When it comes to eventually moving into that dream home you've always wanted, keep in mind that many of the choices we make on a house are really driven by lifestyle desires, rather than lifestyle needs.
More bedrooms means more time to clean, more expensive to repaint and carpet/floor in the future. The bigger the house and the larger the lot, the more you're going to pay for it both in time and financial resources. The main three decision factors are larger lot, more space and more stuff. Each of these come with a price tag.
Depending on the acreage, this is going to cost the owner in regards to acquisition, monthly payment, and upkeep. First is the acquisition. Larger lot means larger price, thus larger down payment and monthly payment. In metropolitan areas, the closer in to the epicenter of town, the more the extra space is going to cost you. If you decide to get it cheaper by moving out of town, then you'll be paying more for gas and be losing the ever elusive minutes of your life.
A friend of mine is dying for a couple of acres. He's moving into the area from a community where houses with 2 acres are common and they are within minutes of the job centers. No problem. In this market, however, it means possibly driving 30 miles or more for what he's looking for. It also means a longer commute -- upwards to 90 minutes -- in morning and evening rush hour. If that's 30 minutes longer per day than what he does now, that's 2.5 hours per week longer on the road -- folks that's 125 hours per year just on the road to work and back per year -- MORE -- than living closer in. (That's three weeks worth of working hours.)
The larger lot also means more upkeep. If you have teenagers, maybe it's not your problem, you think with a wry grin. Nevertheless, the larger lot that is cleared off and landscaped will take longer to mow, require more gas and possibly even more equipment. In addition, there's the landscaping (mulch, et. al.) that you may not have needed to fret about before.
(In my household, come mulch time, forget bags -- we order it by the truckload now. We didn't even get a larger lot; just decided to "add" a few flower beds -- now each spring costs more for mulch.)
Even in a wooded lot, you'll now have to start watching the trees that border your house. A neighbor told me before he was moving that he was spending about $500 per year taking down trees that were threatening his house. Once he did move, the new owners had a tree fall on their home within a few weeks, causing damage to the roof and patio.
For most move up buyers, this is the No. 1 reason they are shopping for a home. The 3-bedroom townhouse isn't cutting it for the growing family and it's time for a yard. Let's get the 4th bedroom, or 4th bedroom with a "bonus" room in the basement.
More space creates more expenses for paint, accessories, flooring, etc., every time the room is repainted, remodeled, etc. It's no rocket science calculation to see that the 1,800 square foot home is going to be cheaper to care for than the 2,800 square foot home. Remember, percentage wise, we're talking 55 percent more home – which will interpret into 55 percent more flooring cost, 55 percent more paint, 55 percent more utilities, etc. When purchasing, don't forget to ask the owner for a rundown of monthly or annual expenses for upkeep of the property. (Most likely, it will be an estimate, but a good indicator of your true costs of the property.)
Don't forget that once you get a larger place, it usually is compounded with a decision to replace older furnishings or purchase new furnishings to put into your new areas. Movecentral.com's latest home moving survey revealed that:
- 57 percent of owners and 37 percent of renters bought furniture within the 12 weeks surrounding their move; owners spent an average of $3,500 and renters spent $1,220.
- 55 percent of moving homeowners purchase at least one appliance when they move, and 57 percent of homeowners buy furniture.
- 35 percent of owners and 40 percent of renters bought bedding; of these individuals, 72 percent did so within three after their move. Owners spent an average of $420 and renters $240.
As you're contemplating your next move, be sure to add in to all your calculations the new costs of living in your new castle.