Upgrading strategies and advice?
This is a cross-post on the buying/selling forum.
Some recent posts here, including several from Dave, have got me thinking about what HAD been a back-burner issue for me Â and a front burner issue for my wife Â the eventual upgrade of the family house, which I would like to do in about 3 to 5 years, and my wife would like to do now. Given the spiraling house prices in my community, we need to come up with a workable plan if we are gonna make this happen.
The plan IÂve been following so far more or less consists of two components Â a small, lower priced house enabling us to carry a shorter-term mortgage (15 yr) to minimize interest payments and maximize principal payments, and buying houses that are grossly outdated and using DIY sweat equity to make improvements with an eye on selling the house once itÂs in Âturn-keyÂ condition. Around these parts, houses that require no work sell for top dollar in almost no time, whereas the out-of-date houses tend to sit around.
One thing IÂve thought about doing is making additional payments to the principal of the mortgage. IÂve also considered liquidating my 457 deferred compensation plan. We are in a low tax bracket, so if we were to liquidate over several years, we wouldnÂt take a huge tax hit. I donÂt really like this option that much, but my wife is really pushing it (she's eager to get a larger house).
The other thing I've been kicking around is trying to find someone it town who would like to downgrade their home (perhaps for retirement), and working out some sort of "house for house+cash" swap. I don't really know the feasibility of such possibility, I'm just trying to brainstorm ideas.
Please share your advice/recommendations/experiences/number crunching that you all have had at making headway toward this goal. Thankx !!