We had a home for 5 yrs in the Midwest that we sold during the recession. Since then we have been renting for 5 yrs. Now we have reached a situation where we need to settle down somewhere. From my previous experience in buying a house, I have concluded that one should buy a home for a real long term and not do any 5/1 ARMS etc since once cannot predict the market volatility. In my opinion,a house locks down on various options such as schools, extra curricular activities, recreational opportunities etc. I don’t want to buy a house now and later on feel bad about locking the kids with a set of opportunities. I also don’t want to buy a home that I can’t hold for a real long term like for 15 or 20 years.At the same time since the interest rates are relatively low now,I think I should make a home purchase. I don’t want to miss the boat and regret later ( which I am already since the real estate market has improved a lot). There are no public prep or magnet schools in the area I live now. I am not too keen on private HS. I am not sure if the kids have the capacity to get in to a public magnet. But just in case if they do, I want them to have an option of going to a prep school. How do I think ahead of the forthcoming years and invest in real estate ? I mean we can easily buy a home and sell later whenever we want to but as we all know it is not that easy without losing money. Pl let me know your valuable opinion. Thank you !
This should undoubtedly be moved to the cafe, but I will start by saying that the first consideration for me was always the school system. Although we considered it, I would not buy in a location where I would not feel comfortable sending my children to the public schools. Even if you intend to go private, you never know what will happen, unless you are lucky enough to have substantial, probably inherited, wealth.
In my opinion…buying a house is about location, location, location! This includes a location with well regarded schools of you have school aged kiddos. It’s about location that is convenient to work, and other things you regularly need to travel to.
It’s also about getting a house that will serve your needs once your kiddos have moved out of the nest…if you choose to stay out. So it might mean the potential for one floor living, not a huge amount of maintenance, etc.
Assuming you are young-ish with young kids, it’s all about the school system. Once you pick your town (or maybe two or three towns), then you can worry about other things, such as size of house, size of property, aesthetics, appreciation, etc.
It is not clear if you have young children that need to go through a school system? If your kids are high school age, the school system priority goes down a bit because you can always transport to their current school until they graduate.
Reason I ask is because most of us are parents of college kids or kids getting close to entering college.
Coralbrook…where I live, if you don’t live in district, and wish to have your kids continue at their current school,when you move out of district…you pay tuition for the kid to attend at the old school. Only exception is if a family relocates just a couple of months before The end of a school year. Our schools will allow the kids to finish that school year without tuition.
“There are no public prep or magnet schools in the area I live now.”
Why is this a problem for you? The regular public schools may be doing a fine job of educating the students. Find out about that.
Mantras - I share your philosophy. It certainly makes a lot of sense to buy a home for many years to come. So, besides all financial and practical considerations, it would be hugely important for me to find the community and the house you love and feel instantly connected with. When we shopped for our primary and vacation homes in two different states, both times it was very striking to me how different are tastes and preferences of individual buyers. We’ve seen bidding wars for those places we would never even consider, even though they met all our search criteria and budget on paper. And then we’ve seen communities and homes we instantly felt attached to. Don’t underestimate the chemistry of possible choices - this will be your family home for many years to come, and you want it to feel like home. Sounds trivial, but many people I know have made this mistake, regretted it later, and had to make the difficult choice between moving again or living in a home they don’t love.
“It is not clear if you have young children that need to go through a school system? If your kids are high school age, the school system priority goes down a bit because you can always transport to their current school until they graduate.”
??? Since when can you continue to send your kids to a public school whose borders you don’t live within? And “transport to a current school” assumes a non-working family member who an chauffeur at all times or an extra car.
You absolutely may not go to our schools if you don’t live in the district, even if it’s at the end of the year. No paying to do so, either. We have a staff member whose job it is to smoke out those who live elsewhere and say they live in the district.
It really depends on the local SD practices and policies. In our current SD, out of the district kids can get a waver to attend the only school in the area with IB program if they qualify to be in the program. The caveat is that parents have to provide their own transportation.
“And “transport to a current school” assumes a non-working family member who an chauffeur at all times or an extra car.”
Not necessarily. We both worked full time and managed to provide chauffeur services, so it can be done. Our family was not unique - many others with two working parents managed to do this.
Well, I travel for work and have a spouse on 24/7 call. No 9-5 here!
Of course it depends… That’s what I am saying that it does not automatically preclude attendance at a school without bus transportation.
(My work was pretty much 24/7 - but not limited to spending 9-5 in the office, and the schedule allowed us to do after school pickup at 3 (high schools start at 7 am here in our neck of the woods, so morning drop off was not an issue). )
Anyway, schools are just one consideration. If the OP is planning to stay in the house long after the chicks flew the nest, would it be reasonable to pay a premium for the school district and the higher property tax?
If you buy a house with good school system, house will more likely retain its value. I always voted for educational spend in my town even though my kids did not to the public school, because I knew value of my house was directly tied to our town’s public school ranking in our state. While your kids are in school, live in a town with good school system, then move to a town without its own school system if you want to lower your real estate taxes.
I would also put minimum down because value of your house will be the same whether you put down 10, 20 or 30%. There is no reason to tie up all of your capital in your house.
i’m not in any way familiar with real estate or investing. We do live in the midwest; and have 4 kids; we’ve been in our house 13 years.
If i were to do it again, here’s what i’d do: i’d buy a smaller house, both in size and in price; but i’d make sure it had a large basement for the kids and school group parties. I’d put that extra money i could have spent on housing in a college fund. I’d realize that houses in our area have not been investments nor have risen any in value over the last 10 years, so i wouldnt look at it as an investment. I’d buy a house in a fringe community of a large town; that often provides more of a “community” than cities with lots of school choice. and I’d get a trampoline (i still can as i have a youngish kid yet!)
I’ve never been one to invest in houses either but in this particular case since you are renting and wish to purchase a home it may be wise to jump in while the market is low and more affordable. If you wish to build or buy later you would have a hedge against the rising prices. The point is to buy a home based on location that WON’T lose value and hopefully you can transfer gains into a new home should there come a time to move. If you have kids already pick an area that would work for the next 5 years with a decent public school.
@bgbg4us, check out insurance before getting that trampoline. Don’t expect to make money on a house. Buy it because you like it, can afford it, and want to live there. Otherwise, you may be very disappointed.
In most of New England, school districts are town by town. If you move to another town, you go to school there. Each town has its own HS. Only the cities have more than one. In Maine, I think that Portland, population roughly 60K, is the only town with two HSs. In the more rural areas school districts include several towns, but that is only because the population is small. As you would expect, these districts do not have multiple HS options. For example, our district includes 2 towns, and it has one HS. Each graduating class is typically a bit under 200.
OT, but this is one reason why the oft-touted concept of “school choice” makes zero sense here.
We bought a very small house in the best school district in my area before we even had a kid. We never moved up. We didn’t even like our house but knew the importance of a good school district. It took many years but we eventually remodeled and put an addition on and I love my house so much now I don’t ever want to sell. There is also no need to downsize because we never up-sized.
My advice is always to buy the cheapest house in the best school district.
Thank you all for the responses so far. I agree that the house you buy for your living should never be considered as an investment.