Keeping Up With the Joneses - Part III

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.