For parents, the countdown to kindergarten ticks almost as loudly as the biological clock — especially if your local public schools aren’t great.
By the time the oldest child is 4, real-estate agents say, most parents in this predicament throw themselves out on the real-estate market, trying to buy their way into the best school district they can afford.
Should you pull the trigger so quickly? Would you be better off staying put and socking that money away for a few years, or spending some of it on private-school tuition until values rise?
"I think a lot of people move sooner than they need to," says Liz Vaughn Avila, an agent with Dilbeck Realtors in La Canada, Calif.
Given the shaky job market and still unstable real-estate market, agents say it might pay for some people to hold off on that pricey purchase. But how do you know if you’re ready to make the move?
MSN Real Estate asked education consultants, real-estate agents, financial experts and parents what they would consider before taking on a much larger mortgage for better schools.
Weighing your options
First, experts say, you should study all of your options — not just the schools at the top of the ladder, or the ones your friends rave about.
1. What is your local elementary school really like?
A lot of people tend to dismiss that public school around the corner before even checking it out, says Fiona Whitney, a Los Angeles education consultant and author of the Whitney Guides to private schools and preschools. Sitting in on a class might just convince you that it will work for your child, or conversely make you more resolved to find something else.
Tour a couple of the vaunted public schools in that area you have your eye on. What’s the difference?
The main point here is: Don’t just listen to what your friends say, go out and see for yourself.
2. What charter or magnet schools are in the area?
This can be a great low-cost alternative for kids who have an interest in a particular area such as science, or parents who embrace a more progressive teaching philosophy. But getting into these schools is no sure thing. Parents must apply — usually earlier that same calendar year — and hope they make the cut.
As with any other options, it’s important to spend some time at the school and talk to other parents about their child’s experience there.
"You have to find a good fit for the child," Whitney says.
3. What private options do you have and how much do they cost?
Experts say you should look at your budget and ask yourself how much you could realistically spend a month on tuition. Make sure, says Massachusetts certified financial planner Patricia Konetzny, that you are first socking away 10% of your net income for retirement. (You might need to tap that for college.)
"If sending (the kids) to private schools means they can’t do that, then I would advise against it," she says.
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Parochial schools — if you’re open to that — can often provide a high-quality education at a slightly lower price than many other private elementary schools, in part because they are subsidized and supported by the church and its members.
But keep in mind that many private schools will also hit parents up for donations or additional fund raising during the year.
It’s also good to know whether these schools offer scholarships or financial aid. If you lose your job, you might need this safety net.
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Lastly, take a critical look at commute times: That beautiful private school that’s 30 minutes away from you might be wonderful, but it will strain you and your gas budget over time.
Public school: One parent’s perspective
Residential architect Demery Matthews knew that she wanted to live in an area with great public schools. She had always wanted her children to grow up in the same type of community she did, with a lot of other parents of young kids, and a school you could walk to.
So she and her husband, Zac, sold their three-unit rental property in Pasadena, Calif., and the house they were living in nearby and moved their three kids — a fourth came later — to Sparr Heights, a small,close-by community with a Mayberry-type feel and a fairly hefty price tag: $550,000 for a small two-bedroom house that they gutted to add a second story.
This craftsman-style renovation added more to the cost of the house, leaving them with a mortgage payment of about $2,700 a month when they finally moved into the house in 2007.
Several years later, Matthews’ work contracts have waned, making her family a little "house poor." But she doesn’t regret it.
"It was worth it for us. When we walk around this neighborhood, our children’s friends are all over the place. We had other options, but none of them were preferable to living within walking distance of our kids’ school."
Numerous studies over the years have shown that houses in areas with high-scoring public schools tend to hold their value better than others.
"Schools in a quality district are easier to sell and do command a higher price," says Walter Moloney, a spokesman for the National Association of Realtors, pointing to some NAR studies.
Of course, the markup for good public schools can be huge in some areas — too large for a lot of budgets.
Houston real-estate agent LaRetta Allen of Prudential Gary Greene Realtors says that houses with good schools in the Memorial neighborhood of Houston cost on average at least twice what similar houses sold for in nearby neighborhoods.
In some suburban areas, she says, that markup is even higher.
So what should you ask yourself before making this investment so early?
- How many children do I have/plan to have?
- How secure is my job?
- How long do I plan to stay in this area?
- What are my social expectations for this community outside of the schools?
- How diverse is the school?
- Is the environment right for my child? Is it too high pressure?
- Will I need two incomes to make a mortgage payment there? Will we want to keep up with the Joneses and blow our budget?
Moreover, agents say, be aware that buying in an area with good schools doesn’t guarantee you anything. Rezoning could move your child to another school and budget crunches could increase class sizes.
That’s what Zac Matthews is fighting in his prestigious school district. With teacher layoffs threatened, he is supporting a proposal to raise funds through a parcel tax to preserve the district’s staff.
"We need to protect our investment," he says.
