One House, Two House, Red House, Blue House

One House, Two House, Red House, Blue House

I LOVE houses!  There’s a very strong emotional reason for this that is explained here in my very first post.  When I met Mr. Money Monster two years ago, we lived two hours apart *GASP*.  It wasn’t ideal; however, Mr. Money Monster didn’t have any children and he worked from home.  Because of this ideal situation, I knew dating him was an actual possibility because…he was mobile!  Lucky for me, things worked out and he made the move!  After he moved in, our 1300 SF, one story home seemed to shrink.  Mini Monster and I were living quite happily in our home with our dog and two cats.  But, when Mr. Money Monster moved in, he had his big dog in tow.  That makes two adults, two big dogs, and two cats on one floor.  Needless to say, we are a little cramped…and that won’t get any better if we decide to expand our family to include a second Mini Monster in the not-too-distant future.

Let’s Explore Our Living Options

Okay, since I grew up in a very tiny, and embarrassing (my perception when I was a child) living situation, I have always been fascinated with the standard four bedroom suburban home on a nice lot with mature trees.  Yep, that’s what I’ve always pictured as PERFECT.  These days, my artistic side has put a spin on my perfect, imaginary home.  It’s the same four bedroom sprawling house, but with a unique style, inside and out.  Kinda like the one I have in the feature picture.  Can I get a woot woot for midcentury modern homes?

We have a few options to fulfill our very real need for additional living space.  the first, and probably most popular option among our peers, would be to sell our current house and upgrade to a middle class, work-till-we-die-house.  The second option would be to renovate our current house to be a middle class, work-till-we-die house, and the third would be to enjoy our current living space and finish the basement to include additional living space without changing the existing footprint of our house.  Let’s look at each one, in depth.

Upgrade To A Middle Class, Work-Till-We-Die Home 

upper-middle-class-homes-s-cfad9ead845cc95eI really should delete my app.  It does me no favors.  I LOVE real estate.  I LOVE REAL ESTATE.  I REALLY do.  Obviously, this love of real estate stems from my childhood and my constant need to overcome my early living situation.  Not that I agree with it now, but I know that’s why my interest in real estate blossomed into an obsession.

So, let’s examine the idea of selling our current home and upgrading to the standard four bedroom home in a nice development.  I bought our current house 5 years ago for $223,000.  It sits on a nice lot with mature trees (I got something right) that is just under 0.5 acre.  I put in a six-foot privacy fence surrounding the “soccer field” backyard.  My daughter loves our house, despite it being small.

We could probably sell our house for between $230,000 and $235,000.  After realtor fees and seller’s assistance (which I assume the buyer would ask for), we would likely walk away with around $10,000 – $15,000, after paying off what we owe on the mortgage.

We would then apply that money towards a down payment on a bigger and “better” home and start all over.  The new home would probably cost us around $2500/month for the mortgage, taxes, and insurance.  Our current home costs us $1641/month.  Hmmmm…

Upgrade Our Current Home To Be A Middle Class, Work-Till-We Die Home

1A less expensive option would be for us to put an addition onto our current home and increase the square footage from 1300 to between 2200 and 2500.  We would be building out into our nice yard, so that would stink, but it would be really nice to have a huge kitchen, formal dining room, and a substantial master suite.  This would be great for resale, except we don’t plan on selling this house in the foreseeable future.  Even with doing this renovation, we miss out on an office and don’t get a second, segregated family room, which would be really valuable for entertaining, especially as Mini Monster gets older.  We would also want to finish the basement but probably wouldn’t be able to afford to do both at one time 🙁

The first quote was everything, except the basement, for $150,000, which I thought was high but not outrageous.  The second quote (from the builder of my house) was $60,000, which I thought was reasonable.

Newsflash:  We already live in the house that this builder built anyway.  If he says he can do it for $60,000, I believe him and know he’ll do a good job.  The first quote was recommended by a very close friend whom I trust.  However, he works in a more expensive area and does not mass produce homes like my local builder.

Unfortunately, like option #1, this would need to be financed through a renovation loan, putting us deeper into debt.

Reject The American Consumerism Dream Of Staying In Debt

The least expensive option is to reject the idea of needing something that is bigger, and really not better, and stay put.  As I mentioned earlier, our current home is 1300 SF on one floor.  That also means that there is 1300 SF of unfinished living space on another floor, just below our feet.  We had two quotes to finish our basement which would include adding a master suite (complete with a walk-in, tiled shower and fireplace!), an office, a family room, and a storage area.  This would give us the additional space we need without increasing our taxes, which are currently sitting pretty (for this area) at $3500/year.  We would gain our awesome master suite and still keep the master suite on the main floor.  This would become Mini Monster’s room and when we do go to sell it we can market the basement suite as a guest suite and not the master suite.  Think Think!  Mr. Money Monster gains an office and we gain a second family room on a separate floor, which would be fantastic for the entire family.  We also free up an extra bedroom for a second Mini Monster (maybe ;).

The first quote was everything for $60,000, which I thought was reasonable!  The second quote (from the builder of my house) was $30,000, which nearly made me spit out my coffee!

The other good part…we could pay cash for this renovation!  That means no increased mortgage or taxes!  And, we get to keep our super affordable mortgage, until it’s paid off, of course 🙂

Decisions decisions…  I think I have my answer!

What Would YOU Do?

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