My spouse and I are selling our expensive 3 bed/2bath condo in a large city where we live and we are moving as soon as we sell.
We have two housing options after we sell. Move into our 2 bed/2 bath condo (previously just owned by me) that we are currently renting out which is located in an "up and coming" neighborhood and farther from our jobs or do we move into a 1 bedroom rental, closer to our jobs and in a better neighborhood. Below is a list of financial comparison and a list of pros vs. cons. Any comments/suggestions are always welcomed! I have thick skin so don't hold back.
Monthly Expenses Comparison:
2 bed/2 bath condo in "up and coming neighborhood":
Mortgage and Taxes: $1400
Condo Assessments (include insurance and gas heat): $250
Electric Bill: $100
Condo Repairs: $100
Parking Space Rent: -$90 (we own 1 spot that we would rent out for extra money)
Tax Deduction from Interest/Taxes: -$200 (this how much I would save in taxes each month after deducting mortgage interest and property taxes)
Total Housing Expenses: $1560
1 Bedroom/1 Bath Rental in Great Neighborhood, Close to work:
Rent/Utilities Budget: $1500
2 Bed/2 Bath Condo Monthly Loss because rent income is less than expenses: (Rent Income – Condo Expenses Mortgage/Taxes/Assessments/Repairs): $250
Total Housing Expenses: $1750
Living in 2 bed/2 bath condo
- Living in a owned condo and not a rental (no landlord, no management company)
- Larger space: 2 bedrooms vs. 1 bedroom place and 2 bathrooms vs. 1 bathroom
- In unit washer and dryer instead of communal washer and dryer
- Very quiet place (no worries about noise above/below unsure what the situation will be in a rental)
- Reduced expenses $190 less each month ($6,840 total less over 3 years)
- Reduced liability from not being a landlord
- Reduced stress from being a landlord, searching and finding a tenets, damages to unit, vacanies, etc.
- Larger size home can accommodate children (no children yet, but we are planning on having them within 3 years, have to get finances in order first) thus there will be no need to move after having them where we would need to if we lived in a one bedroom place.
- Located across the street from free recreation such as tennis courts, pool, playground, and park
- Neighborhood is not as nice, convienent or safe
- Higher crime rate neighborhood
- Longer commute to work for me (20 minutes longer each way, 40 minutes longer total each day)
- Farther from grocery store: 0.9 miles to the closet grocery store compared to 0.4 miles away (we sold one car and we are selling the other one so we will be "carless" soon)
- Although 2 bed/2 bath is larger which may seem like an advantage, the larger the space will allow us to consume more, utlities, fill the space with crap, etc. although we are planning on having children in <3 years
In summary, do we choose the better neighborhood, more expensive monthy expenses ($190 more each month), for a smaller space or do we choose the more inconvienent, larger, cheaper place that can accomodate children?
FYI: we cannot sell the 2 bed/2 bath condo without taking a huge loss (>$60,000). I bought the condo before I discovered ERE.
Thanks for your comments.