Earlier I posted about some of my friends and former co-workers that have been engaging in expensive housing purchases. See the posts here and here.
Today, I'm discussing Leslie and John.
Leslie and I used to work together, so we are in the same industry. John works in the arts business. I really have no idea what kind of income John pulls down, but back when Leslie and I worked together she earned considerably more than he did. I don't know if that is true today, but assume it is. Leslie and John have one child.
Last year they bought a $1 million dollar foreclosure home. Yes, a foreclosure at $1 million. Back during the housing bubble, the house had actually sold for $1.7 million so you could argue they got a great deal. I would expect the house to appreciate quickly and, in fact, the property appraiser has it assessed at $1.6 million. As a result, annual taxes on the home are $35,000 ($2900 a month).
The house is 4 bedrooms and has 4700 square foot of living space. It also has a pool. The neighborhood they moved to has an excellent elementary school, but after that it gets mixed for middle and high school.
They have a mortgage in the amount of $750,000. And, they also took out a home equity line of credit in the amount of $100,000. So total debt is $850,000. With a 30 year mortgage their monthly payment is $3800, add in taxes monthly carrying costs are $6700. This does not include insurance, which is expensive in Florida.
Leslie and John previously lived in very nice historic home in a community with a good elementary school. They actually sold that nice home for a decent profit - $172,000. There old home was also 4 bedrooms and had a pool. I'd argue their old home was in a better location because the street their new home is on is very busy.