The great neighbor who lived across the street is moving. They are moving to a richer neighborhood (he’s an attorney and his wife is a nurse).
They bring in more income than we do… probably at least double the amount…
So just for some background information, their house is probably worth about $220,000 to $250,000 which in our city is a pretty decent house. They are moving to a house that is in the range of $400,000 to $500,000.
I think it’s a bad move, here’s why:
- They are only moving about 1 mile from where they live now.
- The Elementary School their kids will go to will be a worse one than they are currently at (more crowded, and a bit rougher).
- Based on how much they put into the house across the street, I’d say they are losing about $10,000 to $20,000 in enhancements and upgrades.
- The economy isn’t that great, anything is still possible.
- They need to start to build their non-retirement financial assets. I know they have a lot of credit card debt.
- They would have had their original house paid off in another 5 years.
- Their real estate taxes will increase by double (so it will be $6,000 a year).
- They’ll gut and refinish the new house like they did with the old one. I’m not even going to guess how much that will cost.
- The oldest kid is 14 and I don’t believe they have started saying for college yet for her.
So basically they are going to pay more than what it appears for this new house. At least they did get to take advantage of the fed tax credits for moving!
What do you think of such a move? To me, it seems like a pretty large expense!
-MR
I personally hate the actual process of moving so much that I rather not do it again until my knees start hurting on our stairs. I’ll be lucky to get my husband to stay in place for more than 10 more years though…
Given the fact that your neighbors have so many financial targets left to hit and the school will be worse, I have no idea why they’d want to leave…
I’m with you. Seems like an awful lot of stress and financial strain to take on to just move a mile away. Sounds like they suffer from “Big hat, no cattle” syndrome.
Wow – that’s crazy. Points #1,2,6,&7 would be enough for me to reconsider.
It’s also sad that for as educated as they are, they’re focusing on their lifestyle instead of their duaghter’s future…
I am guessing this is a colossal house. So many people can’t resist taking advantage of some of the huge deals that are out there, and it sounds like that may be the case with your neighbors.
Some people are just never satisfied and are always reaching for the next best thing. Unless they have completely outgrown their current house, I don’t get it. Especially if the school is not as good.
I hope you get a great neighbor to replace them!
@Budgeting in the Fun Stuff
Ironically, we didn’t expect (or at least I didn’t expect) to live in the house we’ve lived in for as long as we have! I’m ready to move on, but everybody else want to stay!
My neighbor epitomized “The Joneses”, they threw very fun and exciting parties, always are getting new cars, and their kids have the coolest toys…
They were also kind and good people too tough! I’ll be sad to see them leave!
@Find and share referral rewards
They have always done things large… 🙂
Fun couple though, and my kids played with their kids almost every day (at least the youngest of their kids…)
@FinEngr
Their daughter is just the tip of the iceberg! They also have 2 sons that are a little younger than their daughter!
@Everyday Tips
Yeah, I think it was probably bought for a decent price, and then he got the tax credit on top of that… Heck, it’s almost like the government is paying you to be “The Joneses”…
I also know a few friends that are looking too. The housing market prices are so low…
From a personal perspective it is interesting that their annual mortgage interest payments will exceed my entire cost of living. Being financially independent and living off investment income, it’s a bit like if I lent them the money to live in their oversized home and in return, they’ll work to pay all my expenses.
@Early Retirement Extreme
Yeah, I just couldn’t bring myself to take out another large mortgage (although they only had 5 years left on their old house, so I bet they probably put $150,000 towards the downpayment… maybe) 🙂
I’m in the same camp as you are on the investment front (although I don’t have near what you have invested)… I want to start to build my portfolio, I would really like to receive at least part of my income from investments someday.
From the information you provided, the move seems to be made for the wrong reasons. They clearly have other financial priorities to deal with, and it makes no sense to move your kids to a rougher, worse grade school district for a better house. Oh well…to each their own!
@Squirrelers
Shoot, I have to admit, I wouldn’t mind having more yard… In fact I think I would buying a new house just for more yard. That said, the most I would consider purchasing over the current value of my house is an additional $50,000.
But for now, the kids are happy, so I’m content. Besides, I just got my house mortgage paid off this past February. I want to enjoy being debt-free for a while 🙂
i have seen that happen 2 with our neighbors. i asked myself that exact question when they did.
at the end of the day it has to be a mental think, wanting more and not caring about the consequences.
@James
Yeah, I’m sure it wasn’t an easy decision… For now, we’re pretty content to stay where we are 🙂
They must have won a big lottery, why should I comment on them? Well! Let them be happy.
@London removals
Hmm, interesting idea. I guess if they did win the lottery, I’m sure they wouldn’t tell anyone…
Yikes! They really need to read The Millionaire Next Door. Perhaps if you see them during the holidays you can gift them that book. 😉
@Little House
Good point! Perhap I’ll buy it for them as a house warming gift 🙂
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