spans from (L to R) SCUBA, climbing, ski/snowboard, backpacking, to surfboards.
We prefer to have fun on our weekends vs "work on the house".

EnjoyIt
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Re: Success stories of NOT buying more/too much house

Post by EnjoyIt » Tue Jan 27, 2015 2:44 pm

Although we bought a house that is 1:1 income:price ratio, I still feel we bought to big.

It costs more to heat, furnish, and keep clean. It also costs more for lawn care as the yard is too big for us to maintane ourselves. We can definitely afford it, but because of this house it will take a few years longer to be financially independent. I am not sure the trade off is worth it. If we bought a more reasonable house at maybe .75 of my income, we would be much much closer to debt free today.

The only solice is that we bought at the bottom of the market and the value of the house has gone up nicely. We are strongly considering selling, and downgrading. I think we could even get a 5:1 arm and then pay it off within those 5 years.

Unfortunately it would leave us with the hassle of selling and moving. Something neither of us are looking forward to.

basspond
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Re: Success stories of NOT buying more/too much house

Post by basspond » Tue Jan 27, 2015 3:52 pm

Paid off house in 16 years and socking away money for college and other large purchases. No mortgage in retirement will be an added piece of mind.

Count of Notre Dame
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Re: Success stories of NOT buying more/too much house

Post by Count of Notre Dame » Sun Sep 22, 2019 11:23 am

We live in Southern California and recently upgraded from a 2,300 sqft ($1.25M) to a 5,700 sqft home ($1.975M). The reasons we did it? I wanted a much bigger lot with entertaining backyard (I watch college football the entire fall), a casita for my sister who lives with us during the week and takes care of my children while my wife and I work, and lot privacy. We still bought about 1k more square footage than we needed. What did that cost us? We feel a bit trapped continuing to work for another 15-20 years (we're both 35 years old making a combined $750k per year) to pay for private school ($2.3k per month), my sister ($2k), student loans ($4k), mortgage ($6.6K) and property taxes ($1.6k) - but we do not hate our jobs. I also underestimated maintenance costs. Our home costs $200 to clean, landscaping ($240), pool ($100) and not to mention countless things that break. Why did we do it? These next 15 years will be the best of our lives as we raise children, and we wanted to enjoy it as much as possible. I also have trouble envisioning what I would do if I didn't work. The answer isn't watching my children all day (I do spend 3-4 hours per day with them and all of the weekends). I don't have a passion for anything besides food and travel, and too much of that would be detrimental to my health. When you have young children you don't even have the time to figure out what your hobbies would be! I suppose we will try to payoff the mortgage in 15 years, wait to see if our children want to live at home for a while after college, and downsize after that. My dream is to retire in Santa Barbara but I fear that will be even more expensive than where we currently live. We are saving about $200k per year so we managed to not lifestyle inflate in the other categories that our neighbors spend a lot of money on (cars, clothes, etc.). We both drive 10 year old cars that have been paid off for a long time, that cost 1/4 of our neighbors. Sorry for the jumbled thoughts!

Count of Notre Dame
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Re: Success stories of NOT buying more/too much house

Post by Count of Notre Dame » Sun Sep 22, 2019 11:59 am

danwhite77 wrote:
Sun Jan 25, 2015 11:25 pm
Carefreeap wrote:
ERMD wrote:
stemikger wrote:
nyinca wrote:When it comes to success stories, Warren Buffett has been asked why he doesn't have a house that many billionaires have and his standard answer is that he's happy there and he's cool in the summer and warm in the winter.
good point.. Buffett is just about the best example you can cite for this thread. he's worth 68 billion dollars and his omaha property is a grand total of 6000 sq feet. the home itself couldn't be more than 2500.
LOL the house is over 6000 sq.ft! Believe me it does look a little odd in the neighborhood.
I am friends with people in his neighborhood. He lives in a completely nondescript house compared to other billionaires, it's the same place he bought in the fifties (with minor additions).

On the one hand, here's Warren's house:

http://cdn-ugc.cafemom.com/gen/min/200/ ... 01azzo.jpg

And on the other hand, here's Bill Gates's compound:

http://www.idesignarch.com/wp-content/u ... ouse_1.jpg

And Larry Ellison's compound:

http://hauteliving.com/wp-content/uploa ... ison06.jpg

I think Warren's fits just fine in Omaha.

Edit: Gates and Ellison have "compounds" not "houses."
I don't want to take away from the redeeming qualities Buffet has, but what he does not have (or probably ever had) was a loving relationship with his spouse and an ability to enjoy himself and his wealth. I like the idea of being happy with what one has, but at some point you're just a miser if you can't let yourself enjoy 0.5% of your billions. I wouldn't trade places with him.

Freetime76
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Re: Success stories of NOT buying more/too much house

Post by Freetime76 » Wed Sep 25, 2019 3:16 pm

I'm enjoying the perspectives in this thread about resisting the pull for a larger place, since we're about to have this same decision to make.

We're moving from a 2000 sq foot 3 BR/2 bath about $500K house (midwest) to hopefully a smaller house, with more land a little further south. There are 3 rooms in our house plus half of the living room that we do not use. Maybe one of those bedrooms is used for 10 days of the year *if* family visits...maybe. For the other 355 days of the year, I end up running the vacuum (or Swiffer or washing the floor) back and forth, back and forth, until all that gigantic, wasted surface area is done. Especially if the dog is blowing her coat. Nope, Never Again.

Our next house is going to be useful and compact. Rather than "spend it all", it should cost about half as much, also with cheaper utilities and property taxes. I'm also insisting on not having gigantic expanses of lawn to mow and trim - our current place takes 4 hours to complete. That basically is my whole Saturday.

I should mention that our 2000 sq ft house with 1 car attached garage is one of the *smaller* ones on the market in our area - the others are well over 3000 sq ft with multiple car attached garages and vast lawns (why???? :shock: well, maybe they have a lawn service). Also, there seems to be a tendency towards more complex rooflines... this results in some interior spaces that are quite interesting and a few questionable valleys/junctions that have got to be prone to collecting ice. I guess if you want 4780 sq ft of space, you don't want to be in just a big box, so we add appendages :) for visual interest. Or maybe the roofing companies give a kickback to the local architects so that their kids will have very nice college funds, because those "lifetime" shingles don't really last a lifetime. But I digress...

The most comfortable I've been was in a 932 square foot house in PA. It was my mom's (a flip) that I stayed in whilst in between selling/buying houses. It had "just enough" for me - one bathroom meant one toilet and tub/shower to clean (only). Small kitchen meant less to worry about cleaning/stocking. It was cozy instead of cavernous. No wasted space. I was happy by myself and not lonely.

For the houses I've lived in, I noticed that sq ft can be misleading. Some had a lot of space that wasn't really used for anything - big landings, long hallways, odd corners - yes, a bigger area, but not really more living space. The smaller sq ft house sometimes felt larger to me. The biggest house I lived in had this beautiful living room with huge windows at one end and a fireplace at the other, lofted to the 2nd floor ceiling. Pretty as a magazine picture - at least I thought so! But when you actually live there, the room made no sense what-so-ever because everything was diagonal and - again - this vast expanse of flooring to vacuum for a room nobody was *ever* comfortable in. It's a funny thing. Sarah Susanka was onto something.

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LilyFleur
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Re: Success stories of NOT buying more/too much house

Post by LilyFleur » Wed Sep 25, 2019 3:43 pm

Downsized to a 1000 sf condo in HCOL coastal area. I do feel it is important to have two full bathrooms and a washer and a dryer, and I have those, as well as two patios that make the place feel bigger. It's a great floor plan and single story for aging in place. A short walk to the grocery store, and a ten-minute drive to an excellent hospital and doctors' offices. I had multiple garage sales when I downsized, and I don't miss all that stuff one little bit. My goal is to continue keeping closets cleaned out and keep my footprint small. More fun, less cleaning!
Last edited by LilyFleur on Wed Sep 25, 2019 3:46 pm, edited 1 time in total.

Quirkz
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Re: Success stories of NOT buying more/too much house

Post by Quirkz » Wed Sep 25, 2019 3:46 pm

leonard wrote:
Mon Jan 26, 2015 12:24 pm
I don't understand, why would anyone have an URGE to upgrade houses and experience the following:

1. Moving Non-financial costs. Moves are a huge time sink. They are extremely stressful. You refocus your entire life for several months. There is a huge cost in productivity working and in your personal life. Work to "fix up" the old house. Work to get the new house up to your standards.
I'm probably weird, but I like moving. It's an excuse to do deep cleaning and reorganizing, and there's something nice about turning a new place from empty space into a cozy home. Also, you get to leave all the obnoxious things from the old place behind. (Nevermind there's probably new obnoxious stuff that you're waiting to discover.)

Your other points I completely agree with.

I've avoided house issues by being very realistic about what we could afford. There just isn't a lot of extra room in the budget, and the priority would not be to expand the housing portion of it. We're in a moderately expensive area. We stretched once, when young, and it took a few years to financially grow into the place. Since then we've had a steady-state in the budget: earn more, but pick up more expenses (kids) or slip back (DW working less, then staying home), while house prices in the area have surged out of reach. In one move we actually downsized a little in order to get a better location. I would really love one more bedroom that could be an office/workout space, but at this point I'd have to take on an extra $150k in mortgage to get it, and it's just not worth it.

FoolMeOnce
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Re: Success stories of NOT buying more/too much house

Post by FoolMeOnce » Wed Sep 25, 2019 4:03 pm

Count of Notre Dame wrote:
Sun Sep 22, 2019 11:23 am
We live in Southern California and recently upgraded from a 2,300 sqft ($1.25M) to a 5,700 sqft home ($1.975M). The reasons we did it? I wanted a much bigger lot with entertaining backyard (I watch college football the entire fall), a casita for my sister who lives with us during the week and takes care of my children while my wife and I work, and lot privacy. We still bought about 1k more square footage than we needed. What did that cost us? We feel a bit trapped continuing to work for another 15-20 years (we're both 35 years old making a combined $750k per year) to pay for private school ($2.3k per month), my sister ($2k), student loans ($4k), mortgage ($6.6K) and property taxes ($1.6k) - but we do not hate our jobs. I also underestimated maintenance costs. Our home costs $200 to clean, landscaping ($240), pool ($100) and not to mention countless things that break. Why did we do it? These next 15 years will be the best of our lives as we raise children, and we wanted to enjoy it as much as possible. I also have trouble envisioning what I would do if I didn't work. The answer isn't watching my children all day (I do spend 3-4 hours per day with them and all of the weekends). I don't have a passion for anything besides food and travel, and too much of that would be detrimental to my health. When you have young children you don't even have the time to figure out what your hobbies would be! I suppose we will try to payoff the mortgage in 15 years, wait to see if our children want to live at home for a while after college, and downsize after that. My dream is to retire in Santa Barbara but I fear that will be even more expensive than where we currently live. We are saving about $200k per year so we managed to not lifestyle inflate in the other categories that our neighbors spend a lot of money on (cars, clothes, etc.). We both drive 10 year old cars that have been paid off for a long time, that cost 1/4 of our neighbors. Sorry for the jumbled thoughts!
Will it really take 15-20 years to pay off the house with $750k income (that presumably will grow, while the house payment will not)?

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Re: Success stories of NOT buying more/too much house

Post by afan » Wed Sep 25, 2019 4:06 pm

We stayed in our starter house for 18 years. Only moved when careers took us to another city. We loved that house. It had plenty of land, being in the exurbs, but a painfully long commute.
The money we saved by having a small mortgage and low taxes was all invested and we are way better off for it.
An incidental benefit- by not buying in an expensive neighborhood we had neighbor and our kids had friends who were more likely schoolteachers than physicians or lawyers. The whole expectations about how one lived were more modest.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

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Re: Success stories of NOT buying more/too much house

Post by friar1610 » Wed Sep 25, 2019 4:13 pm

Our first house was a 1650 or so sq ft house in a DC suburb (Montgomery Cty but certainly not Chevy Chase or Potomac) that we bought in 1976 upon returning from an overseas tour with the Navy. Kids were 4 & 6. Lived there 3 years, transferred out of the DC area for 5 years but rented the house out. Returned to DC in 1984 and felt the house was way too small. But we moved back in "just until we found something better". For a variety of reasons, we never moved until we got transferred out of the area again 5 years later.
- kids reunited with old friends and didn't want to change schools
- the DC Metro proved to be a great boon to commuting (for both me and my wife who went back to work after the kids were in HS)
- the payments on the house now seemed low
- real estate prices had risen such that any house that was enough bigger to make a move worthwhile was more than we wanted to pay
- We had begun aggressively saving/investing by then and we were really starting to sock it away, particularly for college tuition

When we transferred out 5 years later we resolved that we would not return to DC so we sold the house (at a very nice profit and lived in base housing for the next assignment. But I attribute the fact that we were able to pay for both kids to go private colleges and graduate with no debt - either ours or theirs - to the fact that we stayed in that modest house for those 5 years. Had we stretched for the bigger, nicer house we would have had that increased debt and I'm sure loans for college would have come into play
.
We have since lived in bigger, nicer houses (and have easily afforded them) and are no worse for wear having spent those 5 years in the smaller house.
Last edited by friar1610 on Wed Sep 25, 2019 4:54 pm, edited 1 time in total.
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rj342
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Re: Success stories of NOT buying more/too much house

Post by rj342 » Wed Sep 25, 2019 4:22 pm

Not really planned, but has worked out well enough.

In a more or less LCOL area, bought home in 1992 a year after we got married (built in 1990, one owner). Got a somewhat bigger house than typical for the 'starter' home at 1750 sq ft, but not as big/nice as we would have otherwise liked. There were nicer homes in a neighborhood in a more ideal location that were just going in, more in the 2300-2600 sq ft size w a bonus room over garage etc, but those were at the top of our preapproved loan range and we just weren't comfortable with the payments. We are still in that same first house today. Only ever had one child, who is in his senior year in college, so we have had enough space. Career path took a hit a few years ago, but house is paid off, so I can do without that one extra big room and/or extra plush master bathroom we would have liked otherwise.

mptfan
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Re: Success stories of NOT buying more/too much house

Post by mptfan » Wed Sep 25, 2019 4:50 pm

Count of Notre Dame wrote:
Sun Sep 22, 2019 11:59 am
I don't want to take away from the redeeming qualities Buffet has, but what he does not have (or probably ever had) was a loving relationship with his spouse and an ability to enjoy himself and his wealth. I like the idea of being happy with what one has, but at some point you're just a miser if you can't let yourself enjoy 0.5% of your billions. I wouldn't trade places with him.
That is a judgmental comment. I have seen many interviews with Warren Buffett, and my impression is that the man is happy with his life and does enjoy himself. He is free to live his life how he wants to live (obviously he does not have financial limits on his choices) and my impression is that he does just that...just because he could afford to spend more money does not mean he would be happier spending more money. You should not judge someone you've never met as being unable to enjoy himself.

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Re: Success stories of NOT buying more/too much house

Post by AerialWombat » Wed Sep 25, 2019 4:57 pm

My starter home in 2015 was a duplex. My side was 1 bedroom, 1 bath, 500 sq ft. Rent from the little 2-bedroom unit on the other side paid just about all the mortgage. 100% financing on VA loan. I kept this duplex and bought my next house, also small, also on a VA loan. After a little over a year, bought another small house, rinse, rent, repeat.

The positive cashflow from the first two houses, even after property management fees, is adequate to support my absolute minimum personal lifestyle expenses. I’ve since purchased a number of additional rentals, but none perform like that dinky little duplex.

I’m getting sick of moving, so am looking for my “forever home”. It will likely be a very small house, definitely under 1,000 sq ft, but I am splurging for some acreage and riverfront. Free fish.
“Life doesn’t come with a warranty.” -Michael LeBoeuf

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Re: Success stories of NOT buying more/too much house

Post by Hector » Wed Sep 25, 2019 5:25 pm

here is my un-success story.
We moved to a different location (where we live currently) 8 years ago. We did not have kids then. A very good friend of mine told me to buy house. We had money, but I thought we don't need house now and we rented. I thought we will buy it after we have kids. Fast forward today, house prices appreciated so much that we can not afford to buy now.

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Re: Success stories of NOT buying more/too much house

Post by ncbill » Wed Sep 25, 2019 6:21 pm

Grew up in a 6,000 sqft. house...watched mom nearly go broke trying to keep it up after the divorce.

Built in the 1920s...lots of (slate) roof, plumbing, electrical issues.

Antiquated steam boiler & radiators for heat, no AC.

Many "dead" rooms that were never used...e.g. formal living room, dining room, library.

Live in a townhouse about 1/3 the size now...pay a modest monthly fee which covers all outside maintenance (including roof/painting)

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Re: Success stories of NOT buying more/too much house

Post by Golf maniac » Wed Sep 25, 2019 7:12 pm

What we did was any raise or promotion we took 50% and put it in retirement or investments. This set our budget a lot lower for a home. I did this from 25 years old and it gave me the ability to retire at 56. If you take the money and put it in things (homes, cars, lifestyle) it is easy to get trapped in the constant upgrades. But I found satisfaction in seeing my money grow.

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Re: Success stories of NOT buying more/too much house

Post by Dottie57 » Wed Sep 25, 2019 7:23 pm

I’ve lived in my starter condo for thirty some years. I never upgraded because I didn’t *need* more space even though I wanted more space and a few other things. Retirement savings were my first priority. Now I have what I need to be retired at 62.

mindboggling
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Re: Success stories of NOT buying more/too much house

Post by mindboggling » Wed Sep 25, 2019 7:26 pm

For many years I lived and worked in New York City. I bought an inexpensive condo about 100 miles outside of the city and some years later bought an inexpensive house in the same village. I paid $56,000 for the house (needed some renovations :happy ). Some people where I worked suggested I buy as much house as I could finance. Best advice I never took! The small house let me keep my savings rate high and I continued to invest in the ongoing bull market in stocks. Retired from full-time work in 2013 at 60.
In broken mathematics, We estimate our prize, --Emily Dickinson

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Re: Success stories of NOT buying more/too much house

Post by TallBoy29er » Wed Sep 25, 2019 7:27 pm

Dottie57 wrote:
Wed Sep 25, 2019 7:23 pm
I’ve lived in my starter condo for thirty some years. I never upgraded because I didn’t *need* more space even though I wanted more space and a few other things. Retirement savings were my first priority. Now I have what I need to be retired at 62.
I love this ^! :D

My smaller house success story with a family is that we don't have room for all the junk (aka, crap, $h!t, etc) that others tend to accumulate in larger houses. It not just keeps costs down, it keeps life simpler. :beer

dboeger1
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Re: Success stories of NOT buying more/too much house

Post by dboeger1 » Wed Sep 25, 2019 8:02 pm

I've never owned a home so I realize I wasn't being asked, but I'd like to chime in anyway. I think a valuable skill to have as a consumer is being able to judge the value of something TO YOU, as opposed to the market at large. Those are two very different things. The market seems to value VIP bottle service at nightclubs way more than I do. A lot of people like to say things like, "it's worth what someone is willing to pay for it," but I feel like that's an oversimplification. The reality is that what you ultimately get out of your purchase will have a certain value to you as an individual, and it's on you as a consumer to avoid paying more than that as much as possible.

A recent example from my life that highlights this was when I started thinking about buying a cheap beginner kayak. I've always been fascinated by boats, and I thought it would be cool to be able to go out on some lakes or at the beach. I thought I had pinned down my price range, when suddenly I realized that it was not going to be so easy and free as I thought. It turns out I live in an area where access to bodies of water is highly regulated and scrutinized due to a combination of dry conditions and invasive species. Most of the places I wanted to take a kayak to are either closed off to watercraft or limited to rental companies operating there under supervision. The few remaining charge all kinds of fees for inspections and whatnot. When I added everything up, it turned out the annual costs were going to far outweigh the initial investment in the kayak. More importantly, as a busy person, I value the freedom of being able to go whenever I want, even late at night after a long day at work. In the end, I decided that the combination of additional costs and the devaluation of the experience I originally thought I was getting into was too much, and I was no longer willing to pay what it cost to go forward with it. The thing is, had I just went ahead and bought it without doing my research, the experience I would've ultimately ended up with would have been exactly the same. The only difference is that I did the research needed to allow me to bring my expected value closer to reality. That's why I think saying stuff like, "it's worth what you're willing to pay for it," just isn't correct. Without a magical crystal ball, we can't know what something will ultimately be worth to us, and it takes careful analysis to approximate that. I'm sure many smokers would've avoided the habit had they known the full costs ahead of time, both financial and medical.

I apply this kind of thinking to all purchases. So in your case, what are you actually buying with your money if you do purchase a home with more land? Do you just feel like you need it, or have you actually listed some concrete ways you would use the land? Are you planning to grow a garden, dig a pool, or set up a soccer field? Can you put dollar figures on what you'd be willing to pay for those things? And if so, how do those compare to sensible alternatives? Could you go to a public field, park, or pool for a fraction of the cost? And if so, are you willing to pay the premium to have that land be part of your home? Until you answer these questions, you can't really make an informed decision on whether or not it's worth it to you to buy a house on a bigger plot.

Spoiler alert: homes are some of the biggest purchases people tend to make in their lives, so unless you're rolling in dough (which you may be, and if so, congratulations), chances are that the added cost just isn't going to be worth it to you. More land can cost as much as several lavish vacations depending on the places you use for comparison.

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Re: Success stories of NOT buying more/too much house

Post by almostretired1965 » Wed Sep 25, 2019 8:57 pm

My wife and I bought our first and to date only house about 1 year after we moved to NoVA after grad school. At the time we bought more than we needed, ~2300 sq ft and another 1500 or so unfinished space in the basement. When we were looking we saw a place with, I think around 4000 sq ft on 5 acres in Fairfax Station that we could have swung if we wanted to be house poor. The place was beautiful. But we knew we would be in a world of hurt if either of us lost our jobs for some reason, so we went with the more conservative choice. Anyway, at the time we were also thinking about starting a family in a few years and we would grow into the space. Never happened but we stayed put for the next 25 years. Even then, for the first few years we felt compelled to furnish every empty room in the house with stuff that probably got used once or twice a year.

The older I've gotten, the less enamoured I am with big houses and big lots. Seriously, how much space and stuff do two people really need?
Last edited by almostretired1965 on Thu Sep 26, 2019 1:21 pm, edited 1 time in total.

Dregob
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Re: Success stories of NOT buying more/too much house

Post by Dregob » Wed Sep 25, 2019 9:24 pm

We bought our 3 bedroom 1400 sq ft house with a 15 year mortgage and it felt huge. Two kids later if felt small and we looked to add an addition or move. We did neither but we did pay off the house in a little less than 15 years. 25 years later both kids are out of the house and we've got a guest room and my wife has a sewing room and no mortgage payment.
How did we do it? We did it by doing nothing!

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Re: Success stories of NOT buying more/too much house

Post by tooluser » Wed Sep 25, 2019 9:37 pm

http://www.house-crazy.com/richard-nixo ... ace-house/

Both great and terrible achievements depend on house size? :confused

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Re: Success stories of NOT buying more/too much house

Post by ERguy101 » Wed Sep 25, 2019 9:41 pm

So, I recently fought house creep. What I did instead was spend about $12,000 doing some work to my house. I had a beautiful wetbar built, some large book cases, a beautiful built in closet for my bath towels, etc, and some custom drawers in my closet.

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Re: Success stories of NOT buying more/too much house

Post by Cubicle » Wed Sep 25, 2019 10:14 pm

I bought "tiny" 1600 square foot house after moving out from my parents. I was told from everyone I knew, family, realtor, mortgage, "buy bigger now, you'll outgrow a small house quickly". Words cannot express how freeing it is to know I can pay off my mortgage if I lose my job tomorrow.

And I echo about needing to keep up in everything else, clothes, vacations, landscaping, cars. Its a *vicious* cycle if you truly don't want that. I still get ragged on for driving a literal rust bucket (among my several old cars). I then mention my car payment is zero dollars.

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Re: Success stories of NOT buying more/too much house

Post by maroon » Thu Sep 26, 2019 1:08 am

I own a true tiny house. It's a custom-built casita, not the portable kind on wheels. I bought it as a foreclosure for less than a year's salary. Honestly I'd prefer a bigger house, but living in a tiny house is enabling me to retire early (presuming I figure out the health insurance part). I have no mortgage, minimal household bills, and I'm saving 40+% of my income.

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Re: Success stories of NOT buying more/too much house

Post by CyclingDuo » Thu Sep 26, 2019 6:54 am

Count of Notre Dame wrote:
Sun Sep 22, 2019 11:59 am
I don't want to take away from the redeeming qualities Buffet has, but what he does not have (or probably ever had) was a loving relationship with his spouse and an ability to enjoy himself and his wealth. I like the idea of being happy with what one has, but at some point you're just a miser if you can't let yourself enjoy 0.5% of your billions. I wouldn't trade places with him.
Nor he with you. :mrgreen:

https://www.inc.com/minda-zetlin/6-thin ... y-too.html

https://medium.com/swlh/the-7-habits-of ... 41ca3409e3

https://psychcentral.com/blog/how-warre ... happiness/

https://thriveglobal.com/stories/warren ... appy-life/
"Everywhere is within walking distance if you have the time." ~ Steven Wright

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Re: Success stories of NOT buying more/too much house

Post by CyclingDuo » Thu Sep 26, 2019 7:30 am

Cubicle wrote:
Wed Sep 25, 2019 10:14 pm
I bought "tiny" 1600 square foot house after moving out from my parents. I was told from everyone I knew, family, realtor, mortgage, "buy bigger now, you'll outgrow a small house quickly". Words cannot express how freeing it is to know I can pay off my mortgage if I lose my job tomorrow.

And I echo about needing to keep up in everything else, clothes, vacations, landscaping, cars. Its a *vicious* cycle if you truly don't want that. I still get ragged on for driving a literal rust bucket (among my several old cars). I then mention my car payment is zero dollars.
What we all know is the data continually shows us that by keeping the big three major cost items low - housing, transportation, and food - a successful equation is formed for accumulating wealth. Your housing choice (kudos to you for ignoring those who told you to buy bigger), your transportation choice(s) - and I would imagine other lifestyle choices you have made - have formed the bedrock equation for you.

Congratulations!

We used a formula when purchasing our home at the time to keep our costs low, but also focused on getting a comfortable home we could enjoy (PITI was never higher than 10-12% of income). Our home was the right size for a family of four when we purchased it and had kids in elementary school. It had a 5 year tax abatement by the city at the time of purchase as it was a brand new home, and that jived well with my wife's planned return to the work force after taking a few SAHM years to raise our young children. She was back in the work force and we were a dual income household again just as the property tax abatement ramped up in year 5 to the full amount.

Fast forward 17 years and now our home is actually larger than we need for our empty nest years (it's 4000 square feet and we pretty much confine ourselves to using only about 2000 square feet of it on a daily basis). Fortunately the yard is just the right size that we can easily take care of it all ourselves. We've slowly begun the decluttering process in the past 12 months as we contemplate our options for the upcoming years in retirement that are 4-5 or so years away.

We have never financed any vehicle and always pay cash. Our home has an excellent kitchen, and grilling/bbq/fire pit/patio and deck area as we are foodies who love to cook and prepare all of our meals.

At least in terms of keeping housing costs low from the get go, it frees up money for maintenance/repairs and other items in the household budget. Obviously, home prices and costs are location specific, but avoiding being house poor is tantamount to a having a healthy balance sheet and cash flow to create the building blocks of saving, investing and wealth.
"Everywhere is within walking distance if you have the time." ~ Steven Wright

MnD
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Re: Success stories of NOT buying more/too much house

Post by MnD » Thu Sep 26, 2019 8:20 am

We bought a 1950's ranch-style house with a big yard in 1991 in a boring unpopular inner ring suburb for $108K. Two conforming bedrooms plus a non-conforming tiny third bedroom, 2 bath. Everyone that could afford to was buying new, fancy multi-level houses (pressboard palaces) on little tiny lots much farther out. Fast forward 28 years the house has gradually been restored and modernized end to end, light rail was built nearby, authentic late 1800's (what was mostly boarded up) old town within walking distance took off and is now filled with independent restaurants, drinking establishments and shops. Demand from millennials, retiring baby-boomers is off the charts for homes in this neighborhood. A sale would bring around 750K but as active early retirees with both kids moved out we aren't moving anywhere. :beer

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Re: Success stories of NOT buying more/too much house

Post by Atilla » Thu Sep 26, 2019 8:39 am

One thing that really helps avoiding buying too much house is having a paid off mortgage.

Where we live now the house is just fine, but the neighborhood has gone to crap and is getting worse.

BUT it's paid off and all our things are here. Taking on a mortgage after years of no payments and/or dipping into taxable investments to upgrade to a better neighborhood gives us both the willies. Every new dollar we spend on housing makes it that much longer I have to keep working.

So for now we are casually looking but making no plans to move for another 3- 4 years.
Moderator Warning-Free Since 2017.

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Re: Success stories of NOT buying more/too much house

Post by bligh » Thu Sep 26, 2019 9:33 am

mptfan wrote:
Wed Sep 25, 2019 4:50 pm
Count of Notre Dame wrote:
Sun Sep 22, 2019 11:59 am
I don't want to take away from the redeeming qualities Buffet has, but what he does not have (or probably ever had) was a loving relationship with his spouse and an ability to enjoy himself and his wealth. I like the idea of being happy with what one has, but at some point you're just a miser if you can't let yourself enjoy 0.5% of your billions. I wouldn't trade places with him.
That is a judgmental comment. I have seen many interviews with Warren Buffett, and my impression is that the man is happy with his life and does enjoy himself. He is free to live his life how he wants to live (obviously he does not have financial limits on his choices) and my impression is that he does just that...just because he could afford to spend more money does not mean he would be happier spending more money. You should not judge someone you've never met as being unable to enjoy himself.
I would wager that Buffet has given more to charity than most everyone on this forum will earn in our lifetimes, combined. Miser is a ridiculous word to use to describe him.

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bligh
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Re: Success stories of NOT buying more/too much house

Post by bligh » Thu Sep 26, 2019 9:43 am

Atilla wrote:
Thu Sep 26, 2019 8:39 am
One thing that really helps avoiding buying too much house is having a paid off mortgage.

Where we live now the house is just fine, but the neighborhood has gone to crap and is getting worse.

BUT it's paid off and all our things are here. Taking on a mortgage after years of no payments and/or dipping into taxable investments to upgrade to a better neighborhood gives us both the willies. Every new dollar we spend on housing makes it that much longer I have to keep working.

So for now we are casually looking but making no plans to move for another 3- 4 years.
Assuming you buy a similarly priced house in a different neighborhood, you'd just be transferring equity over from one place to the other. Your additional costs would only be in the form of transaction costs (realtors and such), and the possibly higher property taxes or depending on the state you live in. HOA, Insurance and maintenance can all be controlled for so that you don't have to increase it over your current place.

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Re: Success stories of NOT buying more/too much house

Post by wolf359 » Thu Sep 26, 2019 9:46 am

My DW wanted a big house that was new construction in a good school district. This meant that it was a relatively HCOL area.

So we stretched a little, but with the following caveats:
1) We had to afford it under one income.
2) The mortgage had to stay below the thresholds for a jumbo loan. That meant if we got a bigger house, we had to be able to make a larger down payment to keep the mortgage below that limit. That compromise allowed her to get the larger nicer house but ensured we kept it easily affordable.
3) The other reason I wanted a conforming loan was that the interest rates were better.
4) We allowed room to expand. The house was big enough for our requirements, but the basement was unfinished. This allowed us to expand the living space by a third if we wanted it in the future.

It's now more than 15 years later.
- My wife is happy with the house. This is the most important aspect.
- We were never underwater during the bad days of 2008, so we could always have sold if we had to. We were also lucky because prices ran up for 5 years after we bought, so there was more room for it to decline.
- We also never had to sell, because we could afford to pay the house on one income.
- The bigger house in the nicer neighborhood meant that housing prices recovered faster than the less desirable neighborhoods.
- Our mortgage payments are less than those of people in smaller (more normal-sized) houses. This is because almost all houses in the area now require jumbo loans, and because the jumbo loan threshold is double what it was 15 years ago.
- We did eventually finish the basement, which gave us the excitement similar to moving into a new place. I was able to pay for the improvements in cash. That gave us more house while staying in place. The only problem with this upgrade is that our real estate taxes have gone up more than the utility increased (but we knew that going in).

EnjoyIt
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Re: Success stories of NOT buying more/too much house

Post by EnjoyIt » Thu Sep 26, 2019 9:49 am

dboeger1 wrote:
Wed Sep 25, 2019 8:02 pm
I've never owned a home so I realize I wasn't being asked, but I'd like to chime in anyway. I think a valuable skill to have as a consumer is being able to judge the value of something TO YOU, as opposed to the market at large. Those are two very different things. The market seems to value VIP bottle service at nightclubs way more than I do. A lot of people like to say things like, "it's worth what someone is willing to pay for it," but I feel like that's an oversimplification. The reality is that what you ultimately get out of your purchase will have a certain value to you as an individual, and it's on you as a consumer to avoid paying more than that as much as possible.

A recent example from my life that highlights this was when I started thinking about buying a cheap beginner kayak. I've always been fascinated by boats, and I thought it would be cool to be able to go out on some lakes or at the beach. I thought I had pinned down my price range, when suddenly I realized that it was not going to be so easy and free as I thought. It turns out I live in an area where access to bodies of water is highly regulated and scrutinized due to a combination of dry conditions and invasive species. Most of the places I wanted to take a kayak to are either closed off to watercraft or limited to rental companies operating there under supervision. The few remaining charge all kinds of fees for inspections and whatnot. When I added everything up, it turned out the annual costs were going to far outweigh the initial investment in the kayak. More importantly, as a busy person, I value the freedom of being able to go whenever I want, even late at night after a long day at work. In the end, I decided that the combination of additional costs and the devaluation of the experience I originally thought I was getting into was too much, and I was no longer willing to pay what it cost to go forward with it. The thing is, had I just went ahead and bought it without doing my research, the experience I would've ultimately ended up with would have been exactly the same. The only difference is that I did the research needed to allow me to bring my expected value closer to reality. That's why I think saying stuff like, "it's worth what you're willing to pay for it," just isn't correct. Without a magical crystal ball, we can't know what something will ultimately be worth to us, and it takes careful analysis to approximate that. I'm sure many smokers would've avoided the habit had they known the full costs ahead of time, both financial and medical.

I apply this kind of thinking to all purchases. So in your case, what are you actually buying with your money if you do purchase a home with more land? Do you just feel like you need it, or have you actually listed some concrete ways you would use the land? Are you planning to grow a garden, dig a pool, or set up a soccer field? Can you put dollar figures on what you'd be willing to pay for those things? And if so, how do those compare to sensible alternatives? Could you go to a public field, park, or pool for a fraction of the cost? And if so, are you willing to pay the premium to have that land be part of your home? Until you answer these questions, you can't really make an informed decision on whether or not it's worth it to you to buy a house on a bigger plot.

Spoiler alert: homes are some of the biggest purchases people tend to make in their lives, so unless you're rolling in dough (which you may be, and if so, congratulations), chances are that the added cost just isn't going to be worth it to you. More land can cost as much as several lavish vacations depending on the places you use for comparison.
Value, to oneself is a very difficult concept to understand and evaluate. This is especially true when so many around us value things very poorly which is why bottle service at a club can be hundreds when the same bottle is worth $30 at a liquor store. This is why the average home has increased in size over the decades.

Having some space is very nice, but there is a concept of too much space, or poorly used space. Our home is a prime example. I estimate about 800 sqft of wasted space that we pay to maintain. Originally we were excited about the sqft of the home and the price, we poorly understood the value to us of this unused and useless space that now we must maintain until we move. Luckily the mortgage was a little over 1x wages for us, so the mistake is small, but it was a financial mistake and one of the largest we have made in our lives.

Another example of value I like to share is how we overestimate the worth of very small upgrades. Just look at the TVs that are for sale. You can buy a top of the line TV or a TV one notch under for $1k less. On paper the two TVs are very different. Side by side you may even notice a difference. But bring them home and put them in two different rooms and the differences are impossible to distinguish. I know this because I made this mistake several years ago buying two 65" TVs. One for the family room and one for the bedroom. That extra $1k bought me $0 in value as it made my TV watching experience no better.

Someone above ridiculed Warren Buffet because he doesn't live the lifestyle of frivolously spending money. On the contrary, Warren Buffet understands value and what spending brings him and his family happiness.

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Re: Success stories of NOT buying more/too much house

Post by GoldenFinch » Thu Sep 26, 2019 9:51 am

cherijoh wrote:
Sun Jan 25, 2015 8:35 pm
blevine wrote:When your kids move on to college etc, and it's just two of you,
there is your reward, no need to move when you retire (at least not to downsize).
And there are many more ways you save than just the cost of the larger house :

1) Lower utility bills (heat and electric)

2) Less furniture/carpeting/rooms to paint etc over the years.

3) Lower taxes

4) Lower estimates by contractors who size you up and quote what they think you can afford.

5) Lower cost of landscaping a small property

The real success is if you use all that savings for something productive.
Let me add one more to this list - your house will be more affordable when it comes time to sell and there will be more qualified buyers.

I have a 1-story house with just under 1400 sq. ft. -- it is the smallest floor plan in the neighborhood. A neighbor one block over with the same floor plan just sold her house in 5 days and got 99.5% of the list price. (This was 3% higher than the Zillow value, so it wasn't a fire sale by any means). Other larger houses in the neighborhood have languished on the market for over 60 days. (I'm not certain they were competitively priced, but I still think this illustrates my point about affordability). In 2008-09, the smaller homes in the neighborhood were the only ones that were moving.
I live in an older neighborhood where most houses were built between 1900 and 1930. There is mostly a mix of old mansions and 1500 square feet houses. I notice that on the rare occasions when a really small house goes on the market 900 to 1100 square feet, it sells in a day and usually to a baby boomer. I think there are a lot of people who would love a nice tiny house in a great neighborhood, but there just aren’t a lot of those houses, at least not where I live.

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Re: Success stories of NOT buying more/too much house

Post by mptfan » Thu Sep 26, 2019 1:06 pm

bligh wrote:
Thu Sep 26, 2019 9:33 am
I would wager that Buffet has given more to charity than most everyone on this forum will earn in our lifetimes, combined. Miser is a ridiculous word to use to describe him.
Warren Buffett has pledged to give the majority of his fortune to the Gates Foundation and other charities. The total value of his pledge is estimated to be around $37 billion dollars.

https://philanthropynewsdigest.org/news ... foundation

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