patrick.net

good luck to you. If you can put that much down then just do it. I assume your in the 1%

lisalisa says

good luck to you. If you can put that much down then just do it. I assume your in the 1%

Yes, we can put down that much. We have zero debt and a decent amount of liquid savings (around $400K), not including 401Ks. I sold my house in 2003 and have been renting ever since.

Are we (me and my wife) "in the 1%"? I don't know, and it certainly doesn't feel like that. We are a dual income household, we work hard, make a good annual income and live nicely, though not extravagantly.

But we're outgrowing our rental, plan to start a family soon, and decent houses cannot be had as rentals. Most rentals suck. We're at that point (both 39 years of age) where it's time to enjoy our house as well, not just the math behind it.

For my personal situation I would not buy it. There is just me, my wife and 5yo kid. I can't imagine using 6bd as well as fixing a roof that big and paying for pool maintenance. I would rather downsize into a better neighborhood with better schools and either pay the same money or less for a smaller house. That's the kind of house you would buy at Costco. What seems like a good deal due to size may end up stale and wasteful. I'm just sayin'.

dex248 says

What seems like a good deal due to size may end up stale and wasteful. I'm just sayin'.

But, if all the "math" is correct, buying way below "replacement cost" should be prudent, right? Sure we don't need that much space, but we do like a spacious house as such.

The same space in the "better" neighbourhoods is north of $2M.

careyre says

Can you imagine what a new roof will cost?

About the cost of roofing a 3,200 sq foot house that's all on one level.

What do I think of this house? It's gorgeous. 6 bathrooms? Even filled with guests, no one's gonna be doing the potty dance. If you can afford it and you feel good about it, why the hell not?

repo4sale says

EMOTIONAL DECISIONS = LOOSE MONEY GUARANTEED!

I AVERAGE 49% A MONTH ON NON-EMOTIONAL REAL ESTATE FOR 198 SALES... FROM 1999 TO 2008! (bought 1992 to 2000).

If your LOWEST income in 10 years is 300% of the monthly pmt & you have $100,000+ in savings after the down payment. Go for it as a "CONSUMER" with "Financial benefits".....

This is not a "Financial Investment" with "consumer benefits" like a one of my deals that average 1176% gross profit...

Record: 700+ transactions in real estate, 114 court cases, 5 passports filled, 4x/world, 68 countries visited & researched for investments, 35,000 pages reader per year on investments, finance, real estate, law, taxes, politics & economics.

100-200%/Yr California Land TIC 1031 or cash in early 6%/yr prorated $100kMi

huh?? I may be slow today....Plain English please?

How many people will be living there? I'm not sure why you would want that much house if you aren't going to use it all; it's more to clean, more to decorate, and more to break.

StoutFiles says

How many people will be living there? I'm not sure why you would want that much house if you aren't going to use it all; it's more to clean, more to decorate, and more to break.

Two for now (me and my wife). We're planning to start a family shortly, so atleast 1 kid in the near future. And we have lots of family that visits off and on.

Nice pad. Very nice.

dex248 says

That's the kind of house you would buy at Costco.

LOL. Love this!

Har says

Patience my young Jeti. Better deals are on the way. Wait.

Isn't that "always" the case? At what point do you decide: "I don't want to spend my life calculating housing math. I want to come back home to a nice pad, invite friends and family over, now and then, and ENJOY (a lil bit?) my life"?

Edit: Lemme add something here.

I'm not all head over heels over this "particular" house as such, but I'm tired of living in small houses/rentals. We make good money, and can certainly afford something much bigger. The problem is that it's just too damn difficult to decide WHEN IS THE RIGHT TIME and/or IS A PARTICULAR HOUSE PRICED RIGHT. (Sorry, for the caps, but I hope you get my dilemna). Sure, there will always be other houses, either cheaper or expensive, bigger or smaller and what not.

Just what ratio would you consider, when really really making that call? Price per sq/ft? Rental comps? Land area? There's gotta be something.

I/We keep talking about houses left and right, but there's a time for action. I *think* the time is now (with a house like this), but I could be wrong. Hell at $68/sqft you can't even build it at today's costs for the asking price.

Sorry for the rant.

I think if Patrick's numbers work and you LOVE the house, go for it.

David9 says

I think if Patrick's numbers work and you LOVE the house, go for it.

Do I LOVE the house? - No.
Do I LIKE the house? - Yes.

With all default assumptions in Patrick's calculator and a rent figure of $3200 per month, I get this:

Actual value for 7810 Warfield Rd, Gaithersburg, MD 20882 is $465,065.
A buyer paying $675,000 will lose $121,086 more than renter over 7 years. Do not buy.

kapone says

Do I LOVE the house? - No.
Do I LIKE the house? - Yes.

With all default assumptions in Patrick's calculator and a rent figure of $3200 per month, I get this:

Actual value for 7810 Warfield Rd, Gaithersburg, MD 20882 is $465,065.
A buyer paying $675,000 will lose $121,086 more than renter over 7 years. Do not buy.

Then why not rent it? or another in that neighborhood?

kunal says

kapone says

Do I LOVE the house? - No.

Do I LIKE the house? - Yes.

With all default assumptions in Patrick's calculator and a rent figure of $3200 per month, I get this:

Actual value for 7810 Warfield Rd, Gaithersburg, MD 20882 is $465,065.

A buyer paying $675,000 will lose $121,086 more than renter over 7 years. Do not buy.

Then why not rent it? or another in that neighborhood?

Houses like these are rarely for rent (and this one isn't either). Very few SFH for rent in these types of neighbourhoods.

Wood = $.

Get a painting contractor to give you a realistic cost of maintaining, repairing, and painting all that exterior wood. Also, cost of "re-skinning" the house in a cement or fiberglass siding product.

Also, be sure to visit at night to see what kind of lights those industrial buildings cast and drive over there and look for loading docks. If you see any, find out when deliveries are made.

I agree with some of the comments that ask why you need so much space. If you've never had that much space, it might seem nice to have, but take this from someone who moved into an oversized space and then left after one year: More space does mean more to repair/maintain, more to fill up with furniture, more time to deal with. Plus, there's always going to be some sacrifice on quality, if you're buying a large space for the same price as a smaller space. We found that in the end, having a slightly smaller space but nicer (location, quality of house, etc.) was actually better for us.

Extra space just translated into extra junk being stored, for us. I think it's better to get a place that correctly fits your family size (for the foreseeable future) in addition to a little extra for guests. That's just my 2 cents though, others may feel differently. Good luck!

One more thing: Your wife will be compelled to decorate and furnish EVERY room.
Set a budget and a timeline. There is nothing wrong with pulling a door shut to an empty room and leaving it that way for as long as you want.

If the bedroom count is excessive for the area you might consider converting a bedroom or two adjacent to the master bedroom in to a walk-in closet, a master bathroom, or a master retreat...

If your in your peak earning years, which I'm guessing you are, and your disposable income is as such that buying this home is more of a drop in the bucket than a large expenditure to you. As long as your still on track for your retirement moneys and such, budgeted for the kids you can fit into the place, and the costs associated with a place like this, great job security, etc.
Then, it's a beautiful place, personally I like smaller, but it's because in my home state, property taxes on this place would be 10-15k a year.

Big decision, just look at the thread in this same bucket I started titled should I buy this house, and the taxes are nearly 3k on that little place.

everything says

Then, it's a beautiful place, personally I like smaller, but it's because in my home state, property taxes on this place would be 10-15k a year.

The property taxes ARE about $11K for this house.

I don't know a thing about Maryland. But I did live on the east coast for a few years and it does get COLD in the winter and pretty hot in the summer. My first thoughts seeing as how this is a 10,000 Sq foot house is that the heating and AC bills could be huge. That is a BIG house. Likewise, its a LOT of house to maintain and take care of, which due to aforementioned weather in that part of the country means probably all the time maintenance. Anyway, looks like a nice one.

I used to live a few blocks from that house, specifically near Summit & Diamond near the train station in downtown Gaithersburg.

It's huge. What's the property taxes on it?

Way, way too big for a DINK.

Notwithstanding that 75% of the Sq ft are useless as you will spend 90% of the time in the same 1000 sq ft, I can't imagine how I will feel sleeping at night when the spouse have to travel overnight for business.

We have been looking at buying a property as well (we are 3 adults and 1 child) and anything north of 3000 sqft (basement not included) looks very big to us (in terms of general maintenance etc.). But then we live in New England which gets more cold in the winters. Also your comment about "don't love it" bothers me a little bit.

10k sq ft. is what professional athletes would buy unless you plan to rent out a few rooms. Just my 2 cents.

Well...lemme put it this way.

Both me and my wife like big houses. Always have, always will. Sure, we'll probably not use the space 100%, but we entertain a fair bit (we have a huge family within a 15 mile radius of DC), and having some space is something we have always wanted. Does that translate into 10K sqft? Probably not. But, we don't like the 2500-3000 sqft houses (not including basement). We just don't. That's us.

Having said that, obviously, maintenance is higher on a bigger house. We're prepared for that. Living in a big house has lots of intangibles that can't be equated with money, and if that means more expenses towards maintenance, so be it.

In addition, I'll be using some of the space in the basement for my business, and stop renting a small warehouse that I currently rent, so that will offset it a bit. I'm also VERY VERY handy, so a fair bit of the maintenance is something I can handle myself. The bigger items, well, they will cost what they will cost.

So, the more important question is not that the house is too big, the question is, is this particular house priced "right"? There will probably be others like it, and I want to make sure we have a "baseline" on which to make a decision.

As a reference, we're already pre-approved (in writing, but I have banked with them for the last 18 years) by our bank for up to $1.8M at 4.6% (30 yr fixed, 0 points). I want to move on something quickly if the opportunity comes along.

No offense, but there's a difference between big and absolutely freakin' HUGE. This thing is double the size of your typical Mcmansion. I can understand liking a bigger house. But this to me seems just a tad on the TOO BIG side. One last thing... If you plan on living in this forever and ever... what will the implications be once you get older? A giant house can suddenly become pretty problematic. I know because my Grandmother owns a " piddly" 3,500 sq foot house and she can barely manage the place and has numbers of people that she has to pay to do so.

But either way it sounds like you're pretty much sold on this one so good luck, enjoy it, and when you're done invite us all over for racquetball inside some of your spare rooms.

edvard2 says

But either way it sounds like you're pretty much sold on this one so good luck, enjoy it, and when you're done invite us all over for racquetball inside some of your spare rooms.

Lemme stress it again - I'm NOT sold on this one. However, I'm seeing it and seeing "some" value in it. And that's the issue. Am I reading the numbers right or not?

Value is subjective on what's important to you. As for me I personally care more about a big yard and a garage versus a house. I grew up on 14 acres in a 2,000 Sq foot house. We had plenty of friends with far bigger houses but then again they lived in cookie-cutter subdivisions with small yards.

It almost sounds like you need to quantify what the value is to you, what the advantage would be of having that much space, and how it would benefit you. Perhaps another thing to think about it perhaps the reason the house is seemingly cheaper is because of how big the thing is. I'd say most families just want your typical 2,500-4,000 Sq foot, 2-3 bedroom house. A 6 Bedroom 10,000 foor house? I guess a good analogy might be campers. For example, you can find HUGE 30-40 footer campers all day long for not a lot of money used. On the other hand small and medium sized campers are actually more in some cases simply because in that case you can get away hauling it with the family SUV versus having to go out and buy a F-350 dually with 6.0 cummins diesel to haul it.

But in the end its your choice. If you like it, it has value for you and your wife.... then buy it.

kapone says

"That kind of money"....i.e. 650K is actually the norm in the DC area for this much house. :)

Yeah, I'm aware. I just meant that personally I would sacrifice the house size (which for me would be extremely excessive) to live in a more moderate house in one of the "W School" zones (Whitman, Wooton, Walter, Winston, etc.)

Still, agree that seems like a very good price for a house of that size.

kapone says

So, the more important question is not that the house is too big, the question is, is this particular house priced "right"? There will probably be others like it, and I want to make sure we have a "baseline" on which to make a decision.

Welp! There it is, then if there's any reservations about or questions as to if this is the baseline or the bottom. Then I would not buy this house. I pulled the trigger last year, on a 2100 sqft place, with plenty of extras. That are, like you said, intangible reasons, that don't equate to value. I'm not concerned about how much further the price will drop. But then again I bought a house, that could possibly have 10's of thousands, and not 100's thousands of potential depreciation.
A house between 100K to 175K is an easier decision, than a house worth anything over 300K.

But if you finances afford this place, and you wouldn't have to sweat making the payments now or 30 years down the road.
Then really, how much is getting back on with your life worth to you? There comes a point, where our lives are on hold, and our happiness is being held hostage by the Idiots in Washington and the Boardrooms across the country.

There's other bottom lines you could be watching, than your wallet. It could be in 5 or 10 years from now people may look back and kick them selves for even playing along with this nonsense.

Like living in a rental or any place for one month longer than was necessary because we were afraid to lose a few imaginary dollars in the short term. But reserve this logic, for those that would like a house to nest in, for the long term. And not an asset, to hedge against an uncertain future. People tend to want a house with an emergency rip cord. Where if their Job goes South or any reason at all, they want be able to sell it, even in less time than a year. And expect to have made a profit. And then of course there's even those still that could live in a bathroom stall for all they care, they want a house for an "INVESTMENT" with a appreciating WOW trend line.

$103 a square foot? There are properties in Van Nuys, California (A lesser desirable section of the San Fernando Valley section of Los Angeles) that are triple that. The lowest price per square foot in Van Nuys is $96. Still sticking with if you love it, can afford it, and it fits your needs whatever they are, just be prepared there is the possiblity the value could drop some.

kapone, it looks like you knew and prepared for what's comming w/ bigger house. The house look nice and the price is, I'd say, alright. However, I do have few questions for you.

I think I heard you're commuting to DC, and adding few miles to that is the last thing I would do. 270 is scenic but I never liked staying on that in rush hours, and counting dead deers on the road is not fun. So, why you're buying a house even further away from your work? I see a metro station there, so are you going to take metro instead of driving?

Those houses arround it are on flag rot. And the house is facing toward them. I do see a drive way connected to the other house south to it. So, it seems like you have to share your drive way with neighbors, and the privacy can be an issue. Is it alright for you?

Lots of tree means lots of falling leaves. That also means, gutter clogging, wild life such as small snake and roddent. Watching a guy putting leaves in 30gal bag, and that's 20th bag, is like... wow. Do you mind doing it yourself or paying someone to do it?

And, you got two local airports near the location. Are you ok with that?

Yes to all of the above. :)

I don't drive to DC even now, I take the metro. This house will actually be closer to the metro than where we are right now.

kapone,

Let me point out the obvious, if you post a house on a housing crash site, 80%+ of the readers are going to tell you not to buy it.

I'm in the 20%. I wish with all my heart there was something like that in the SF peninsula for that price :)

I'm happy for you too kapone and wish to thank you also because I need to wait if I want to buy in this area. I am not paying $200 a square foot for crap.

Then, good enough. Just keep check so that you can find better house at better location at better price.

Since the commuting is my priority, living within walking distance to express bus/metro to pentagon is a must to us. That kept my search in fairfax and arlington county. Home near blue line and yellow line in Virginia is what we've been looking for, never really thought about red, green and orange line in Maryland. I am going to think about expanding our search bit further too. It may work for us as long as the metro line is there.

kapone says

Yes to all of the above. :)
I don't drive to DC even now, I take the metro. This house will actually be closer to the metro than where we are right now.

I have never met a person that takes Metro to work regularly, then comes home to a 10K square feet house. That is quite unique to say the least.

SFace says

kapone says

Yes to all of the above. :)

I don't drive to DC even now, I take the metro. This house will actually be closer to the metro than where we are right now.

I have never met a person that takes Metro to work regularly, then comes home to a 10K square feet house. That is quite unique to say the least.

work hard, play hard

Have you seen DC traffic?? :) There's no point in driving, unless I leave home at 6:00AM and leave work at either 3:00PM or 7:30PM.

And I drive a BMW 740i...that thing's not the best commuter car as such.

In defense of extra bedrooms: In the toughest of times you can rent them out to help you hang on to the house.

SFace, this is DC. :)
You're going to see lots of people doing that here in DC area. Hit the road before 6 in the morning or take metro an hour ahead. Or, be late.

kapone, I talked about the idea of extending home search further along w/ red line over dinner, and she said two words. "No way". Too bad.