I hate having to adult

[wickedcherub]

This is a large brain dump of all the things I need to work out to make some big adult decisions.



It kind of occurred to me that I've never really had to make real adult decisions before. All my major life decisions had an undertone of 'avoidance' in them - I rushed into marriage to move out of home, I had babies to avoid going to uni, and all of these decisions have been wonderful but this is my first real decision I have to make. And I just want to throw up and run away. I've been procrastinating with the idea that it's future decisions and well, the future is now.

Okay so here is the situation.

1. We live in a tiny house where I pay $260pw mortgage.
2. We have approximately $150k equity in this house.
3. This house once had termites and we want to be rid of it.
4. We live a fair way from the city centre, like I leave the house at 6:10am to start work at 8:00am.
5. I currently take home $800 per week after tax. This will continue until at least march 2017 but probably further.
6. Adam is a stay at home father, at uni, he will graduate end of 2016.
7. Liam starts school in 2016.
8. Adam has a lucrative casual job but we won't know how often he can work it until February.
9. The government also gives me $240 a week to help raise my kids because Adam doesn't work.

Okay. So we want to move. We want to move because

1. We have outgrown this house.
2. Adam will get a job in the city after he graduates so we need to move further in.
3. Termites.
4. To move to a better school zone.

We cannot move because

1. Our house needs a few things finished before it is sell ready and Adam doesn't have time this very minute to do it.
2. I haven't been to a bank yet but I doubt they will give me a loan on the basis that I'm a single income with kids and even if they did I'm not positive I could service the loan.

So I came up with a plan.

I want to move this year, so we can enrol Liam in a decent school. I don't want to switch schools on him, on top of moving. He would not handle that well.

I researched schools in Melbourne and the best primary public schools are in Glen Waverley.

Glen Waverley:
1. 30 min from city, 40 min on train.
2. 15 min from Adam's uni, as opposed to the 45min it is now.
3. 15 min from my parents, who are likely to look after my kids after school.
4. Chock full of good schools, amazing food, near a lake, beautiful tree area.
5. Houses are 1.2 million dollars.

Okay so my plan is to sell our house and rent in Glen Waverley for a year. Rent is approximately $400 per week for an old three bedroom house. That's $140 more than what we pay now.

Then when Adam starts work and we are dual income, we can buy in the next suburb over, Mulgrave, for 600k and still have Liam go to those schools.

Sticking points with the plan that I need to sort out.

1. If I sell the house and just put our equity in a term deposit for a year I'm not sure if the government will stop giving us payment.
2. Enrolment in schools starts fairly early 2015 and I don't know whether I can enrol in a school when I don't actually live there yet.
3. I don't know if that extra $140 per week is beyond my means until I redo the budget.

Adam hates the plan. He wants to live close to the beach. I can't find an affordable suburb near the beach that is not far away from the city or with good schools. He thinks the housing bubble will burst but the houses on the coast will hold their prices. He feels uncomfortable in land. Glen Waverley is approximately half an hour from the beach.

I'm uncomfortable with leaving the housing market.

I don't even know. It's doing my head in. I've got other things to consider too but I'm running out of battery.

Comments

[sarahlouise.livejournal.com]

I'm the worst at making decisions but sometimes I do try to break it down. Like, it seems clear you do need to leave the current house, so you can leave that out of the question and look at what the options are for what you can move to. Can you afford to rent the current house out, rather than selling it? I would have thought the rent would more than cover that mortgage. But I don't know what that would mean for your payments. Also you'd have to be careful of capital gains tax etc if you move out for too long.

I have been thinking about similar things (as you know) and I have reached the tentative conclusion that if you are going to be out of the housing market, this is probably a decent time to do it. I could be wrong but I feel like it will only bump along for a few years, you have already got the big gains so you shouldn't miss out on those. I mean, who knows, but I'd hope not.

Personally I'd get some financial advice before selling the house. I didn't get any before selling my Elwood apartment and in retrospect it was a mistake. They can be surprisingly helpful.

What about that stretch from Mordialloc to Cheltenham? Or around Moorabbin or McKinnon? that's inland but closer to the beach than glen waverley and seems to still have schools in the top 20 or so of state schools. But you've probably already considered those. You went to Kilvington right, so you must know that area without me telling you! I do really like mordialloc these days, but it isn't a heap closer in than where you are now.

the only other thing is I have some friends trying to buy around Glen Waverley at the moment and according to them that is the area where the market has gone nuts with overseas buyers who are willing to pay huge sums and that kind of thing. For some reason it's particularly around there. So I'd go to some actual auctions if I were you just to see what's happening in reality, because they are telling me that basic houses are selling for 100,000s over the reserve.

It's really tough, I keep struggling with it too because moving and selling and whatever is such an upheaval. In my case I keep swivelling between what I want and reality/$$$. It's especially hard in your case when you are trying to anticipate what will be two years down the track. I think in theory I'd probably get some financial advice - like from a buyer's advocate type person - and then just try to make the right decision for now, because you have no hope of predicting the future really. Ugh. Anyway. Good luck.

[wickedcherub.livejournal.com]

Houses in those areas are hopelessly expensive too. Like, Edithvale is the most affordable and it's seriously only fifteen min on the train line closer. Those suburbs you mentioned are well into the 8-9 hundreds. How much was your place if you don't mind me asking?

[sarahlouise.livejournal.com]

:( I think I'm out of touch as I bought here before things went really nuts. I was going to say Bentleigh East but I think even that has rocketed (which I don't understand, I don't like it there at all. Not that I'm saying you should live in a yucky place. But it is close to decent schools, which is probably why everyone else is there too). Is even Moorabbin crazy? When I was looking I looked at a lot of places in Moorabbin as it was quite reasonable then. Hampton east was too (not hampton itself, it's on the other side of south road). But it has no train station and I never liked the feel of it so I think there's a reason it's cheaper. You would know better than me how things are currently though :(

Yeah agree that edithvale wouldn't be a good choice for you. Not if being closer is your goal. It's lovely in other ways.

My place was 620k when I bought it. It's only two bedrooms, so too small for you, although it would be very easy to convert the dining room into a bedroom or (less easy) build up. I mean, the space is there to build up but that's a big undertaking. When I was thinking of selling it last year they quoted me 770k though so I think even this area has gone up.

It is really shitty. I think it's much harder when you're looking for a family home. I could get on the ladder because I could do crappy apartment then small house. My friends i mentioned have 3 year old twins so they're similar to you and they are finding all the places out of their budget. And they're looking in places like burwood that I didn't think were particularly posh. and both work full time.

[wickedcherub.livejournal.com]

Yeah I think that if we both work full time we would earn maybe 100-120 between us to start. I think that would get us a 600k house. Does that sound right, haha is that how much you earn lol? That mortgage isn't much these days, I think maybe I can start looking at Springvale, it's not beautiful but I grew up there and I do love it. I wonder if I can still send Liam to the Glen Waverley primary schools though if we rented there first. With high school I think we'd go the non government route anyway so I'm not fussed about high schools as yet.

[sarahlouise.livejournal.com]

I think that would get you a 600k house, yes. Especially if you have equity already. I earn about 160k, but when I bought this house I probably earned 130k. But I would be approved for much more if I wanted to take it on (I don't. My current mortgage makes me feel ill sometimes!) I'm positive you are better at living frugally than I ma though, so I would like your chances of pulling it off better than mine.

What about oakleigh? That's maybe a bit more pretty than springvale. Worth a look. Yeah I think if you were renting in the area he'd get into the school, I don't think they care what you do afterwards as long as you're in zone to start with. Where I used to live was in the zone for elwood primary, which seems to be very popular, and we had a lot of families rent in my block for ayear then move, presumably to get the kids into the school.

[wickedcherub.livejournal.com]

Yes we are good at living frugally, at least I think we don't eat fancy things, I think you can spend lots of money eating out and eating really lovely food and so you can save a lot eating more basic food or shopping at markets. And you know, packing lunch for work. So I think it's more habit than effort, really. I'm always so surprised by peoples wages, I think wages in general seem to have gone up a lot in the past five years? Like most of my friends are into 6 figures like yourself and I never would have dreamed it.

[sarahlouise.livejournal.com]

Yes. I think that's where lots of my money goes. And on convenience. Not convenience food. But like, oh I'll just get a cab instead of waiting 20 minutes for the train. I should shop at markets. I actually enoy that anyway. I got in a really good run of packing lunch but this year have been bad.

I think they went up a lot a few years ago and then have stalled in the last year or so. I got a promotion which is the only reason mine went up, we have a wage freeze this year otherwise :( But I do agree that 100k isn't what it was, like it used to be this amazingly high salary and I don't thin kit is now.

[wickedcherub.livejournal.com]

And I almost died, looking at the trend graphs on real estate dot com like, houses in so many places have gone up 200k in the past 5 years and in Frankston they've gone up 50k and it makes me so upset

[sarahlouise.livejournal.com]

Ugh, yeah, that's really annoying. That's why Iget annoyed at people who are older and tell you to start out in caroline springs or something and trade up. I think that's really old fashioned advice. Doesn't work anymore as yuo stay priced out of the inner suburbs.

[wickedcherub.livejournal.com]

I haven't felt like this since I got my 96 enter score and realised I couldn't just do whatever I wanted :(

[sarahlouise.livejournal.com]

ah you're too hard on yourself. 96 is an excellent score. People would kill for that!

[wickedcherub.livejournal.com]

Haha I know but it's just the way, isn't it. You have a decent wage, but you can't just do whatever you want, you still have to live within your means in an area you can afford. Like I think even if you were a millionaire you'd feel you'd have limitations.

[sarahlouise.livejournal.com]

haha yees, exactly. I feel hard done by because I can't afford elwood. Even though I can if I got an apartment. And my salary is good. But it takes two of my salary to buy a nice house there!

[science-of-life.livejournal.com]

We are currently paying $2100 a month on a $397k mortgage locked in at 4.86% for 3 years... I'm sure, though, you have looked at mortgage repayment calculators etc and know how much you'd be up for.

If I were you, I'd probably do the renting thing first. If you end up totally hating the area at least you haven't bought there...

[tacomonkey.livejournal.com]

We rent in Glen Waverley! It's a really lovely area. Hamish goes to Mount View, which is just down the road, and it's an amazing school. Once you're in you're in, but it's pretty high demand, so I don't know that sibling preference would be enough to get Toby in too if you moved away? You'd have to call and ask I guess.

We pay.. $2325 per calendar month for a house big enough to fit four adults and three children. It's older, but huge and quite lovely, plus it doesn't matter if things break cos the joy of renting is someone else pays to fix it!

I hope Adam is right and the housing bubble does burst so we can afford to buy here, but I think our plan might be to buy something further out once the kids are older.

Wow

[frozen-doll.livejournal.com]

Wow, I've been away too long...Liam is starting school next year? Crazy.

Oh, as far as beach goes...we live in rosebud...very very affordable, but quite a far way away from the city!!

[suze2000.livejournal.com]

I have little to add, except to suggest maybe consider renting out the home you own and rent in the area you want to try out. That way if things don't go your way, you still have your one asset). BUT keep in mind that moving house these days is expensive in itself.

And I wouldn't rely on any housing bubble burst because while there may BE a bubble, prices aren't going to drop more then ten percent because the fundamentals (scarcity of land, massive population growth beyond what we are building to accommodate it) that support house prices are always going to be there. I agree though that buying in Caroline Springs might get you a nice house, but it's not going to get you much capital growth. This has happened once before recently and the drop was not that substantial; 8-10% at most. I don't believe that waiting for a bubble burst is a valid real estate strategy. I DO agree that it's a big pyramid scheme though!

We bought this year and it was horrible and disheartening and we ended up going $100K over what I had decided was our budget and buying in a worse suburb than I wanted, just because we couldn't find what we wanted closer in. No big, we love our house now and we don't live in a bad area, by any means. Please keep in mind that the advertised price ranges will be under the actual reserve by $100K or 20%, whichever is higher, usually. Though there are exceptions B and C grade properties, ones that are not well-presented for sale might see less of a disparity. But all the auctions I attended this year (including our own) bear that out. So if you are looking at a 600K budget, you need to start looking at houses advertised at 500K (at least, those up for auction). Have you considered a small regional city such as Warrnambool? It's lovely there, if you have a good wind-jacket in winter! :)

Just a note about schools: I know little about the subject, but keep in mind that other parents will be clamouring to get their kids into the same public schools that you have picked out, and this will in turn drive up the cost of housing.

[natatree.livejournal.com]

I hate making decisions, i'm so bad at them.
When I moved from Sydney to Melbourne, 3 months ago, I moved to Mulgrave and I REALLY like it here. I rent, but it's a 3 bedroom home, with 2 car garage and HUGE backyard, for $1582 a month. It doesn't have air con though. I don't drive at all, and public transport to and from the city is great.