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Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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Cheego
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Post by Cheego »

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Rodc
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Re: Another Too-Much-House Thread....

Post by Rodc »

5000 sqrt ft is absolutely huge for two people.

Your carbon foot print is likely huge unless you have taken super great care in the design.

I once went to buy a pair of binoculars for hiking. I wanted a decent pair I could easily carry. In the store the salesperson showed me a good brand compact 8x24 binoculars but then said for $20 more I could upgrade to 8x30 (or something). That seemed pretty good.

He said you know, for $25 more you could upgrade to something more powerful, like these 10x30. Yep seemed nice.

This kept going until I was looking at some top of the line huge zoom monsters you almost wanted a tripod to use.

Somehow in going through this long process of add this or that little thing to make the pair a little nicer I went from reasonable to insane. It was wild. Fortunately I stopped and said STOP! I went back to the first pair and have happily used them hiking for 25 years.

You might have cold feet because you are realizing you have done something similar.

FWIW: the lot sounds amazing.

Best of luck.
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.
cast128
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Re: Another Too-Much-House Thread....

Post by cast128 »

The house sure does sound large but then again thats all relative as there are very wealthy people with quite extravagant houses. Of course, that does not make owning one right for you.

That is a lot of house for 2 people and I would be interested in hearing what members of this forum without children who are near retirement have to say. Many choose to downsize later in life, but as you mentioned you have potentially 20+ years to live in the house before you hit your upper 60's.

You own the land and plans so what can it hurt to sleep on it a little longer? Here is a thought, what if you got on airbnb and rented a very large 5000 sq ft house to give it a test run? That might potentially save you from spending on a house that you might realize is much too big once you are inside. This might be a good option if you are already starting to get cold feet? If you decide to go through with the house, I think that is not necessarily a bad thing as working so hard is meant to be enjoyed as you see fit. Good luck.
stoptothink
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Re: Another Too-Much-House Thread....

Post by stoptothink »

Same answer as the other thread. Absolutely you can afford it, but why?
Doohop65
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Re: Another Too-Much-House Thread....

Post by Doohop65 »

We own a 3800 sqft house and we also have a couple of children. I must say, there are days I wish it were a touch smaller.

Heat, electricity, maintenance, and lawn care all add up in both money and time. I would argue the time is a bigger issue. Unless you are going to pay someone to do those things it will put a huge strain on your time budget.

We enjoy our property a great deal but wouldn't want it to ge any bigger. In the grand scheme of things you will have to make a choice.

Make sure you run te numbers on time and money so the property doesn't become a weight around your neck.
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Watty
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Re: Another Too-Much-House Thread....

Post by Watty »

Cheego wrote:The new house will cost $1.2MM to build (which is $200K over our intended cost).
It is rare that a project like that does not go at least a little bit over budget.
Cheego wrote:our plan is to make this a 20-year place to live.
Unless you plan on retiring in the home then I would save the dream home for your retirement home.

I would look at building a much less expensive house on the land.

Cheego wrote:Our combined annual income is steady at $450K...

...we also worry about having to clean that much space. We currently need about 90 minutes each Saturday to clean our existing house .....
At some point it really isn't cost effective to do your own housework and yard-work unless you enjoy it since the time would be a lot better spending the extra couple of hours a week doing your day job or studying to keep your skills current and learn new skills.

You are far past that point.

Even if spending the extra time on your day jobs does not result in more take home pay it will help your career.
KlangFool
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Re: Another Too-Much-House Thread....

Post by KlangFool »

OP,

1) Your combined annual income is 450K.

2) You are in the mid-forties

3) Your total net worth excluding the house is 1.9 millions

4) Your existing house worth 550K.

5) If you buy/build the new house, your existing net worth excluding NEW house is 1.2 millions. You are "House Poor". Your asset excluding the house is 1.2 millions.

6) You earn a lot of money but save very little. Before buying the house, 2.4 millions total net worth with annual income of 450K at Mid-forties. That also mean you spend a lot of money every year even with a paid off house.

7) How long can your job last? What happened if one or both of you lost your jobs?

Do I understand your situation correctly?

KlangFool
LarryAllen
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Re: Another Too-Much-House Thread....

Post by LarryAllen »

It's just money. If it would make you happy then go for it. Personally, I'd rather have a home half that size and then a second home in Hawaii.
surfstar
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Re: Another Too-Much-House Thread....

Post by surfstar »

We'd be retired in a couple years and renting houses all over the world, with that kind of NW and income.

I'm assuming you both like your jobs, or you would have FIRE'd by now.

Its not the cost, but the size - that much house for two people is crazy. Do you enjoy time off? Buy/build something smaller and pay a housekeeper, landscaper, etc. If you enjoy house-work, or feel the need to 'entertain' guests, go for the big one.

Saving $100k on $450k yearly sounds like you have some other expensive habits and prefer to indulge and work vs FIRE (Financially Independent, Retired Early).

If your house is a large priority in your lifestyle, you can afford it and should do so. If that is what will make you happy, go for it. If you're not sure, maybe you should look at the big picture and see what things you might enjoy more and focus on those goals. As I said earlier, we'd be traveling the world instead of living in a $1.5M house.
New Zealand by campervan is a great way to see just how small/minimal your 'housing' can be :D
delamer
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Re: Another Too-Much-House Thread....

Post by delamer »

Since you mentioned that you have an existing home, the way that you use the space in it should shape the floorplan (and size) of your new home.

When our kids aren't home from college, my husband and I spend our waking hours in the open area that includes are kitchen and family room. We spend our sleeping hours in our bedroom. Other than the bathrooms and the laundry area, no other space in the house gets much use. (My husband occasionally uses the dining room table as his home office when he takes his laptop in there.).

Our entire house, excluding the basement, is 2100 square feet.

A friend of mine's parents had a custom house built when they retired. They were able to live comfortably in the first floor and the second floor was only used when they had overnight company. If you feel the need to build a bigger house for resale purposes, a floor or wing that can be closed off when not in use is a great idea.
adamthesmythe
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Re: Another Too-Much-House Thread....

Post by adamthesmythe »

1. It's gonna cost more than 1.2M. Not sure why or how, but expect overruns.

2. Your projected taxes are very reasonable for a house with that value.

3. You really don't have much in retirement savings given your income. You need a plan to put enough away to CONTINUE being able to afford this house in retirement.
United2008
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Re: Another Too-Much-House Thread....

Post by United2008 »

One minor point - you may lose at least a portion of the tax benefit from the property taxes due to AMT.
psteinx
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Re: Another Too-Much-House Thread....

Post by psteinx »

What rooms do you need so badly that you need 5000, or even 4400 square feet of space for 2 people?

2 people can only sit in 2 chairs, or perhaps one love seat or sofa, at a time.

I assume you sleep in the same bed. Even a king-sized bed isn't that big.

Big kitchens give room for food prep and kitchen gadgets, which are nice. But then, whoever cooks is presumably only doing so for 2, most of the time. Do you need a kitchen the size of a restaurant's?

And if you spend 180 minutes, combined, weekly, cleaning a 3000 square foot house, and presuming it's mostly only the two of you (not a lot of pets or visitors) dirtying it up in the first place, then, IMO, you're a bit of an over-cleaner already, and 5000 square feet will either have you spending (wasting?) significantly more time than you already do, or perhaps feeling guilty about your uncleaned house. ("We haven't scrubbed the toilet in the 5th bathroom in 3 weeks!")

Picture yourself with this house, 5 years from now, after the novelty has worn off. What aspects of it make you happier than where you live now?
Last edited by psteinx on Mon Jul 18, 2016 6:25 pm, edited 1 time in total.
BanditKing
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Re: Another Too-Much-House Thread....

Post by BanditKing »

We are in the early stages of planning a custom home, with plans to build in approximately 4 or 5 years. We hope to start looking for the plot of land in about two once we determine where in the area we want to live (I work from home and am flexible, but will want to be convenient to my wife's work when she's done with school at the end of 2017). We are also only two people without children. Basically, sounds like we are roughly where you were a few years ago.

We made a list of what we really wanted in a house before we even dove very deeply into a plan. We quickly knew we needed 5 basic rooms (Master BR, Guest BR, His Office, Her Office/Music Room, and an exercise room). At least one, if not three of them don't even need to be legit bedrooms or need windows (although I'd argue all day long for an office window, dammit). We knew we need a big and functional kitchen (I cook, she bakes). We are both movie people, so an area in the basement for a home theater. I need a 3 stall garage. She needs a bathtub while I want a zero-lip shower. I want the house to be wheelchair accessible, or easily converted to that (wide hallways, the aforementioned shower for example). After that, things quickly become "nice to have" as opposed to must have. "Nice to have" and lower means its on the chopping block.

Before long, we were narrowed down to much more manageable 3-BR homes, open concept, single story, in the 2000-2400 sqft range. The nice thing about single story is that you have a bigger footprint, which gives you more basement space which is much cheaper to build out. Suddenly some of those rooms move downstairs. Above the garage? A very inexpensive bonus room, especially if you don't plumb it (and easily convertible to a rentable suite with a little work and/or planning).

Anyways, where I'm going with this rambling is that 5000 sqft seems HUUUUUUGE for 2 people. You will definitely feel like Charles Foster Kane wandering through Xanadu alone in a house of that size. That price ($240/sqft), especially if you aren't doing any crazy upgrades, also seems out of line but you don't say where you live so that may be par. I think you really need to ask yourselves why you need all that space, and what you can do to perhaps reduce costs on some of it (again, finished basements are comparatively cheap, for example, and with a walkout basement available, you can move a lot of space down there). I can't imagine you couldn't easily shave 1500 sqft off of your plan, move some to the basement, and still have a phenomenal custom home.

PM if any of this resonates and you'd like to chat one-on-one.
Saving$
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Re: Another Too-Much-House Thread....

Post by Saving$ »

That is too large for 2 people, for all the reasons given above.

Suggest that you figure out a way to build a much smaller home on the site in sort of a Phase I and Phase II approach. Phase I might be a 2000 sf home that you can be happy with, but with the plans completed for how to expand it. Might even be a Phase II a & b - where you have a plan do two separate expansions. Also look at how much space you really use - you probably live in about 1200 sf. Can you design it to close off the rest of it so you don't have to heat and cool it?

Another approach is to design the spaces you need to live in and have a guest or two all on the main level - sounds like you have plenty of land to spread out. The expansion space is the second level, but you don't need to finish that. Then you don't need to pay to build out, heat, cool, clean or have taxes on the portion that is not built out, but the space is easy to finish out if needed for resale. And at resale you can put the then current finishes in it.

PS - If the $1.2 is construction costs only, you need to revisit that. $240/sf is high for what you describe as a house without extravagant features. How much of the $1.2 million is sitework (grading, tree removal, driveway, retaining walls, etc), and how much is actual house construction? A 5000 sf house should have lower than average construction costs, due to economies of scale, not higher than average.
reneeh63
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Re: Another Too-Much-House Thread....

Post by reneeh63 »

That's a huge house - unless you're doing it for resale then re-think....except you're kind of boxed in wanting to capitalize on the views? Also, you can figure going at LEAST 10% over budget, and that's being careful...inflation...things you didn't think of...etc.
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obgyn65
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Re: Another Too-Much-House Thread....

Post by obgyn65 »

I would never buy that type of house. I'm happy in a 700 sq foot condo in a sky scraper.
"The two most important days in someone's life are the day that they are born and the day they discover why." -John Maxwell
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Artsdoctor
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Re: Another Too-Much-House Thread....

Post by Artsdoctor »

Cheego,

A few thoughts.

You have a nice salary, and I would have expected a little more in savings. However, I'm not sure what you mean by $900K in liquid assets (is this part of your retirement portfolio as well? hopefully not in a money market?). If your retirement portfolio is $1.9M split between tax-deferred and taxable, that's looking a lot better.

5,000 sq ft is a big house by any standard. If you're going to have a lot of guests endlessly and you want to build with the idea of having parents or in-laws move in at some point, it could make a lot of sense.

I am impressed that you're doing your own house cleaning in a 3,500 sq ft house in such a way to do it thoroughly in just 90 minutes. I would venture a guess that the vast majority of people with 5,000 sq ft will have someone else cleaning it.

I don't know what state you're in so can't really guess whether or not you're in the AMT. The chances are good that you are, but take a look at your previous tax returns. If you're paying AMT, none of your real estate tax will be deductible.

I wouldn't worry that much about resale at this point because so much can change. Presumably, you're going to be in your house for a long time.
letsgobobby
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Post by letsgobobby »

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SRenaeP
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Re: Another Too-Much-House Thread....

Post by SRenaeP »

Cheego wrote: Is a 5,000 square foot house too big for two people? We designed this house with certain room sizes and certain views in mind. This caused the design to have to include two other rooms which we don't need (except for resale) which threw us over the 4,400 square foot house size that we had hoped for. We don't want to feel like to two rocks bouncing around inside a tin can and we also worry about having to clean that much space. We currently need about 90 minutes each Saturday to clean our existing house which is 3,000 square foot. That is 90 minutes for both of us cleaning together.
Absolutely too big! I say this as DINKs living in 4100 sq ft. There are several rooms that rarely get used. While it is nice to have multiple guest rooms, it would be cheaper and easier to put people up in a hotel the few times a year we're at 'full capacity.'

While our utility bills aren't that much, it is a drag having to clean/maintain that much space inside and out. DH and I have been looking to downsize to a 'luxury' townhome but unfortunately, can't sell our house for what we want right now.

Do you currently/regularly use all 3000 sq ft you have now?

-Steph

-Steph
PowDay
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Re: Another Too-Much-House Thread....

Post by PowDay »

I'm amazed that a couple making almost a half million a year doesn't spend $200 a month on a cleaning service.
Lafder
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Re: Another Too-Much-House Thread....

Post by Lafder »

Regarding this "The house will not have any extravagant or super high-end features that are causing the constructions costs to be so high"

I would seriously consider less square footages and getting the finishes you love.

5000 sf is huge for 2 people, even for 6 people to live in. It ends up being a lot of walking to get from one most often used room to another.

I live in 4000sf with 2 big teens and 3 big dogs and a spouse, and it feels too big. I thought I wanted big. Next time I want smaller with a layout that works for how we live. Our huge living room ends up being a rarely used big hallway since it's only use 99% of the time is that it is the path to the kids bedrooms. But square footage wise, and with high ceilings, I suspect this least used room costs as much to heat and cool as the rest of the house.

I admit I am spoiled and enjoy that the 4 of us can be home in our own areas and not even hear each other.

I would be careful about being the most expensive house in the neighborhood, even though I am in the same. :) If you live there for years, who cares.

I agree it will cost much more to build than predicted. And the final "cost of the house" is going to include the land, furnishings, yard landscaping, moving costs, making your expenses much higher than the construction cost.

I appreciate rooms that can be used for your specific wishes, but used as bedrooms for future owners.

Consider selling your current home and living in an apartment while under construction. That is a great way to make a smaller size home feel bigger since it will be bigger than what you have adjusted to living in while in the apartment!

Layout matters more than square footage.

Search McMansion (large but relatively low quality) and Not so big house, here is a link. http://www.notsobighouse.com/author.asp She basically describes how people are drawn to smaller cozier parts of houses and how to achieve a feeling of home with quality details and planned well thought out areas, rather than more square footage.

I am sitting in a bedroom we use as a tv room rather than my huge living room :) so I do what she predicts people will do in her writings.

lafder
Last edited by Lafder on Tue Jul 19, 2016 10:55 pm, edited 1 time in total.
furnace
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Re: Another Too-Much-House Thread....

Post by furnace »

Cheego wrote:Long time lurker but this is my first post!

My wife and I are considering the option to build a custom house. We've been working on this for nearly 2 years... one year to find land (which we now own) and one year to get a great design completed with the help of an architect. Now that we have the construction costs in front of us, we are getting cold feet even though we absolutely love the house design.

The new house will cost $1.2MM to build (which is $200K over our intended cost). The land was $300K and we paid cash for it. The house will be built on a 20 acre (mostly wooded) lot within a community of 10 homes which range in value from $850K to $1MM so we will be the most expensive house in the community. I know that is not a good thing but unlike the other lots, our lot sits on a hill that overlooks a rolling 120 acre farm that is in permanent county preservation. The view is outstanding and we are counting on that part helping us maintain a significant part of the home value if we had to resell any time soon. otherwise, our plan is to make this a 20-year place to live.

The house will not have any extravagant or super high-end features that are causing the constructions costs to be so high. For what it's worth, we have also been looking at the pre-owned houses on the market over the last 3 years and have not found anything close to what we dream of owning.

About us...
We are in our mid forties and have no debt. We are child-less. Our combined annual income is steady at $450K... all of which is salary (no investment dividends there). Just over $100K of that is going each year into a tax deferred IRA. Our combined retirement assets are just over $1MM and we have $900K in liquid assets. Our existing home has no mortgage and is worth $550K. We can basically afford the new house without a mortgage.

Our concerns are many but here are a few.


Is a 5,000 square foot house too big for two people? We designed this house with certain room sizes and certain views in mind. This caused the design to have to include two other rooms which we don't need (except for resale) which threw us over the 4,400 square foot house size that we had hoped for. We don't want to feel like to two rocks bouncing around inside a tin can and we also worry about having to clean that much space. We currently need about 90 minutes each Saturday to clean our existing house which is 3,000 square foot. That is 90 minutes for both of us cleaning together.

Despite our excellent view, should we assume we'll take a huge loss at resale simply because we will be the most expensive house in the community?

Another concern is the property tax bill which we estimate at $12,750 per year. Yikes! But our accountant reminded us that property taxes are tax deductible which therefore nets something closer to $8,200. We are not sure we want to hand over that kind of money to the government.

I think you should build your custom home, but not for 5000 square feet. You can have a beautiful home at 3000 sqf, which at $200/sqf would save you $400k.

What are you doing with the 20 acres? Some people grow timber and you can earn quite a bit from it. Do you plan to keep horses? A large tract of land, if it's remotely close to a metro area, is valuable. You can even subdivide your lot and sell individual parcels.
edge
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Re: Another Too-Much-House Thread....

Post by edge »

United2008 wrote:One minor point - you may lose at least a portion of the tax benefit from the property taxes due to AMT.
They may be in a weird situation and have very few deductions so AMT not triggered.
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Toons
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Re: Another Too-Much-House Thread....

Post by Toons »

"Is a 5,000 square foot house too big for two people"

Food For Thought.
Five years ago we retired,
looking to the future,
we downsized to 1500 sq ft.
As time passes,
the decision to do so gets better and better.
Less Is More.
We could have paid cash for 5000+sq foot home,
For what ?
To hear the echo?
And Maintain?
:mrgreen: :mrgreen:
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
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just frank
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Re: Another Too-Much-House Thread....

Post by just frank »

If the $12k property tax bothers you, how do you feel about the $12k/year annual maintenance (1% rule)? It might be a little lower with a 'new' house, but not for long. Also, a lot of new houses have defects that take a few years to appear and then require repairs.

Have you estimated utility bills for heating and cooling?

Have you estimated the annual expenses for a tree service to keep the grounds safe and attractive? My much smaller treed lot costs me $1k/year.

I would also assume that you would be contracting a house cleaning service and perhaps some landscapers.

If you have budgeted all the above and said 'meh' than you're all good and ready to enjoy! :beer
absolutFinance
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Re: Another Too-Much-House Thread....

Post by absolutFinance »

my wife and i lived in a 3300 sqft home by ourselves for a number of years. it was too big for just the two of us, but perfect as we started bringing kids into our lives. while we were DINKS though, it was a source of friction in our relationship - cleaning, maintenance, costs, etc.

this is coming from an only child who grew up in a 2500 sqft home and is used to having space around me...

would highly recommend a smaller house with a killer design and amazing interior instead. a house design should be a function of your living needs. it's hard to see how a couple's needs could require 5k sqft unless there are some unusual living requirements.

we're now a family of 4 and will end up with ~3700 sqft in a very efficiently designed home after our remodel is complete. even now at 3100 sqft, the house feels ample.
PandaBear
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Re: Another Too-Much-House Thread....

Post by PandaBear »

I think a house that size is far too large for two people. Are you expecting children any time soon?

From personal experience I life in a house roughly 2/3 that size with my wife and most days I think that is a bit too large. The cleaning and housework gets to me every now and then. But as they say, "Your mileage may vary."
alaskantraveler
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Re: Another Too-Much-House Thread....

Post by alaskantraveler »

I am younger, 31, so my advice is what it is. I do have some additional experience observing various family members and their home purchases. First my wife and I bought a 2300 sq foot house a little over a year ago. We found that we could be just as happy in a much smaller home. We bought the home as it was the best we could find in our price range and home requirements. We even like to host dinners/parties frequently (average about twice/month). For us the most important factors were:

proximity to our jobs. We are both about 2.2 miles from our jobs (I frequently bike to work)
affordability - we wanted a house payment we could afford easily
value - we wanted a good deal so that if we need to sell or rent it out we could do so without taking a loss
garage - we have many outdoor hobbies and a garage for storing bikes, kayaks, fishing gear, tools, etc... was very important.

People really need to identify what makes them happy/satisfied in life. I think that the majority of people don't understand what makes them happy, and do not prioritize utility maximizing decisions.

Does living in a $1.2 million house bring you more utility than being able to retire 5-10 years earlier in comparison to living in a $600k house?
Why do you want to have such a grand house? Is it to show off to your friends, coworkers, family? The size and cost does not seem practical.
Once the initial positive utility of living in a new amazing house wears off in 6 months to a year, how much utility will you gain.

I have found that financial security brings about some of the greatest utility.

I hear many of my friends say its nice to have a guest bathroom. (This from the perspective of younger childless couple). Then I ask how many nights per year do you have house guests. For us we estimate we have house guests about 20 nights/year. An extra bathroom in my area costs about $20k. So $20k divided by 20 nights/yr x 5 years = $200/night. So my friend will pay $200 per night so he doesn't have to share a bathroom with his house guests. I guess that is worth it for some people. I'd rather retire when I am 50, and share the bathroom.
detroitbabu
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Re: Another Too-Much-House Thread....

Post by detroitbabu »

If the house size is increasing because of additional rooms you are building for the view, can you build a deck/patio which will be much cheaper?
Katietsu
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Re: Another Too-Much-House Thread....

Post by Katietsu »

I would have a concern not yet expressed here. I live in an area where quite a few custom larger houses have been built in the last 20 years. The original homeowners are always so proud. But there often is something that just doesn't translate well to the general public. You can tell that the home was captained by an amateur. The homes usually then take a long time to sell or sell at a lower price than the original owner expects. Regardless of what size home you build, I would make sure that the architects/builders/designers all feel comfortable letting you know that your design feature that works so well for you is going to hurt your resell.
edge
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Re: Another Too-Much-House Thread....

Post by edge »

I bought a large custom house, exceptionally well built and not overwhelming (no massive 2 story great room, no massive 2 story foyer). Nothing weird about the floor plan, very straightforward and thoughtful.

I actually have friends that have houses with both a massive two story family room and also a double two story foyer (initial foyer and then secondary foyer with a circular hole that the second floor hallway wraps around. The homes like this feel like a hotel.

It is a pain but I like the space and having guests/family over. When the kids are gone and such I will sell it to someone else. It won't make sense then. I could easily afford the home.
Flashes1
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Re: Another Too-Much-House Thread....

Post by Flashes1 »

I say go for it. You are wealthy. We built a bigger house than you're proposing, and love it. No reason to make a lot of money if you're not going to spend some of it. We wanted to look above the boring typical middle class housing stock.
mw1739
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Re: Another Too-Much-House Thread....

Post by mw1739 »

My house is 6200 square feet for 2 adults, 2 children and 2 dogs. We fell in love with the house and location, but we could easily live in a 4000 square foot house. In the (rare) times when our kids aren't home, my wife and I have to search high and low at times to find each other. My only gripe is that it costs a lot to heat and cool that much square footage. We have 2 HVAC systems and could realistically use a third. I love having a large house and being able to entertain our friends and family. With that said, your cost of $240/sq ft doesn't seem unreasonable and you can certainly afford it. If we ever move, I foresee our next house being 4000-ish square feet and on 5-20 acres.
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Cheego
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Re: Another Too-Much-House Thread....

Post by Cheego »

Message removed.
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Rodc
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Re: Another Too-Much-House Thread....

Post by Rodc »

Cheego wrote:Thanks for all of the replies even though I kind of feel like the dream has been squashed here.

So we're probably going to cancel the project at this point. I know we can sell the land for more than we paid.
What led to that decision?

If you have decided the house is too big, why not a smaller house?
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.
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Cheego
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Re: Another Too-Much-House Thread....

Post by Cheego »

Message removed.
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fcox85
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Re: Another Too-Much-House Thread....

Post by fcox85 »

Cheego wrote: It may seem that we save very little but that is not the case. My wife and I own a business. For the first 5 years, it didn't make a whole lot of money but several years ago, it took off. Sales increased by 20 to 35% each year for 5 years and have not changed since then. We are basically "new" to earning this kind of money. Once that happened, we put most of our income back into the business for expanded inventory now worth $1.5MM in inventory alone. After that, we paid off our mortgage and then we paid off my parent's mortgage (slowly). We'd have more available funds if we had not bought the land ($300k last year) and I recently bought a new truck for work. Prior to owning the business, we had jobs that paid very poorly. I kind of feel like we are definitely savers.
Let me start by saying that I am NOWHERE NEAR your situation in terms of net worth, earnings, etc. However, based upon the bold quote above, I think I would at least wait a little while on a project like this. Maybe I am risk averse by nature, but it seems to me that a business that "blew up" over a five-year period could just as easily backslide. I would "settle in" to your newfound income and savings patterns before I spent that much on a house.
edge
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Re: Another Too-Much-House Thread....

Post by edge »

Is it 5000 sq ft above grade? I have 5300 with a 1300 sq ft finished basement for 6600 total. If I had only two people in then it would seem too much. It is probably too big as is but we wanted plenty of room for the au pair and grandparents. There also wasn't anything else in the market that we loved at the time.

For two people aim smaller. Like 4000 above grade. It will feel really spacious.
Cheego wrote:We've yet to comes across anyone that has anything positive to say about the house size. We must have rose colored goggles on.
Probably should have noted this previously but the community requires a minimum 4,000 sqr ft house.
Last edited by edge on Tue Jul 19, 2016 5:40 pm, edited 1 time in total.
searhapsody
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Re: Another Too-Much-House Thread....

Post by searhapsody »

Cheego wrote:
So we're probably going to cancel the project at this point. I know we can sell the land for more than we paid.
If you love the land and want to capitalize on the views, I wouldn't cancel it perhaps you just need to work with a different architect. A good architect would be well worth the cost. The issue I find with many builder designed homes is people just say ideas of what they want and the builders tend to tack on another room or space to accommodate so that the space grows larger and less functional. (Perhaps because they get paid more, the more space you build) A good architect would take your ideas and build it into a functional but also liveable space. You've talked about the scale of those additional rooms but they aren't particularly huge, all that square footage is somewhere so how many beds/baths are we talking? What is the scale of the main living space?

Now I have a preference for small (but definitely not tiny homes) with plenty of storage. So my husband and I have lived in 850-1300 sq feet condos and then houses. We are DINKS so could afford more but preference location over space. Right now that equates to a 3 bedroom/2 bath house with a separate living area and dining room. For just the two of us, we would never need much more square footage as long as a smaller space was well-designed. Our current house's floor plan has no wasted hall space, a fairly large bathroom with a ADA shower, etc. So it's just hard for me to imagine what you are fitting in yours. If it was ours instead of renting, we might reconfigure the closet space, but that's it. Personally, I would be creeped out by so much empty space and rooms that I only entered rarely to clean. I would always feel like someone else could be living in my house and I wouldn't even know it.

I agree with whomever above said that look at how much space you actually live in and what you actually do in the space. (For instance we rarely use our dining room and could easily do without a separate dining space, but you may have formal dinners nightly) A good architect should do that with you too. The best architects I've seen are like life planners. They would really walk through your day from the moment you wake to when you retire and also go through your week, then help you plan a space that would accommodate those needs. That's what I think of when I think of custom home and one day we may go that route, but it's not about the square footage but a design that would make our day to day easier and more efficient.

Also look at ways to combine those spaces and functions so that you don't have rarely used spaces. Like could the office be combined with crafting or crafting with exercise? It's not likely you are doing both at the same time and with great organization/storage, the space could be dual purpose.
searhapsody
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Re: Another Too-Much-House Thread....

Post by searhapsody »

Cheego wrote:We've yet to comes across anyone that has anything positive to say about the house size. We must have rose colored goggles on.
Probably should have noted this previously but the community requires a minimum 4,000 sqr ft house.
Where is this? I've never heard of such a large minimum, but I do hear that everything is bigger in Texas.
harrychan
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Re: Another Too-Much-House Thread....

Post by harrychan »

Math isn't adding up here and you may want to check a few builders in your area. The cost of building a home valued at $1.2 mil should not cost $1.2 mil to build. At the numbers you provided, it is costing you $240/sq feet. Is the running rate of the similar sized homes being sold in your neighborhood at $240/sq feet? I would think avg. running rate should be $120-140 / sq feet. When my FIL rebuilt his fixer upper from ground up, it cost him roughly $80 / sq feet but a lot of work was done themselves including procuring the materials.
This is not legal or certified financial advice but you know that already.
edge
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Re: Another Too-Much-House Thread....

Post by edge »

searhapsody wrote:
Cheego wrote:We've yet to comes across anyone that has anything positive to say about the house size. We must have rose colored goggles on.
Probably should have noted this previously but the community requires a minimum 4,000 sqr ft house.
Where is this? I've never heard of such a large minimum, but I do hear that everything is bigger in Texas.
In my new neighborhood in NY minimum is 4200 above grade. I think the builder wanted to keep it uniform-ish.
edge
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Re: Another Too-Much-House Thread....

Post by edge »

240 isn't bad for a nice medium range custom. I've seen 400+. Those were a bit over the top and ornate. I imagine hard to sell anywhere near build cost.
harrychan wrote:Math isn't adding up here and you may want to check a few builders in your area. The cost of building a home valued at $1.2 mil should not cost $1.2 mil to build. At the numbers you provided, it is costing you $240/sq feet. Is the running rate of the similar sized homes being sold in your neighborhood at $240/sq feet? I would think avg. running rate should be $120-140 / sq feet. When my FIL rebuilt his fixer upper from ground up, it cost him roughly $80 / sq feet but a lot of work was done themselves including procuring the materials.
a2_alice
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Re: Another Too-Much-House Thread....

Post by a2_alice »

My in-laws bought a 5000 sqft house in their early 50s. They're the second owners but it's a lovely custom built house with a view so I can see some similarities. If you ask them, they love their house and couldn't live without all that space. And they can afford it so there you go. However from an outside perspective they're wasting a ton of room and energy on heating/cooling. And I'm not talking about things like my mother in law's craft room, which she really does use a lot. I'm talking about the 3 bedrooms and bathrooms only guests use, the exercise room (could easily have used a spare bedroom for that stuff), formal entryway and living room, and the third car bay in their garage (I guess that's not in the sqft, but still). No matter how much you plan to use it all, you're only two people and you can't.

They've also lived there for about 10 years and not completely finished furnishing the house because it's such a huge project. For example, they have a walkout basement with a living room, bedroom, and bathroom where we stay when we visit. It's nice to have a whole floor to ourselves, but it's the last part of the house to be finished. The living room is used to store their patio furniture in the winter. In summer it's empty. It's pretty strange to see a patio furniture set in a million dollar house living room...

Also, it takes a husband/wife team who clean professionally 5 hours to do their house.
ChrisC
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Re: Another Too-Much-House Thread....

Post by ChrisC »

Cheego wrote:We've yet to comes across anyone that has anything positive to say about the house size. We must have rose colored goggles on.
Probably should have noted this previously but the community requires a minimum 4,000 sqr ft house.


We're a retired couple that live in a 5445 sqf house that was custom built personally by the prior owner who sold it to us in 2013, and who rented back to us for 12 months. We love our home which will likely be our permanent dwelling. And like you, we do most of our own house cleaning though we hire someone to clean a few occasions a year. We have someone do landscaping and lawn mowing services, though I trim bushes once in a while and laid down 10 yards of mulch last year. I have the time to do lots of work around the house, but for the most part, I use handyman services to do lots of things. I'll paint an occasional room, but for the most part, home maintenance is consigned to paid laborers. We have 5 bedrooms each with its own bathroom, 2 master bedrooms on the first floor and 3 bedrooms on the second floor. We do most of our basic living on the first floor. We did buy this house with the idea that my MIL, now 97, would move into the 2nd Master Bedroom; she keeps postponing the move and it now appears that she has other plans. My brother-in-law has MS and we are entertaining the idea of him living with us for an extended period until we find suitable assisted living facilities for him

We have 3 adult children, 3 grandchildren, and lots of other family and friends that visit us and stay in our house. We'll have my oldest daughter and her family stay with us from California for several weeks in late October of this year as they relocate to our neck of the woods. All our immediate family members will likely be here this Xmas too.

I envy your opportunity to frame your custom home. I would suggest you design with aging-in-place, if you plan to retire and stay there a long time. We have an elevator that can take us up to the second floor, and our house was designed by the original owner to accommodate a disabled child.

My experience has been very positive so far in this large house that most here would seem to think is too big for two people. I've lived in almost every conceivable residential dwelling during my lifetime. And my last three dwellings were: a 1800 sqf townhouse in the DC suburbs(10 years); 4000 sqf home on 3 wooded acres in rural Virginia (20 years), and lastly a 1330 sfq condo in Arlington, VA, 3 miles from DC off the Metro (8 years). But I must say 20 acres is lots of land, which I presume is 95 percent maintenance free and $240 per sfq to build seems a bit high to me: I calculate around my area that the cost of a custom build home would be around $146 per sqf. Then again, all real estate and construction costs, might be local.
Easy Rhino
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Re: Another Too-Much-House Thread....

Post by Easy Rhino »

well, you already live in a 3000 sq ft house.

I think you're the best judge on if a 40% larger house would be overkill or not!
CWhea1775
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Re: Another Too-Much-House Thread....

Post by CWhea1775 »

If you have decided to cancel based on a web conversation (even with Bogleheads!) maybe that is the right decision for you. However, I notice in your posts that you have said very little about why you want to move out of your existing house. Examining whatever your dissatisfactions are with that space might help you analyze whether you are on track for really getting what you want or if you have been upsold. Most importantly, it might help you understand whether you will be satisfied cancelling the project and starting over or staying put in your current house.

One other thing you might want to think about; are you building a home to get old in, or will you want to live in the house for a while and then sell when you get older? If your plan is to age in place and your new house is perfect for that, great, but if you are going to have to sell as you age because of location, house size, maintenance, etc., then the resale value (cost/square foot, most expensive house in the neighborhood, etc.)becomes much more important. You are probably too young to thing about that, but age will sneak up on you. Good luck!
BanditKing
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Re: Another Too-Much-House Thread....

Post by BanditKing »

As another reference, when we did the local Parade of Homes last month, two different builders gave us the exact same numbers; telling us to estimate $155/sqft for the main floor, $125/sqft for the second and third floor, and $35-40/sqft for basements and the bonus room above the garage. This is for "Parade Quality" too, so a little higher end on the upgrades and decor (quartz countertops, GE Profile or Cafe' appliances, triple pane windows, etc). This does not include the lot, and any costs for utilities that be related to location.

We were told "You can cheap out and knock 15 percent off the estimate if you wanted to and the HOA would allow for it".

This is in Madison, WI where we need pretty solid insulation, heating and cooling, and weather conscious construction.

Our hope is to do a 2200ish main floor, another 1600 below grade, and the bonus room (about 800 over a 3 stall garage) for about $425k before the lot. That gives us ~4600 finished square feet which is wayyyyy big, but with so much below grade it's very cost conscious. We might outfit the bonus room with an exterior entrance, kitchenette and bath so we could rent it as a studio apartment, too.
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Artsdoctor
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Re: Another Too-Much-House Thread....

Post by Artsdoctor »

Cheego wrote:We've yet to comes across anyone that has anything positive to say about the house size. We must have rose colored goggles on.
Probably should have noted this previously but the community requires a minimum 4,000 sqr ft house.
Cheego wrote:We've yet to comes across anyone that has anything positive to say about the house size. We must have rose colored goggles on.
Probably should have noted this previously but the community requires a minimum 4,000 sqr ft house.
You really did come here asking very specific questions about the suitability of a 5,000 sq ft house for two, so I wouldn't be too disappointed that people actually answered your question directly. However, the only people that really matter in this situation are you two. You may very well enjoy living in a large house so you could simply take the opinions here under advisement and go in with eyes wide open.

I'm sure you've already done it, but make sure you go through some open houses of homes of this size. However, don't go through the house for the fixtures or niceties, but with the sole purpose of imaging upkeep. Forget about the fluff that people usually focus on during those open houses and go for the mechanicals and the infrastructure of the house. Try to see it from a maintenance perspective.

It's going to be expensive to furnish it and maintain it. But if you really enjoy doing those things, you might just like it.

One last thing, only because I'm in a different stage of my life than you are: you're going to accumulate an awful of "stuff" if you're going to furnish the whole house. There will probably come a time, perhaps many years from now, that you're going to want to downsize (can't say for sure, but probably). It will be a tremendous amount of work to rid of all that stuff that has accumulated into a 5,000 sq ft house over many years. Although some people will continue to accumulate "stuff" throughout their lifetimes, most will start wanting to pare back a bit.
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