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Proper approach to this real estate calculation?

30,261 3,904 January 3, 2020 at 11:57 AM
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Long story short, our oldest DD will be entering middle school soon - she's currently in a great STEM magnet school (that ends @ 5th grade) but being magnet, entry to the next school is lottery-based and challenging given the demand. The other option would be for her to attend the school district where my wife teaches, which is much better than the district where we live (2 towns about 20 minutes apart via highway). As part of their contract, teachers' kids can attend the district and just have to pay the per-pupil expenditure - varies by year but is generally $6000-$7000 or so. We have 4 kids in total, the next being 6 (1st grade) and the other 2 not even 2 yet.

So then the question is, there will be some point at which it might just make more sense to move to the other town, and get schooling included in property taxes. Therein lies the catch - that district/town has generally much higher property values (that is, what you get for what you pay is a lot less), and consequently a higher mil/tax rate (which also translates to vehicles BTW, but those are relatively small potatoes compared to homes).

I'm trying to determine at what point it would make sense to move but to me it doesn't make sense to ONLY consider the difference in property taxes - but I should also consider interest paid on property value differences as well (does that make sense?), and perhaps even the loss in selling our current place (say 6%).

To get an idea of the difference here, to maintain the same monthly PITI payment (more or less), and more or less a comparable house (e.g. not a dump, not 1 BR, etc), we could move up to ~ $550-600k house (vs the ~ $400k one we have now) but the home property taxes would be more like $15k (vs. $7500 we pay now). The interest paid difference would be enormous - I haven't run those numbers but right now we are ~ 4 years into a 15 year @ 3.25% with about $210k outstanding and we'd be resetting that into a 30 year @ 3.75% (let's say, we both have excellent credit and could put more than 20% down after the current place sold) for something like $450k. I want to say it's something on the order of $200k in interest over the life of the loan.

I don't have insurance numbers but if we assume they scale with the value of the home (+50%) that's another $500/yr (we pay about $1k/yr now) to add. Car taxes might add about the same to $1000 or so per year. There are also other costs, like that I would now have a +20min longer commute (more gas, more depreciation per year), and she would have a shorter one.

Honestly, if we were to move I'd be more inclined to move wholesale out of the dump that is CT but that's a larger discussion and a much bigger decision!

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Quote from Dr. J
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Long story short, our oldest DD will be entering middle school soon - she's currently in a great STEM magnet school (that ends @ 5th grade) but being magnet, entry to the next school is lottery-based and challenging given the demand. The other option would be for her to attend the school district where my wife teaches, which is much better than the district where we live (2 towns about 20 minutes apart via highway). As part of their contract, teachers' kids can attend the district and just have to pay the per-pupil expenditure - varies by year but is generally $6000-$7000 or so. We have 4 kids in total, the next being 6 (1st grade) and the other 2 not even 2 yet.

So then the question is, there will be some point at which it might just make more sense to move to the other town, and get schooling included in property taxes. Therein lies the catch - that district/town has generally much higher property values (that is, what you get for what you pay is a lot less), and consequently a higher mil/tax rate (which also translates to vehicles BTW, but those are relatively small potatoes compared to homes).

I'm trying to determine at what point it would make sense to move but to me it doesn't make sense to ONLY consider the difference in property taxes - but I should also consider interest paid on property value differences as well (does that make sense?), and perhaps even the loss in selling our current place (say 6%).

To get an idea of the difference here, to maintain the same monthly PITI payment (more or less), and more or less a comparable house (e.g. not a dump, not 1 BR, etc), we could move up to ~ $550-600k house (vs the ~ $400k one we have now) but the home property taxes would be more like $15k (vs. $7500 we pay now). The interest paid difference would be enormous - I haven't run those numbers but right now we are ~ 4 years into a 15 year @ 3.25% with about $210k outstanding and we'd be resetting that into a 30 year @ 3.75% (let's say, we both have excellent credit and could put more than 20% down after the current place sold) for something like $450k. I want to say it's something on the order of $200k in interest over the life of the loan.

I don't have insurance numbers but if we assume they scale with the value of the home (+50%) that's another $500/yr (we pay about $1k/yr now) to add. Car taxes might add about the same to $1000 or so per year. There are also other costs, like that I would now have a +20min longer commute (more gas, more depreciation per year), and she would have a shorter one.

Honestly, if we were to move I'd be more inclined to move wholesale out of the dump that is CT but that's a larger discussion and a much bigger decision!
Or buy a cheap(ish) place in the other town and rent it out to an old couple/person, friend, family, etc. that doesn't have kids and doesn't mind you using their address for school registration for a small discount on rent or putting the utilities in your name or something. Win win Wink

Our school district, that isn't good, all of a sudden stopped releasing kids from the district so they could attend better schools that are actually closer to our address citing that too many good kids/families were leaving even though the good schools in the neighboring districts were willing to accept the kids. So what would have been a 45 minute drive to/from work (each way) including kid drop off (at the good school) became a 1hr 15 min drive to/from work (each way) all so my kid can go to a worse school and bring up their crappy averages. F that!

Creative problem solving and it's a lot less than private school... Big Grin
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Last edited by LivninSC January 3, 2020 at 12:34 PM.
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Quote from LivninSC
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Or buy a cheap(ish) place in the other town and rent it out to an old couple/person, friend, family, etc. that doesn't have kids and doesn't mind you using their address for school registration for a small discount on rent or putting the utilities in your name or something. Win win Wink

Our school district, that isn't good, all of a sudden stopped releasing kids from the district so they could attend better schools that are actually closer to our address citing that too many good kids/families were leaving even though the good schools in the neighboring districts were willing to accept the kids. So what would have been a 45 minute drive to/from work (each way) including kid drop off (at the good school) became a 1hr 15 min drive to/from work (each way) all so my kid can go to a worse school and bring up their crappy averages. F that!

Creative problem solving and it's a lot less than private school... Big Grin

Well I did think..... hey I could just rent a place there [for 2 kids we'd be looking at around $1k/mo per-pupil] .... but ironically the town's rules *specifically* prohibit that (second sentence in the admission PDF):

"Residency must be permanent, provided without pay and not for the sole purpose of obtaining school accommodations."

In fact they have like 2 full pages dedicated to the definitions of "provided without pay", "permanent" and "residency" and they look at previous enrollment (if you're moving from the next town over that's crappy that obviously looks suspicious)

laugh out loud And of course it would look super bad if a teacher was caught doing this!
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Last edited by Dr. J January 3, 2020 at 01:26 PM.
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laugh out loud And of course it would look super bad if a teacher was caught doing this!
They all have something like that basically. What are they gonna do, show up at your house and check. Although yes if it were to come to light and one of the parents was a teacher in the district I could definitely see how that would be bad LMAO
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Quote from LivninSC
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They all have something like that basically. What are they gonna do, show up at your house and check. Although yes if it were to come to light and one of the parents was a teacher in the district I could definitely see how that would be bad LMAO

One of DW's friends growing up got caught up in something like this but in another town - her parents lived in the next town over and they cojoled a friend in DW's town to letting them use their address as residency to allow their daughter to go to school there. She even went through the act of getting picked up/dropped off by bus there.

The district did eventually catch on somehow but I think by that time she was nearly graduating so they just let it slide.
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The district did eventually catch on somehow but I think by that time she was nearly graduating so they just let it slide.
That's the thing. What are they gonna do (if your wife weren't a teacher)? Kick the kids out and force them to go to the crappy schools they would have been going to all along? Ohhhh no! I imagine it would be pretty easy to get away with, especially if it's a neighboring district but 20 mins away I would think sooner or later something would get out. Presumably when your high school aged boy dumps his GF and she tells on him to get back at him for being such a dick the parties over laugh out loud

I kind of don't get it. The schools want more kids because they want more $ per pupil. I can see why they wouldn't want more than they can realistically teach but a few here/there it's more $ in their pocket. We had to sign something saying we wouldn't take our kids out of school for unnecessary reasons, i.e. vacations, because it hurts the kids (aka they don't get paid for those days)...

Whatever you do, good luck. I always used to kind of laugh off the whole good school/bad school thing but having school aged kids now I'm like oh crap maybe I should have bought elsewhere!
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Last edited by LivninSC January 3, 2020 at 02:05 PM.
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Quote from LivninSC
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That's the thing. What are they gonna do (if your wife weren't a teacher)? Kick the kids out and force them to go to the crappy schools they would have been going to all along? Ohhhh no! I imagine it would be pretty easy to get away with, especially if it's a neighboring district but 20 mins away I would think sooner or later something would get out. Presumably when your high school aged boy dumps his GF and she tells on him to get back at him for being such a dick the parties over laugh out loud

I kind of don't get it. The schools want more kids because they want more $ per pupil. I can see why they wouldn't want more than they can realistically teach but a few here/there it's more $ in their pocket. We had to sign something saying we wouldn't take our kids out of school for unnecessary reasons, i.e. vacations, because it hurts the kids (aka they don't get paid for those days)...

Whatever you do, good luck. I always used to kind of laugh off the whole good school/bad school thing but having school aged kids now I'm like oh crap maybe I should have bought elsewhere!
The other angle I've been thinking is that in 11-12 years I will be *mortgage free* meaning another $2k or so in the monthly budget that will be freed up. If we were to move, we'd be forced to get a 30 yr. Ugh the thought of starting the clock over with double the term is daunting. There *has* to be some sort of value in that!
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most schools give free teaching to teachers kids
what's this per pupil charge that's not free schooling
some one I know used to be a teacher and had 6 kids in school free no extra charge
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Last edited by justthebieber January 4, 2020 at 10:48 AM.

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First question you and your wife have to answer is: Do you like your current home and neighborhood?

If the answer is no, then sell the house and move.

If the answer is yes, then you're over complicating all the costs and there's no need to move for financial reasons.

Follow this basic math:
  • You have 4 children to put through 4 years of high school.
  • 16 years x $7,000 = $112,000 total
  • Your youngest are below the age of 2. Assume at least 17 years living in the new school district until the youngest graduates.
  • $7,500 (property tax increase) x 17 years =$127,500 extra in property taxes.

You will "save" $15K+, have your house paid off, and avoid all the other bs Connecticut taxes.
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Quote from timbertdi
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First question you and your wife have to answer is: Do you like your current home and neighborhood?

If the answer is no, then sell the house and move.

If the answer is yes, then you're over complicating all the costs and there's no need to move for financial reasons.

Follow this basic math:
  • You have 4 children to put through 4 years of high school.
  • 16 years x $7,000 = $112,000 total
  • Your youngest are below the age of 2. Assume at least 17 years living in the new school district until the youngest graduates.
  • $7,500 (property tax increase) x 17 years =$127,500 extra in property taxes.

You will "save" $15K+, have your house paid off, and avoid all the other bs Connecticut taxes.
School costs and property taxes will rise at a rate that is unknown.

OP...what about renting the current house and buying new? By the time the little ones are hitting HS you'd be done with the 15y and making a ton monthly. Or you do that for a few years while equity rises and sell. It also gives you a fallback on getting away from the new home and back to the one you live in today if things go south for you somehow.
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School costs and property taxes will rise at a rate that is unknown.

OP...what about renting the current house and buying new? By the time the little ones are hitting HS you'd be done with the 15y and making a ton monthly. Or you do that for a few years while equity rises and sell. It also gives you a fallback on getting away from the new home and back to the one you live in today if things go south for you somehow.

That could be an option I guess however even though we are in a relatively good financial position, we don't have the $$ for a 20% dp in the new place (which would realistically be $100k+) without selling the current one; also from a cash flow perspective I am not sure we could get a loan for the new place with the current one still "on the books" even though it would theoretically be rented. I wanted to do basically the same thing when we last moved, about 10 years ago, from a condo in a town about 30 minutes away - I'd be mortgage free on that property by now but at the time it just wouldn't work.
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Quote from timbertdi
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First question you and your wife have to answer is: Do you like your current home and neighborhood?

If the answer is no, then sell the house and move.

If the answer is yes, then you're over complicating all the costs and there's no need to move for financial reasons.

Follow this basic math:
  • You have 4 children to put through 4 years of high school.
  • 16 years x $7,000 = $112,000 total
  • Your youngest are below the age of 2. Assume at least 17 years living in the new school district until the youngest graduates.
  • $7,500 (property tax increase) x 17 years =$127,500 extra in property taxes.

You will "save" $15K+, have your house paid off, and avoid all the other bs Connecticut taxes.
Answer to first question is yes.... current home/location/etc is fine, the discussion is 95% centered around schooling with the remaining 5% being things like.... easier commute, easier to shuttle kids to activities (since they are all in that area anyway). If not for the schooling angle, we wouldn't be toying with the idea anyway.

I hesitate to bring the toddlers into the picture because we are talking another 8 or 9 years until they're at this phase and a lot can happen until then.

Also, this is not only high school but also middle school, so 6-12 which is 7 grades not just 4 - it changes your math significantly.
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That could be an option I guess however even though we are in a relatively good financial position, we don't have the $$ for a 20% dp in the new place (which would realistically be $100k+) without selling the current one; also from a cash flow perspective I am not sure we could get a loan for the new place with the current one still "on the books" even though it would theoretically be rented. I wanted to do basically the same thing when we last moved, about 10 years ago, from a condo in a town about 30 minutes away - I'd be mortgage free on that property by now but at the time it just wouldn't work.

A lot depends on the risk level you can accept. With little ones, I would personally be more cautious. But...if you can line up or think a renter will be quick...

A loan from 401K could help, as well as short term PMI and recasting/refi as soon as possible.
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A lot depends on the risk level you can accept. With little ones, I would personally be more cautious. But...if you can line up or think a renter will be quick...

A loan from 401K could help, as well as short term PMI and recasting/refi as soon as possible.
Any good resources rather than word of mouth WRT rental viability in any given area?
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Any good resources rather than word of mouth WRT rental viability in any given area?
Zillow and Trulia is where I'd look.
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