Don’t you love it when the word “logistics” is in a post title?
Doesn’t that make you DESPERATE to read it??
But seriously: Enough people said that they want to know about how we’re handling things like the great Rent vs. Buy debate, school choice, and home selection that I’m convinced that at least some of you will be able to keep your eyes from glazing over. (I mean, I certainly don’t find this stuff boring – I think real estate is totally Grand Drama, and kind of the most fascinating topic ever, but I also get that I definitely didn’t want to talk about, like, taxes and variances and school districts in my former life as a non-parent-y rental apartment-dweller.)
Anyway, let’s keep on trucking.
I figured the best way to do this would be to answer a few of the questions I’ve gotten via email, Twitter, FB et cetera over the past couple of days in a single post. If you have any more questions put them in the comments, and I’ll add the answers to the post. And please, please – if you have information on any of this stuff, share it! The below, as always, is only my inexpert opinion, so take it for what it’s worth.
To Rent Or To Buy?
There are three primary reasons that we feel that it makes more sense for us to purchase (the first applies to anyone considering buying, the second applies only to people who currently own a home and are considering purchasing a new one, and third applies only to people who operate a business out of their home):
1) You get significant tax breaks as a homeowner (a 4000/month mortgage, for example, could yield about 700 a month in tax breaks, making the “actual” monthly payment more like 3300) – you can choose to increase the number of deductions and reap the benefits immediately (e.g. with a higher paycheck every month), or have the benefits accrue and create a situation where you’ll get a tax return at the end of the year;
2) If you make money on the sale of a property, you have two years to reinvest that money without paying taxes on it. Edit: I was wrong about this; what I cited above is an old law. Single homeowners can avoid paying tax on profits up to $250k, and couples can make up to $500k on the sale of their primary residence without paying capital gains tax, even if they do not subsequently purchase. Click here for more info.
3) If you operate a business out of your home (whether you’re a writer, an artist, a therapist who sees patients in her own home, whatever), life is easier in some ways if you’re in a single-family home (as opposed to a rental apartment, but this also applies to co-ops, HOAs, or any living spaces where a landlord or board may have instituted rules preventing using the home for business-related purposes).
In our case, the area we’re looking at is so expensive to rent in (largely because the housing market is so insane, which drives up rental prices as well) that the tax break on mortgage payments makes the monthly cost of ownership much more comfortable for us than the monthly cost of renting. And we did end up making money on the sale of our house, so we have two years to reinvest that…but all other things considered, we prefer reinvesting right away to moving twice over the next year or year and a half and blowing through a portion of our savings on inflated rental prices. (Again, we’re open to the idea of living in a month-to-month rental for the first couple of months so that we don’t feel rushed into a purchase.)
And finally, I do a lot of work with home decor and home improvement clients, and it’s important to me to have a space both that I can physically work on and alter (which you can to some extent with a rental, but not to the extent that I’d need), and one that I can shoot in without potentially being in breach of contract with a landlord. I sometimes have crews and vans and tons of equipment in my home, and that’s not necessarily something you can swing if you’re renting.
What Size House Are We Looking At?
When I mentioned that I felt like we were going to need to compromise a bit on interior space, a reader asked what I meant by this in terms of square footage. Of course what you need is particular to your own family, but for us – two kids under four, two small dogs, and two people who both do a lot of work at home (Kendrick with music, myself with everything you see here) – what that works out to is at least 1500 square feet.
What we’d like to find is a 3-bedroom house with some kind of extra living space: a backyard with extra room for the kids to play, or (ideally) a family room right off of the kitchen. We get that the bedrooms will likely be tiny if part of the square footage is taken up by a family room; that’s preferable for us. (And if you’re looking, always remember that the square footage that you see listed may not be the actual square footage; our house, for example, is technically about 1200 square feet but has two bonus spaces that aren’t included in the square footage – the finished attic and the garage, which has been converted into a studio – that make it feel quite a lot more spacious.)
How Are We Choosing A School District?
This has been a learning process. What we’ve been doing is plugging every house that we come across into SchoolandHousing.com, which gives you the API score of the elementary, middle and high schools assigned to that address; we’re really only focusing on the elementary schools, because that gives us a lot of time to make a change if need be. If the score is too low, I don’t even bother looking at the house. If the score is very high, the house is an automatic possibility because we’d be willing to compromise on quite a lot for a truly great school. If the score is in the middle range, I do some more intensive research into the assigned school (because of course there are lots of other factors to consider besides test scores) before deciding whether to view the house.
Two more resources I’ve been using to cross-check schools: GreatSchools.org, which gives you a rating based on parent and student-submitted reviews (so it’s highly subjective, but still helpful) and SchoolDigger.com, which provides information on demographics, student body size, student-teacher ratio, and a lot of other elements that can help you get a fuller picture of what the school is like.
What Are We Looking For In A House?
1. Good school district (see above);
2. At least three bedrooms (we want our kids to share a bedroom when they’re very young because it sounds fun and bonding, but very much want a room for guests to stay in…or a room to move our other child into if the shared-space thing ends up being less “fun and bonding” and more “terrible and everyone is awake all the time, always and forever”).
3. Some kind of bonus space: a family room in addition to the living room, a spacious yard, whatever. Just something.
4. Light. I need light. (But I’ve spoken to contractors about some of the properties we’ve looked at, and FYI apparently skylights aren’t especially expensive to install…and make a huge difference when you’re dealing with those low-ceilinged ranch houses that make up like 99% of what’s available in the South Bay.)
5. Elements that I can fix up to add value and personalize the space. I actually prefer a slightly unfinished house, because I think it’s fun to do things like paint walls and redo floors, and houses that are a little dated in those ways tend to sell for a lower price. What I don’t want are major structural issues (foundation issues, retaining wall issues, etc), since those problems can end up costing literally tens (or hundreds) of thousands of dollars, and: no.
So: those are the questions I’ve gotten so far. Anything else? Ask away!
How To Buy Your Very First Home
How To Sell Your House (Or: How I Sold My House Without Going Insane)
Our House: A Quick Tour, Just For Fun