The Value Of Real Estate Goes Way Up Once You Have Children

Real estate is my favorite asset class to build wealth for the average person. If you have children, then the value of real estate goes up even further!

In the debate between real estate or stocks as a way to get rich and live happily ever after, I failed to emphasize one critical point. The value of real estate goes way up once you have children. The more children you have, the higher the value of your real estate goes.

After scanning more than 200 hundred comments that debated between stocks and real estate, I realized something interesting.

Those who choose stocks over real state tend not to have children. Real estate naysayers either don't have children or have adult children who have left the nest.

This inferior view of real estate as a way to build wealth from people without children makes complete sense. Let's discuss.

The Value Of Real Estate Before Kids

When you don't have kids, you're mainly focused on improving the quality of your life. You are selfish, in a good way! The value you place on real estate before having kids isn't high.

Here are some attributes you may value most as a childless individual:

  • Building wealth – You've gone to school forever and are focused on making your education worth it by doing anything and everything possible.
  • Climbing the corporate ladder – You're looking for a company you can call home for several years.
  • Mobility – You're open to going where the opportunities are and don't want to be wedded to one place.
  • Flexibility – You're dating, traveling, and always on the lookout for new opportunities.
  • Freedom – Nothing beats the feeling of freedom once you taste it after graduating or after the kids have left the house.

Given these desired attributes when you don't have kids, owning lots of real estate isn't ideal. Real estate feels like an anchor when all you want to do is be on the go.

Therefore, it is clear that owning stocks is preferred over real estate. No matter where you go, stocks are hassle-free. The only thing you have to deal with is stock volatility.

The Value Of Real Estate Before Kids For Me

Before 2003, I only owned stocks because I was completely unsure about my career prospects in New York City and San Francisco. I also didn't have enough money to comfortably come up with a down payment without asking my parents for help.

After only two years in NYC, I wasn't offered a third-year analyst position at my firm. Luckily, I was able to land a new job as an Associate with a competing firm in San Francisco before my two years was up.

If I found a way to leverage up and buy NYC real estate, I probably would have rejected the great role I was offered in San Francisco. Perhaps I could have made things work by finding a property manager. However, leaving a property right after you buy it isn't ideal.

In my 20s, my primary focus was on finding a great firm that enabled me to climb the ranks. I loved real estate as a way to build wealth, but I felt that finding a seat at a good firm was by far a bigger wealth driver.

The Desire To Buy

After two years at my new firm, I started feeling like I belonged. Getting laid off wasn't a worry anymore as we slowly rebounded from the 2000 dotcom collapse. Then, one extraordinary weekend in 2003 made me want to live in San Francisco for the next 10+ years.

It was raining heavily on a Friday in January, which meant that it was snowing in Lake Tahoe three hours away. My girlfriend and I decided to take a day trip to Sugar Bowl on Saturday to ride the two feet of powder. We had a blast!

The very next day in San Francisco I found myself playing tennis in 74-degree weather. That was the moment where I thought the west coast was indeed the best coast. I had lived on the east coast for 10 years prior and never had this type of wonderful life moment.

In June 2003, I bought my first property. It was a 1,000 sqft, two-bedroom, two-bathroom condo overlooking the park. It felt great to turn some of the funny money stock gains into a real asset. Before buying, my girlfriend and I lived in a run down one-bedroom apartment.

Once you've found a firm who respects you and a city you love, your desire to own real estate goes way up. You no longer have the great desire to keep looking for something better. It's much the same once you've found your life partner.

The Value Of Real Estate After Kids

Once you have kids, your attitude about money and life should change. Instead of only focusing on how you can improve your life, you become much more focused on providing for your children. Therefore, the value you place on real estate is much higher.

For example, after having kids, you are likely less willing to work 60+ hours a week to get paid and promoted. Your response time for weekend e-mails goes way down. Happy hours over eating dinner with your kids? Nah. The opportunity cost of missing out on your children's lives simply becomes too great because they are growing up so fast.

Here are some attributes you may value once you have children:

  • Stability and consistency – Children thrive on routine.
  • Community – Having a wonderful support network is great. Imagine having neighbors you can text while you are away to pick up a package left at your front door. Or imagine having neighbors with older age children who can babysit while you go out for a date night.
  • Safety – You might have been willing to sacrifice your safety for a cheaper apartment when you didn't have kids. But once you have kids, living in a safe environment is non-negotiable.
  • Schools – School is to children as work is to adults. Real estate in a great public school district or near highly-ranked private schools is more valuable than real estate that isn't.
  • Being a provider – As a parent, your main driver is to be the best provider possible for your family. It's the reason why there's the saying, “Have children and the money will come.” You will feel much more satisfied owning a house your spouse and children enjoy every day than owning stocks.

To Be A Parent Is To Be Selfless

The day you become a mother or father, life is no longer about you. Almost everything you do is about making sure your kids survive and grow up to be well-adjusted adults long after you're gone.

Before you eat, you must ensure there's enough food for your children first. Before you get to enjoy some free time, you must ensure your children have already had enough time playing with you. Instead of watching what you want on TV, you may have to give into watching cartoons instead.

Obviously, some parents handle being selfless for their children better than others. After a lifetime of being selfish for yourself, it's often hard to make such a big change. Children can easily make a bad marriage worse. Beware!

However, being selfless for your children usually feels amazing when they are young and still appreciative. When you finally buy a property for your family, you will feel a wonderful sense of accomplishment. All that hard work to save for them paid off.

More Children, More Value In Real Estate

The more children you have, the more valuable your real estate becomes because it is providing that much more utility.

If there are only two of you living in a five-bedroom, three-bathroom house, you may feel like your house is a waste. This is why so many empty nesters downsize once their children leave.

However, if the five-bedroom house is sheltering two adults and three children, the house is providing much more value. Therefore, its value goes up.

In a pandemic, larger homes have become more valuable because more people are working from home. A room for each child and an office room for each spouse has become a popular demand.

Finally, you may find that more children will make you more confident in paying more for a larger home. No longer do you just see the price tag. You start dividing the price of the home by the number of heartbeats to find its true value.

Real Estate After Kids For Me

When we brought our son home from the hospital one evening, the value of our cozy home shot way up. The roof not only protected my wife and I, but also the most precious little human.

What's great is that our housing cost stayed the same, even though it was providing utility to one more person. The same cannot be said if you want to add a tenant to your lease. It may either be impossible or the landlord may end up charging you more per month.

The emotion I had after I brought home our son was so strong that I decided I would keep the house, even if we decided to get a new house later on. I wanted him to have the same home throughout most of his childhood.

I moved around every 2-4 years until I was 14. Before I graduated from college, my parents sold the high school townhouse I grew up in. Therefore, I never had a consistent childhood home to go back to. As parents, I think we tend to want to give our children what we didn't have.

Although my son's first home became a rental after 2.5 years, the downstairs portion where he had his bedroom is still free. I've left the downstairs area empty as a place for work and our long-term guests. It's also a place I regularly take him to for some father-son time in the hot tub.

From the third day of my son's life onward, real estate has provided shelter for my son and passive income for our family. In contrast, stocks have only provided dividend income and a couple mini-heart attacks given the volatility. Therefore, I feel a greater sense of appreciation for real estate.

Real Estate As A Business And Insurance Policy

The final reason why real estate values go way up once you have children is because a real estate portfolio also acts as an insurance policy for your children.

Just in case your children get rejected from their target school and can't get a job they want to do, managing a real estate portfolio gives your children something meaningful to do.

If your children grew up in some of the rental properties, there will be a stronger affinity for managing the portfolio. Your children will care more because the real estate has been a part of their lives for so long.

Ask yourself how much an insurance policy is worth to prevent your children from ending up directionless, depressed, and struggling to make ends meet. Maybe $100,000? Or maybe more than $1 million each because our children's happiness is priceless.

While you wait for your children to become adults, you can use your rental properties to build passive income. Further, if you can buy these properties before they are born or while they are still very young, the value of your rental properties will likely be higher by the time your children are adults.

Real Estate: The Preferred Asset Class For Parents

To recap, real estate increases in value once you have children because it:

  • Helps boost wealth and generate income to afford children
  • Will shelter your children until they leave for college
  • May give your children purpose after they graduate
  • Provides shelter for your adult children if needed
  • Builds wealth for your children if the real estate is passed down

I still enjoy owning stocks. However, for immediate utility, real estate cannot be beat. Therefore, real estate takes up roughly 40% of my net worth and stocks take up only 25% of my net worth.

Given the value of real estate goes up after having children, as a real estate investor, it's worth paying attention to birth rates by city, county, state, and country. The higher the birth rates, the greater the desire for real estate.

Real Estate Investing Suggestions

Once you've purchased your primary residence you are considered neutral real estate. Since you have to live somewhere, you will simply ride the real estate cycle. To be long real estate you must own investment property in addition to your primary resident.

If you're interested in a hands off approach to real estate investing, consider investing in a publicly traded REIT or in real estate crowdfunding. Once I had my son in 2017, I decided to sell my PITA rental house and reinvest $550,000 of the proceeds into real estate crowdfunding. My favorite two real estate crowdfunding platforms are:

Fundrise: A way for accredited and non-accredited investors to diversify into real estate through private eFunds. Fundrise has been around since 2012 and has consistently generated steady returns, no matter what the stock market is doing.

CrowdStreet: A way for accredited investors to invest in individual real estate opportunities mostly in 18-hour cities. 18-hour cities are secondary cities with lower valuations, higher rental yields, and potentially higher growth due to job growth and demographic trends.

Both platforms are free to sign up and explore. I've personally invested $810,000 in real estate crowdfunding to earn income 100% passively.

Readers, do you believe the value of real estate goes way up once you have children? What other asset provides so many benefits to a person? What asset is even more valuable than real estate once you become a parent?

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44 thoughts on “The Value Of Real Estate Goes Way Up Once You Have Children”

  1. hey Sam. Hoping you can shed some light as you’ve always been a strong fan of real estate. What do you make of all this deflation talk? The idea that tech is evolving so fast that it is pushing the cost of living lower, but the fed are pumping money in to counter it out for inflation. However there’s only so much the fed can do before assets go crash… that’s the theory anyway.

    If it happens in 30 years, I get it. But the idea that it could happen within 5 seems far fetched to me. I just want to buy real estate with confidence!

    Thanks for your great articles and increasing your output. I read all of them! Kent, UK.

  2. Julia REinvestor

    We bought a place in May. I’ve always liked real estate, but preparing to have kids made choosing the right neighbourhood really important.

    I do wonder if saving the house someone grew up in would prevent them from being able to rent it to strangers. Better to sell when your kids are adults so they don’t fight over what happens to the family home when you pass on.

  3. Hey Sam. Thanks for explaining the benefits of owning a primary residence after children. We do not have children yet and our portfolio is almost entirely index funds, but the change in perspective after children is something we should have in mind.

    On another note, I’d like to point out there are three separate asset classes we’re talking about here.
    1. Stocks as investments
    2. Real estate as PRIMARY RESIDENCE
    3. Real estate as investments (rental property)

    This post mainly states the benefits of #2. We should not mush together #2 and #3 as their purposes are entirely different.

    Finally, there’s a book called the “Wealthy Renter” by Alex Avery. It clearly outlines the benefits of renting and how many people would be actually better off if they rent than buy. It was an eye-opener for someone trained in the American Dream (which of course contains a white-picket house and a yard). Some of the points in the book were covered in your last post.

    1. Hi Jay,

      Yes, you’re right. I am mainly focused on buying real estate as a primary residence versus renting and only investing in stocks. However, I also have a default assumption where we should buy a primary residence, live in it for a while, and then rent it out after several years. This is the easiest and my favorite way to build a rental property portfolio and passive income.

      I do touch upon real estate as investments in the last two sections. I can add more about rental properties.

      Real Estate As A Business And Insurance Policy

      The final reason why real estate values go way up once you have children is because a real estate portfolio also acts as an insurance policy for your children.

      Just in case your children get rejected from their target school and can’t get a job they want to do, managing a real estate portfolio gives your children something meaningful to do.

      If your children grew up in some of the rental properties, there will be a stronger affinity for managing the portfolio. Your children will care more because the real estate has been a part of their lives for so long.

      Ask yourself how much an insurance policy is worth to prevent your children from ending up directionless, depressed, and struggling to make ends meet. Maybe $100,000? Or maybe more than $1 million each because our children’s happiness is priceless.

      While you wait for your children to become adults, you can use your rental properties to build passive income. Further, if you can buy these properties before they are born or while they are still very young, the value of your rental properties will likely be higher by the time your children are adults.

      1. You also have a great post that describes my real estate strategy: Rent Luxury, Buy Utility. ( ) The 2,000 sqft house I live in (suburb on the DC-MD border) would cost $5,000+ for a mortgage, but I rent it for $3,200. The kids will be up and out in a few years, no need to buy. Instead, I own 6 rental properties, and going for more. They are 1-2 bedroom places, which command a better cashflow than a 3+bedroom house.

        1. This isn’t what this post is about though — it’s about buying in an area where you have your primary residence so you can build community and stability. I see there is an intrinsic value to to that, despite the fact that I’m losing a ton on what I can’t invest right now (unless Bay Area keeps appreciating at 7% a year or more, which I doubt will happen.) Overall the rent luxury, buy utility makes a ton of sense.

        2. Yep! Rent is definitely cheaper in a lot of big cities for the first 2-3 years. But then after that, the equation tends to flip. Hope you are investing your savings accordingly. Cheers

      2. I know you live in Bay Area — how does this work in HCOL area? I purchased 1.65M home, mortgage is 7k a month. Rent for this house is maybe 5k max, probably less. At what point can I buy another home and rent this one out without losing money? My goal is to move to Peninsula but could not afford it yet. It seems selling this house in 2-5 years will = a big loss. But so will renting it. Thoughts?

        1. Not sure what you mean. If you find an area you like and want to build passive income, I’d just buy a new house and rent out the old house every time you can afford to based on the 30/30/3 home buying rule.

          After 20-30 years, you and your family are set.

          In the Bay Area, I’ve found that after you own for 2-3 years, you can become cash flow positive.

          1. Hmm. Ok. Well I broke the 30/30/3 rule already!

            1. Spend no more than 30% of monthly take home on mortgage. Well, our mortgage is 7k. We’re paying 5k of that right now, with FIL paying 2k and living in 30% of the house (the master suite.) So we should be making about 17k gross. Ok, we’re good here. I’m at 175k base and husband is at 90k. So we can do 6000 a month and be ok. The 7000 when my FIL moves out will be bad, but I’m not including bonus or RSU above.

            2. have 30% of home value saved up in cash or liquid assets. Yes, I have this.

            3. limit total household value to 3x income. This is where I am… not good. Total household income (base) is 265. So we should only spend 795k on a house. Except I spent 1.7M (give or take) on a house. I don’t know how in the Bay Area one can do 3x income unless you want to buy in Gilroy or Mountain House or something. Now, next year if my stock holds and I get bonus I’ll hit about 800k family income for the year. But this is a very abnormal year and we’ll be back to 265 or so going forward.

            Also my current place w/ my current 2.65% mortgage (30 year fixed) is 7k a month PITI. I think I could rent it out for 4500 a month maybe. Then I’d have to pay for gardener and fixes and such. So I’d still be losing a lot a month to rent it out, not to mention the cost of buying a new property. So I’m just trying to understand how I am better off keeping this property in 3 years if I move. I’d like to buy something that is 2.5M in 3-5 years, if I happen to get wealthy in 3-5 years, but I always thought I’d sell this home in order to afford that. I don’t see how I’d keep this and rent it out AND buy a home in a better location (same home where I’d like to live would be 2.5M.)

            1. Actually, with rates so low, I do talk about extending the homebuying to up to five times your annual household gross income. Therefore, you’re good to go! But really, please take your time and lower your expectations on home remodeling. Home remodeling has ruined marriages and caused a lot of stress. That’s not what you want with your upcoming birth!

              1. Agreed! I had to fix a wall leak in our master bedroom when we had a 2.5 year old and a 5 month old. Tearing out a wall, rebuilding a fire place, putting in a new vanity, and rerunning electrical around work, and kids sleep schedules doesn’t make for a fun experience. In retrospect I should have had some of my crew knock it out, but for whatever reason I decided to take on the project myself.

                Home remodeling, with young kids is no fun, and certainly does put stress on your relationship. If you must do it, I would try and find a way to get out of dodge and let the contractor go full tilt to get it done ASAP. Go rent a short term house somewhere or stay with a friend if you can. Living around construction is always less than Ideal.

                Come to think of it, my parents had a flood in their house one year. A pipe burst in the wall and leaked overnight. My mom woke up in the morning, and put her feet on the ground in a puddle of water. The upstairs bathroom had flooded the entire house – talking 20 rooms destroyed. It looked really similar to the scene in Home Alone, if you recall the flood scenes. Ironically it was just after they had completed a complete remodel of the existing house and 2 days after throwing a construction is complete party! Life certainly throws curve balls at you. Anyway, they had to move out of the house into a hotel for 8 months while the house was completely striped and rebuilt. They had the option to stay in the house during construction, but forced the insurance company to pay for a extended stay hotel. For those who track points – living in a hotel for 8 months gets you some serious perks. We still get rooms comped for family travel, years after the incident.

                Anyway, get out of dodge and get it done as fast as possible, if you must do it. Especially with the young kids, you don’t want to be around asbestos demolition and some of the other issues you described.

      3. Sam, are u still planning to buy every 3 years or so and move? Wouldnt that contradict the stable home growing up for your children? which do you plan to do now?

        1. Yes it does. But not if you buy in the same neighborhood. I have found a neighborhood which I really love, which I still think is relatively undiscovered. As a result, I will buy as many ocean view properties I can comfortably afford overtime. It won’t be every 3 years b/c I can’t afford to at that pace anymore for the properties I want to buy. But maybe every 5-8 years.

          I’m looking out 30 years into the future, and I know my kids are gonna be like, “dad, good job having the foresight to buy these ocean view properties in San Francisco back then.”

  4. What happens if Biden removes the step up provision on assets like RE? He ran on getting rid of the step up provision and removing the deduction for 401ks for high incomes.

    1. Retired before 50

      It will never happen. Republicans hold the Senate. It has to pass the Senate in order to get to Biden.

      1. Republicans only hold the senate if they win the 2 runoff elections in ga. If not the senate will be 50/50 with the Vice President voting they: raising of the long term capital gains tax to 43%, removal of the deduction for 401ks for higher earners, removal of the step up provisions affecting inherited real estate, and much more
        So what steps do we take Sam to protect against this?!

        1. Retired By 50

          Rich, that is true, but do you really think all the wealthy in office Democrats and their friends will want to shoot themselves in the foot? It all sounds great for the talk to the masses. I don’t see the capital gains going away, if anything probably an increase in amounts allowed as RE Values have increased substantially.

        2. hereverycentcounts

          By the time most of us die who knows who will be in office. If you die in the next four years then you may lose your step up in basis.

    2. I’d be shocked if 401(k) contributions no longer become tax deductible. I doubt that will ever even be pushed forward.

      There is a real risk the estate tax threshold will be lowered from $11.58 million. I’ll write more about that in the future.

      Hope Congress can keep any drastic estate planning laws in check.

      1. Biden’s plan is to limit deduction amount — which to me makes sense — why should my sister making 30k a year get less value out of saving money than I do when I make 500k a year? She is the one who needs to be saving more for retirement–I’ll be fine either way if I’m not stupid. I’ll miss the deduction, sure (37% tax bracket savings is sweet) but really do I deserve 37% off every dollar saved and she gets like 12%?)

        1. The reason people who earn more get a higher deduction is bc you pay higher taxes-60% ($300,000 all in) than your sister who pays no tax using the amounts you use in your example. So getting a larger deduction is only fair.

          1. It isn’t about being “fair” though. The point of 401k is to encourage people to save enough money so they don’t have to rely on the government to eat and put a roof over their heads in retirement (since SS doesn’t even really cover that, esp at lower income levels.) People who make 37% income (which I do currently) would save with or without the tax benefits because we know we want to maintain our standard of living in retirement. Meanwhile, many people who work will be saving less because 401k benefit is so little to them — though they actually need to be saving more. Roth 401k is better if offered but few people understand Roth enough to take advantage of it. Really 401k tax benefits should be flat or across all levels of income or phased out once you hit a certain amount. Or in general there should be a total basic cost of living that tax policy encourages everyone to save and beyond that you don’t get benefits for saving more.

  5. I can relate to so much of what you wrote! You nailed the values of pre vs post kids. Makes so much sense. I also anticipate my values and approach to real estate vs stocks to change somewhat again once my kids are grown and living on their own.

    This crazy pandemic has definitely really increased how much I appreciate my house and being able to own real estate especially with children.

    1. I am currently in panic-I-just-bought-a-house mode and this article made me feel a bit better. I’ve been massively depressed thinking I just made the biggest mistake of my life. I spent 1.65M on a house 30 minutes south of my target area. While I sort of know the area I bought in, it’s 1.5 hr commute in rush hour to work, apparently further from a freeway than I realized, and the house is just old and needs a lot of upgrades. I’m about to put 100k into it up front, then going to try to not touch it for a few years unless things break. I have a 2 year old and another kid on the way… and I know at some point we’ll get to know our neighbors and feel part of the community. As an introvert it’s hard for me… I don’t know anyone who lives nearby and people seem to come and go (so many houses on my block were sold in last 2 years) so I wonder if we’ll really be able to build that community here. Plus covid (and being an introvert) makes it extra hard. But maybe one day I’ll see the value in buying. I do like having a yard.

      1. 1.5 hours one way? Where are you living and where is your work? Hope you can work from home forever.

        It MIGHT take 1.5 hours to drive to San Jose from SF in rush hour. But usually, it takes me about 50 minutes.

        1. I don’t want to share exactly where I am living :) but the commute it a slight exaggeration. It’s prob more like 1:10 in rush hour? I don’t know traffic patterns yet but they don’t seem great when people are actually commuting. My current commute is 30 minutes in non rush hour and 45 in rush hour. I think 30 min is my max before I feel like I’m spending too much time commuting! Pre COVID I was 1x from home a week, hoping I can do 2-3x a week from home if/when we have to go back. Also, my long-term plan is to get a job closer to my new place. Lots of great companies within 20 min of my house, just have to get lucky and find the right role. Plan right now is to stay in current job until April 2020 and then start exploring options.

  6. Interesting point of view.

    We have 3 kids and there are times I wish we lived in a bigger home.

    However, this home has helped us to become millionaires in conjunction with used cars and cheap hobbies/eating in.

    It’s a dilemma. On one hand I like the idea of a more spacious home, but I hate knowing my taxes would most likely double here in Illinois (Cook County).

    Staying put allows me to squirrel away even more money for kids via no mortgage, and lower utilities/taxes.

    I see this as a benefit for further increasing what I can leave for my kids.

    And I also wonder, will I eventually be any happier. You know, that baseline of happiness we all seem to revert back to.

    It’s such a conundrum because on one hand it would be nice, but on the other, the increased costs could make me regret if it was even worth it.

    In the meantime I keep investing that mortgage in VTSAX.

    Knowing the property taxes here will continue to soar, doesn’t help.

    1. I hear you about the pain of paying property taxes in Illinois. I think you guys are the number one or number two highest property tax state in the country.

      But I can tell you straight up after moving into a larger house during the pandemic, having a bigger, nicer house has been priceless. Instead of feeling pain for paying higher ownership costs, I feel joy.

      The time to spend money on a better life is during a pandemic.

      1. I agree.
        To echo Sam, If you’ve worked hard and can afford it, why not? You deserved it. Plus you’ll feel much better in a upgraded home. You can even be at a whole new level. You only live once. Enjoy it and feel rich! Your kids and spouse would enjoy it!

    2. hereverycentcounts

      How large is your home? I just spent 1.7M on an 1800 sq ft house where two of the bedrooms are 100 sq ft if it makes you feel any better. Woohoo Bay Area. And I have 2 kids and want one more. And my FIL is living with us in the master suite.

  7. Great post Sam. Feels right to me. We are expecting a second kid next year and are finally going to take the plunge to go from apt style living to a single family home. Wish we made the plunge before this residential melt up in prices!

    1. Congratulations! And I am pretty certain that you are really going to appreciate the value of a larger home. Just going from apartment to single-family home is huge in it of itself.

    2. hereverycentcounts

      I’m in the same boat. I have a 2 year old and have been saving living in my 1br apartment that I meant to leave when he turned 1. Now I’m pregnant with #2 (at 37) and will be giving birth in Jan. I want a third at 39 if I’m able to have one. I decided to buy. I regret it already, but we haven’t moved in yet… I’m just looking at 50k-100k in repairs on the 1.7M house up front. Did you know it costs 600 to remove a pile of boulders and an old giant broken fridge that the sellers leave you? 3000 for termites. 1000 for roof fixes. 10000 for electric upgrades (or more.) 20000 for HVAC and asbestos removal (maybe more.) Etc. I’m in pain right now over this and feel stupid for buying. Hope it is worth it.

      1. Seems like you should price out some of these work packages, and not just take first offer on the scope. Also, if you are nervous about the cost associated with the work, evaluate what is a NOW cost, and what can be a LATER cost. Boulders and things could likely wait. I’m sure you could find some laborers to pick up a fridge for less than that as well. $3k for termites seems intense.

        After all of those costs and getting the place fixed up at least it will be yours. Also there is no equity in renting, so you are at least building in potential savings to go with your milestone plan.

        Last thing with house sales, I always think that If there was a reason that I bought it, there will be others who share the same view. So, you should likely be able to take comfort in it could be sell able in the future. You can’t be the only person who saw value in the house (location, schools, traffic pattern, etc.)

        1. I’m interviewing about 90 bazillion contractors to make sure I at least understand what going market rate is for all projects.

          The fumigation may be a fail on my part, but the seller’s inspector report noted significant termite issues and recommended to do the full tent. I figured we’re never going to do that after we move in, so might as well take care of it now. It’s closer to 2200 with the tent and then they are spraying around the house. But apparently in order for the tent to work I need to rake around the house and remove plants (and boulders, because, the sellers did leave those lovely boulders) and since I’m 29 weeks pregnant and incapable of doing this myself I now have to rush to find a handyman and pay whatever they will charge to help prep the house for this, so it will get me closer to 3000. At this point this is pretty much a done deal, so I’m going with it. Hopefully it means I won’t have termite issues for a while?

          The other stuff… I’m trying to figure out what we must do now vs what can wait. Overall I know if I don’t do things now before we move in, they’ll prob never happen.

          Electric… new panel (current one is super old and apparently a fire hazard.) We want to put recessed lights in the rooms–that’s a nice to have, but seems to make sense to do now. The outlets aren’t grounded and apparently the kitchen work was all unpermitted and done wrong, so a good electrician recommended we replace the circuit (at least in kitchen) and hold on fixing the grounding (I’ve heard it’s better to just rewire each room as you remodel over time.)

          HVAC – old ducts are filled with asbestos and in crawl space (yeay!) We want AC. I thought because this place had forced heat we could use the ducts and it would be like 5k but surprise, old ducts and furnace have to go. So now this is a 15k-25k project, including getting rid of the asbestos (that isn’t actually too expensive, it’s mostly the ductwork and AC.)

          Roof – seller’s inspection report notes about 1000 in damage/repairs. Seems like we should do it?

          Washer/Dryer – nice to have, but I think they are from the 1960s and they are really gross and I want a new washer/dryer. 1000-2000?

          Bathroom Remodel — this is definitely a “nice to have” not a must have — BUT — the only thing I do for my mental health is take daily deep soaking baths. When I’m healing from childbirth, the bath is essential. Beyond this, my kids need a bathtub. There is a gross old jacuzzi bath in the master suite that my father in law will be staying in, but it has no door and it really isn’t something I can use (and if I bathe my kids in there I will need to do it in the morning when he is out for his walk vs at night as he goes to sleep early.) So my hope is I can turn the 58″ shower into a tub with overhead shower. The whole bathroom is old and has some water damage and prob should be ripped down to the studs if I’m going to do anything. I feel like if there is one gift I can give myself it’s making this a nice bathroom as it will be one bathroom for the four of us for the next five or so years (plus maybe a third kid in there.) The quotes I’m getting for construction range from 15k-35k for the full remodel. I’m also looking into what happens if I just do the tub area, but it sounds like that alone is a big cost–and some reframing might need to be done to fit the tub.

          Garage — some more must have stuff here, some nice to have but easier to do now before all our crap is in the garage. We need 2 new doors for safety purposes. We’d like to have an automatic garage door opener (vs a janky manual one.) We have to get rid of the massive “wine closet” the sellers left us (non functioning and with no key, apparently.) I’d like to insulate the walls, Sheetrock the ceiling, add an attic entrance for storage and lighting, and epoxy the floors so we can use this space for a gym / multi-purpose room. Clearly not a must have, but it will add a lot of value to us in terms of being able to use the space.

          Yard – I just need to figure out gardening. I’d like to landscape one area that is just a pit of wood chips and an ugly view, and I want to get my son a playground. Very nice to have, but it will all add to our enjoyment of the house now.

          Bedrooms — one idea I had that probably makes no sense is to take the closet from the kid’s room and put it into the temporary master bedroom (both rooms are 100 sq ft next to each other.) My husband and I need a bigger closet! What about closet in kid’s room? There is a hall closet that right now has the water heater and furnace outside of that room. Well, we’re moving the furnace to the attic (hopefully) and if we get a tankless water heater, we can reclaim that space and put it into the kid’s room. Really, this doesn’t solve the problem much because the rooms are still tiny and I hate how small they are. The best option is to do an addition in front (there is room) but that would cost a fortune–like 150k–so that’s not happening any time soon. I figure we’re living in this space for 5 years so it would be nice for it to not feel like my bedroom is a tiny closet.

  8. This raises an interesting point: if people who don’t like hassle own stocks and don’t have kids, this may explain the loving of stock training that millennials seem to have. Their generation may be the first to normalize never having kids.

    It’s a good thing as Reddit is filled with stories of terrible parents who had kids for all the wrong reasons.

    1. Interesting. My rule was always to save 500k before my first kid and 1M before my second. I hit 500k before kid 1 (pregnant at 33) and 1.5M before kid 2 (pregnant at 36) and now my husband has agreed to try for #3 if I can get to 2.5M. My current path to 2.5M by 38 seems achievable due to some RSU growth. I don’t know how people have kids who are in debt. I waited to buy a house in HCOL area until pregnant with #2 because I wanted my home equity (value of sale after real estate fees and after tax) was = no more than 20% of my total after tax net worth. I’m trying to keep this ratio as well. I STILL feel like I shouldn’t have bought (my PITI is 7k a month but FIL is living with us and paying 2k of it for a few years) as my income is unstable due to mental health issues but at my current net worth I think it’s a bit less of a risk.

      Anyway, I’m a millennial and I have kids. My sister is 7 years younger than me and she’s barely making more than minimum wage. She may never have kids. She also doesn’t day trade though.

      1. Seems like a steep entry fee, given you never know what life will bring. I would say in your situation welcome the newest edition and then decide if 3 is meant to be or not. Putting a price point on having a child seems very odd, and harsh. The stock market takes a dip and you have no control = no third kid. Hardly seems fair.

        1. I agree. It was more of a joke with my husband. He isn’t exactly enthralled with the idea of having 3 kids but he’s open to it. I’ll be 37 this month and giving birth in January. If I am going to have another kid we’re going to have to try pretty soon after baby #2. He’s concerned about finances (he also makes 90k a year 1099 and I’m the breadwinner) so it’s up to me to prove to him that we have enough money to support a third child. I’m actually in a good place to make that happen if my RSU holds. Of course, stock market could tank and we can not hit this goal. I don’t think that means we won’t have a third kid, it just means there will be another conversation to be had about how we can afford one. I put the number on it because to my husband it seemed impossible to hit and I’m like, yea just wait until I get my RSUs next year and you’re gonna have a third kid. ;) The first 500k for my first kid really did help, though. I know that’s very not doable for most people, but I held out to 33 to get pregnant and lived cheaply up until then, and then stayed in 1br with my kid until he turned 2.5 and I was pregnant with my second. I really think having some financial stability before having kids is ideal. While I’m not exactly going to live a life of luxury with 500k in the bank, I know if I lose my job I can afford to put food on the table and a roof over our heads for a while. Now the numbers are a bit more arbitrary. But I like having goals, they motivate me to save, so why not?

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