I hope you enjoyed Cindy’s article about Living In The Sandwich Generation last time. Actually, I don’t think it is a necessarily a bad thing. We should strive help our parents and kids in whatever way we can. Helping each other builds a tighter family bond and shows the younger generation a good example. Through most of human history, each generation helped the one before and after it. The modern independent retirement is nice, but it might not be possible for many families.
For Asian families, the idea of helping the older generation is second nature. We were raised in a culture with a strong sense of filial duty (responsibility for parents). My parents aren’t well off and they worked hard to put us through college. They have some savings and they live a frugal lifestyle in Thailand, but they will run out of money at some point. My dad is still working a bit to make some money, but my mom hasn’t worked for quite a while now.
That’s why I want to combine households by having my mom to come live with us. I really need some help with RB40 Jr. and I’ll be able to keep an eye on my mom at the same time. She’ll live with us part time and go back and forth between our place, my brother’s, and Thailand.
Of course, there will be some adjustments, but she stayed with us over an extended period before, so hopefully it won’t be a difficult transition. The major change is the need for a bigger home. We live in a 1,000 sq ft, 2 bedroom condo and that’s not enough space for 4 people now that Jr. is 3 years old. We like living in a smaller home and probably wouldn’t get a huge house.
Moving would be hard because Mrs. RB40 really loves our current home and its location. She hates moving, and she only agreed to move to our current place believing that it would be truly permanent. (Is anything really ever permanent?) We got a one bedroom condo nearby which I thought my mom could live in, but that’s not going to work out (a whole other story…) Anyway, I’m going to share our options and perhaps you can help us decide.
A Single Family Home
The first option is to find a single family home that would work for our family. We’ll need a 3 beds/2 bath home with at least 1,500 square feet. Our preferred location is also quite expensive and we’d be lucky to get in at $450,000. Most 3 beds/2 bath homes I’ve seen are around 2,000 sq ft so it’s going to be difficult to find a smaller home.
Now, the good news. If we sell all our properties, we’d be able to pay cash for a house! It would be great to not have a mortgage anymore. Mortgages aren’t bad debt, but no debt at all would be awesome.
Our monthly expense would drop quite a bit if we own a house outright. Currently, we are also paying $470/month for HOA and we’d be rid of that as well. Even with property tax and higher utilities, we’ll probably come in way under $1,000/month for housing. That would be a nice reduction from $2,200 we are paying now and it would improve our monthly cash flow by quite a bit.
Mrs. RB40 prefers a single family home because she doesn’t want to deal with renters anymore.
A Multifamily Home
On the other hand, I prefer an owner occupied triplex in the same area. We’d probably have to raise our budget to around $750,000 and get a mortgage for the property.
Ideally, we’d have a 2 bedroom unit to live in and two 1 bedroom units to rent out. My mom can stay in one of the 1 bedroom units when she’s here with us. When she’s not here, we can rent it out short term via Airbnb or other similar sites.
The upside is we’d have renters to help pay our mortgage. I’ll be on the premises so it will be easy to deal with issues as they come up. The downside is we’d have shared walls. I’d have to be extremely careful about tenant selection as well since we’ll be living under the same roof.
Here is a triplex that I like. This one just sold for $640,000 according to Zillow. There are two 2 bedroom units and one 1 bedroom unit. The location is perfect too. Hopefully we can find something similar when we’re ready to buy.
One compromise would be a single family home with a mother-in-law suite. This type of home is quite rare in our area and I have only seen a few listings on Zillow. We’ll let our real estate agent know that we’d consider this option as well.
From what I hear, Portland is quite a seller’s market right now. Homes are sold quickly and bidding has become the norm. We are not in a huge hurry so I think we’ll sell the rental properties this year and start a search for the perfect home. I don’t mind taking it slow. Our condo’s value is still recovering because there were a lot of short sales in the building over the past few years. I think in a year or so, we’d be able to get a good price on our current residence. The new public transit line nearby should be done next year and give a little boost to our property value.
For Mrs. RB40’s sake, this move will have to be it for a long time. We’d like to stay in the area until RB40 Jr. finishes high school. That’s 15 years, though, so who knows what’s going to happen in the mean time. I would be open to pretty much anything after that. Maybe a year long around the word trip, then live in other countries for a while. We’ll see how the missus feels at 55.
Anyway, I think 1,500 to 2,000 sq ft would be perfect for 4 people. What do you think? Do you think we need a bigger home? What’s your ideal home size?
For 2018, Joe plans to diversify his passive income by investing in US heartland real estate through RealtyShares. He has 3 rental units in Portland and he believes the local market is getting overpriced.
Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help every investor analyze their portfolio and plan for retirement.
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