When to buy a primary residence

Question

Good evening,

For those who started out househacking, when did you decide it was time for a primary residence that you planned on living in for 5+ years. My wife and I househacked our first duplex in 2014 and bought our second househack (house with a detached apartment) in 2016. I'm looking to buy again in March or April of 2018 and cannot decide whether to buy an investment only property and stay in our current househack which is a bit small (we now have two small children) or buy a house we can comfortably grow our family in. Any advice is greatly appreciated.

Thanks,

Ryan

Ryan Hoer · Answer

@Craig Curelop I have. The property I'm in now has a small 3 bed house and a detached 2 bed apartment. I can probably get by here for another year or two, but it just seems more beneficial to move and get owner occupant financing. I haven't found any other properties in my area similar to my current house and I'll openly admit we overpaid for this one.

Craig Curelop · Answer

@Ryan Hoer - Have you ever thought of purchasing a nice single family home for you and your family to live in? One that either has a carriage house in the back (or one that allows you to put one in)? Then you could live in the large house while AirBnbing the back house.

That way you and your family can enjoy the large house while the AirBnb helps pay down the mortgage.

Ryan Hoer · Answer

Thanks @Thomas S. I understand that it's a liability, but I do wrestle with creating a certain level of comfort for my family. Most duplexes in my area are 1 or 2 beds, which isn't enough space, though I do routinely search for larger multifamilies with at least one 3-bed unit.

Ryan Hoer · Answer

Great points @Hanna Brown. I think we are leaning towards something similar. Something a little bigger for the family, but has an element where we're able to put in some sweat equity.

Thomas S. · Answer

A personal home is a liability that will cost more over time than it will likely ever be worth. Your best option would be to continue to expand your investments through house hacking until your investment income is great enough that you have money to throw away. Then you can buy a home.

Hanna Brown · Answer

My husband and I went back and forth about that issue for years. It's a really hard call. You will almost certainly be taking a standard of living increase by doing that (tied up capital in home, increased property taxes, insurance, landscaping, the expense of moving/furnishing etc) It will slow your rate of growth for sure. The longer you can hold out, the better from a wealth point of view. Whether of not it's worth it is a personal call, though. Your kids will only be young once, so that's certainly something you'll have to weigh.

After acquiring 4 rentals, hubby and I purchased a foreclosure home and fixed it up to live in. We were in no rush to leave our duplex, but rather made lots of lowball offers, trying not become attached to any one home. We had a list of non-negotiables, but price was the most important consideration. The home we ended up buying was the was the best of both worlds. Lots of equity on the buy and exactly what we were looking for in terms of layout/space/acreage/property age. I don't regret it for a second. We have three young toddlers, and they will grow up with memories on our acreage. That being said, we are not stretched financially thin, and it wouldn't be worth it to me if we were. I'd rather live in a small home than feel stressed financially.

A lot of it has to do with what you are comfortable with financially, what your income situation looks like, and what your long term objectives are. These will look different for everyone. Good luck! :)