Downsizing to a smaller rental - and loving it
By adamg - 8/14/09 - 7:41 am
Dave Atkins reports on how he, his wife and their three kids moved from a four-bedroom house they owned to a two-bedroom house they rent:
... We sold a lot of stuff we'd had for 10 years or more and moved around with us--some of it hadn't been unpacked since California. There are so many things...you realize, "why do I have 6 pairs of jeans when I wear the same ones over and over?" I'm sure I'll have more observations as living small becomes more routine, but so far, I like the feeling of efficiency and sustainability.
Comments
Poor guy, wait until those
Poor guy, wait until those kids grow up a little and that room he has them in becomes painfully cramped. I live in about 750 Square feet and think its just right for one person and could work well with two people. Tossing a kid into the mix or two or three would really cause pain down the road.
I hope it works out for him but I look forward to the blog post two years from now when he is screaming about all the kids toys that took over the house.
"why do I have 6 pairs of
Maybe because you don't want to wear the same pair working on the bathrooom and going out to eat? Let's hope - for his wife and co-worker's sake - that he didn't dump all but one pair of boxers.
Temporary solution
I'm guessing that this arrangement will be temporary, until the kids get a bit bigger, which will be fine. It's a rental, which works out well for a temporary situation.
Right now, they have set certain priorities. If they have the means, I think their priorities will change in five years or so and they'll upsize to another bedroom.
Adam: Please update us in five years. ;-)
Gross dude! Try changing
Gross dude! Try changing your jeans! I am sure your family would appreciate it, in that cramped space.
This is one of those times that a person has to try his hardest to justify a bad decision, both to himself and the world. I feel sad for you, my friend, and your children. I give it a year before your wife is ready to strangle you.
dear anon
maybe he had no other choice? times are hard. some of us have been forced to make "bad decisions".
One pair might be pushing
One pair might be pushing it, but I only have three pairs I wear regularity.
It ain't underwear, and it ain't an undershirt. You just need to wash when dirty, and there's nothing wrong with that. It also gives you the added benefit that your favorite pair of jeans will last quite a bit longer.
I wasn't being completely literal ;)
I wear "dress clothes" to work every day, so the "one pair of jeans" is what I wear for a couple hours at night...
As far as time goes, sure, we may get tired of this in a year. Our original plan was to rent while we looked for a 3 bedroom house in the same neighborhood. The great thing is, we have no pressure on us to buy now, so we can avoid the mess we had last time when we bought before selling and had to carry two mortgages for several months.
Now if you move into a 1200 sf house
You'll feel like you've moved up to a mansion.
(We lost about half the space we had in Atlanta when we moved to Boston -- no plans to get anywhere near Atlanta again, however).
MEK
Flexibility is the key
There were only two good financial reasons to own your home:
1. You can borrow tax-free, invest the money, and come out ahead
2. The underlying property values increase
Neither of those are true right now, and it'll be some time before they are true enough to balance out maintenance, repairs, insurance, taxes, etc.
Meanwhile, if you rent instead of buy, you can trade up, down, and sideways whenever you like (+/- your lease term). There's no such thing as "house-poor" anymore, and you're less tied to your employer, since you can move to another city without worrying about selling your house.
Taxes
I think you're overlooking the tax benefits you get from owning a house. Being able to deduct the interest you pay every month -which is virtually your entire payment early in a fixed rate mortgage - is very helpful at the end of the year. I went from owning to renting and back to owning and definately experienced the pain.
That does not outweigh
the lower carrying costs of renting, the amount one has to pay out to acquire a house (down payment, insurance, legal fees, inspection, closing, probable renovation/repair, etc), and the most important fact: increasing leverage now is risky, as you'll likely have little flexibility, and your down payment initial equity is likely to be eaten up by immediate market-value losses should you, say, lose your job and have to sell.
Unless you think that local real estate is NOT still overpriced, or find a truly smashing deal you can afford despite job loss, or you're wealthy. :-)
That's not a tax benefit, though
If I understand you, that's an "enforced savings" benefit; you had federal taxes deducted from your paycheck at the normal rate, and you got the money back at the end of the year because your interest was tax-deductible.
If you figure your deductions right, then it's just tax-free interest, which is #1 above.
Those are just the *financial* benefits, though. Depending on the market, you might be able to afford to buy a nicer place (especially given the tax-free interest) than you can rent. In Virginia, where I lived at the start of a decade-long housing boom, that was the case; I knew 21-year-olds in college who bought townhouses and rented to their roommates, because the mortgage payments were lower than the tax-adjusted rents.
And, of course, there's the freedom of knowing you're in charge of the property, you can improve it, you won't get kicked out, etc. That gets traded for the freedom of renters to abandon the property at any time.
Kids' room
Kudos on simplifying.
Regarding the kids' room, I've seen some creative ideas for space-saving bunk beds on ikeahacker and randomly on the Web.
Used IKEA can be found cheap in town on CraigsList until September 1st. My entire place was furnished this way, with exactly the pieces I wanted, and for a small fraction of what it'd cost new.
Downsizing?
My husband grew up in 750sq ft for 5 people. I grew up in 600 sq ft for 4 people.
I'm glad people can choose this, because I wouldn't push it on anybody. That said, growing up in such conditions makes one reasonable about housing choices - we have 1350 sq ft for four and resisted getting anything we couldn't swing on one income.
I think 1350 for four is a
I think 1350 for four is a good number, large enough people can spread their wings but small enough that it is not impossible to clean or maintain.