Sky_Render wrote: Anything else I'm missing? Obviously that doesn't include upkeep or maintenance, but that's something I'd be saving for anyway. My concern here is I want to make sure I can budget for the monthly costs and still be able to save money and have something left over to have fun with.
Emergency slush fund
I currently rent a very poorly-insulated townhouse. That's why I'm assuming my utilities will go up no more than 50%.
the way I look at it, a house is a depreciating asset much like a car. The property it sits on tends to be the appreciating asset - that for the most part, balances out the depreciating part (with the exception of the whole housing bubble thing a few years ago).
End unit, or center? Even a poorly insulated townhouse still has an R value of nearly infinity on two sides.
oldtin wrote: the way I look at it, a house is a depreciating asset much like a car. The property it sits on tends to be the appreciating asset - that for the most part, balances out the depreciating part (with the exception of the whole housing bubble thing a few years ago).
this.
If I wasn't in one of Arizona's most expensive housing markets I would've bought closer to town (while still being in the county for lower taxes) and gotten more land.
Having more land just gives you more options down the road.
ProDarwin wrote: End unit, or center? Even a poorly insulated townhouse still has an R value of nearly infinity on two sides.
End unit. And it's a "nice" end unit with a bunch of poorly-sealed windows on the end. I've found that townhomes are generally constructed as cheaply as possible, which is why I refuse to ever buy one.
Definitely agree on the appreciation (or lack thereof) on a house. But if I'm planning on being here for a decade or so, the money I dump into a mortgage could be mostly recouped, as opposed to just lighting it on fire like I'm currently doing by leasing.
I wouldn't buy a townhome unless it's downtown in a historic district and your neighbors are gay and there is a Montesorri school across the street or something.
Newer townhomes seem like a whole bag of "nope" to me. I've lived in a few.
Again, while it might be worth it to get into the market, I'd also keep your eyes open for rentals as well. You may find a really nice rental property that is worth getting into until the housing market slows a bit.
It should not be assumed that your monthly payment will always be the same. As a rule of thumb, it's safer to expect things like property taxes and insurance to get more expensive over time. So, if your place is barely within budget when you buy it, it's likely to strain the budget later on unless your income increases too.
I'm conservative enough with finances that I certainly don't count on income increases, and I expect taxes to climb as well, so the budget has to account for those possibilities. Of course I'd gladly be wrong and have more slush in the slush fund than expected, but cover yourself for all scenarios.
Sky_Render wrote: I currently rent a very poorly-insulated townhouse. That's why I'm assuming my utilities will go up no more than 50%.
I doubled my house size and cut my utility bills by 90% simply by building a newer more energy efficient house.
That's the good thing about buying a house built since 2000, the federal building codes have changed and they are way more efficient.
The bad thing is that the trees aren't mature and you don't know how the neighborhood is going to age.
If you want a "No HOA" in Frederick, look in the city north of 9th St. Most houses have at least a one car garage and you can find everything from duplexes to multiple story homes.
We bought our house in 1976 and have put another $125K in it since then. That figures out to ~$3.5K a year. That includes a couple additions, complete custom kitchen, a couple furnaces, etc.
And we haven't had a mortgage payment for 18 years!!
At your age, budget for:
A kid
Another kid
A few years of single income
And then..
Budget 2-4% of the house value in ANNUAL upkeep. Some years you get to skate.. some years you get to do the roof, or the HVAC, or the foundation, or the driveway, or the kitchen floor, or replace some fixtures, or paint the place, or new appliances, or new windows.
I'm in my ninth house. Always buy a needy one because I enjoy projects. Now, I try to do a $3-5k project every year. When I sell it, it'll be worth top dollar because it hasn't been ignored.
STM317 wrote: It should not be assumed that your monthly payment will always be the same. As a rule of thumb, it's safer to expect things like property taxes and insurance to get more expensive over time. So, if your place is barely within budget when you buy it, it's likely to strain the budget later on unless your income increases too. I'm conservative enough with finances that I certainly don't count on income increases, and I expect taxes to climb as well, so the budget has to account for those possibilities. Of course I'd gladly be wrong and have more slush in the slush fund than expected, but cover yourself for all scenarios.
This is very true. The house that my ex still has, from 2009 to 2015 the insurance nearly doubled........and we never made a claim.
pheller wrote: I like working around the house. I see a house like a project car, but unlike most project cars you can actually get your money back out of a house, if you buy a house similarly to how you buy a project car. Doing things that making your car look dope are worth the money. Suspension, wheels, etc help sell the car, just like landscaping and neighborhood can help sell the house. People say "buy a house with good bones". I like to say "buy a house that needs maintenance, not repair." Maintenance items are often cheap and require labor. Repair items (roof, appliances, additions, etc) often cost lots of money. Don't buy an overpriced project car missing a motor and wiring harness. Buy cheap and be realistic about the maintenance and repairs you can do yourself and/or afford to pay someone else to do. We looked at a $240k property that had a perfect property. Thing was, the house was a tear down. It didn't make sense to pay $1050 a month in mortgage but need to be shelling out $3000 a month to a contractor for renovations. Or, we could have taken a mortgage+construction loan for $340k, but then we'd still be living in a construction zone for a year. No thanks. A project house should be a like a project car. You've got a daily driver (a house you can live in while working is being done), you can afford all necessary repairs and modifications out of pocket (not taking big loans) and the property should be cheap enough that there is virtually no risk of losing money (value can be increased through labor, not investment). I bought my first home in January at $300k. It has needed virtually nothing being 9 years old. So far I've spent maybe $250 on a maintenance items. Maybe less. I might need a dishwasher, but we're dragging it out till its really dead. I need to widen my parking area - expected cost is about $1500-$3000. I want to build a better walkway around the side of the house - expected cost $300. Now, we were renting for $1550, with an expected rental increase of $150 to $1700 total. We could not find anything cheaper that met our needs for less than $1300 and that required tremendous amount of luck, and most of those rental would mean increasing our commute time by 15 minutes. I could get a smaller rental for $950-$1100, but we're talking 1-bed 1-bad no garage and kinda crappy. So I said "I'm not going to exceed my current rental cost." and we just barely did. Our mortgage + insurance + taxes are $50 cheaper than our previous rent + insurance. Our utilities are similar, we pay more for heating. If I could do it again, I would've held out for a nicer neighborhood. A Two-Car garage with proper parking would have been nice too. And a proper laundry area (ours is in a closet) would've been nice. But does it beat our previous apartment? hell yea. TL:DR don't overspend, stay close to work, be realistic.
Yikes. I can afford a $300k house here in OK, but I have no idea what I'd with all the space or the yard!
OHSCrifle wrote: I'm in my ninth house. Always buy a needy one because I enjoy projects. Now, I try to do a $3-5k project every year. When I sell it, it'll be worth top dollar because it hasn't been ignored.
A comment about this. When I bought my house, I had visions of grandeur thinking that I would do a great job renovating my house myself. Turns out that I didn't like it so much- more because it was always 4-6 hours of work after a 8-9 hour working day. And then 12 hours on the weekend. When you are not a pro, everything takes longer than you think.
A short while into some of the starting work, we learned that we were not going to do the jobs that really would make the house livable- like a new upstairs bath and new laundry room, kitchen, and 1/2 bath next to it- so we hired it out. Good thing we did- as even what we did finish- some of it was half-assed.
And I'm NOT disagreeing with OHSCrifle- I'm saying that we are all different. So before jumping into renovations with both feet, and the depth starting at neck level- find something small. If you like that, you can do something bigger. And if you really like it, then you can possibly work in a long term flipping scheme. And if you don't like it, you'll know. I don't, and see the value in finding contractors.
alfadriver wrote: A comment about this. When I bought my house, I had visions of grandeur thinking that I would do a great job renovating my house myself. Turns out that I didn't like it so much- more because it was always 4-6 hours of work after a 8-9 hour working day. And then 12 hours on the weekend.
This is kinda what I was getting at earlier when I said you need to choose your battles.
To add to the above, not only does it require a bunch of your time when all you want to do is sit down and relax, do a workout, play a video game, work on the race car, etc. But your house is often a complete disaster while the renovation is in progress, so the pressure is constant.
I did all my hardwood floors myself. They look great and I saved probably around $6K. But the 3 months it took me to do the whole house was miserable. I would not do that again.
I think the biggest projects we would do to a home we just bought would be paint, lighting fixtures, and/or replacing appliances. I am not a handyman by any definition of the word, so I sure as E36 M3 aren't going to dive into a full kitchen renovation or something.
In reply to alfadriver:
It's funny... I don't mind doing these jobs... and thanks to rebuilding my ex's house, I have developed the skills and tool collection to do them... but since splitting up with my ex-, my motivation to do them is now virtually nil.
Unfortunately, the down-side of "BTDT" is now a severe distrust of contractors. Especially for electrical work, since that is my background. "You want how much to install a circuit breaker, a receptacle and run some wire??? Something I can do in my sleep? Oh hell no..."
Paint, light fixtures and appliances are easy. I did a kitchen reno using Ikea cabinets. I've gotta say, it wasn't all that hard. I had pros take care of the new tile floor (life's too short to lay tile unless you're getting paid!) but with well-done design work it was more a matter of assembly than anything else. Some will diss Ikea cabinets, but they're an order of magnitude stronger than the 35-year-old stuff I tore out with better hardware. I also used Ikea kitchen cabinets in a bathroom, that worked out really well.
There's some stuff I won't do. I don't mess with gas other than screw-on fittings. Someone else can take care of the pipes. Tile - as mentioned - is a PITA. Hardwood is dusty, hard work. Replacing windows I prefer to do with someone more experienced handy.
I grew up in an old house that we completely renovated around us. It was 10 years of hard work and plaster dust. A friend's family celebrated paying off their (bigger) 10 year mortgage about the same time we finished - when they were done, they had a normal 10 year old house that was paid for. When we were done, we had a gorgeous 80 year old house that was also paid for. They proceeded to pay someone to tear out the back of the house and extend, finish the basement and they started to pay the new mortgage...
I don't regret the path my parents took, but nobody in my family is terribly high maintenance so it wasn't a big deal to have part of the house torn up constantly. It also gives you a different view of a house - it's something you can fix and modify instead of something that you buy and preserve. Kinda like buying a new special edition Corvette versus building an LS1-powered MGB, come to think of it.
In reply to Keith Tanner:
Oddly enough... gas piping is pretty easy. I re-routed a bunch of it for the ex's house. Even ran some preliminary piping for a NG generator.
Actually, I found all of the MEP systems to be fairly straight-forward. Maybe a bit tedious at times, but none of it is rocket science.
It's more the consequences for getting it wrong that keep me from doing it 
I'll do it on my camper, but I'll let a pro deal with the explosive pipes inside my walls.
My latest home ownership fix-it adventure was actually pretty funny. The water pressure to our fridge has always been really low, to the point where it won't make ice*. With the current ambient temperatures, I was informed that It Was Time to get it working. The water feed runs under the tile floor, but my garage is underneath so I was able to go up through the unpainted plasterboard ceiling. I measured out where it should be and lo and behold, there's a patch in the ceiling. Took it out and found the hookup for the fridge feed. It was one of those retrofit vampire taps that pokes a hole in the copper pipe and has a little T handle on it so you can turn it on and off. After a bit of fiddling, I discovered that the valve hadn't been opened all the way by the original installer. Turns out this particular type of hookup has to be opened right to the maximum to get full flow, unlike the non-vampire versions of similar valves. So I opened it up all the way, the fridge got full pressure and the ice maker started working. The plaster patch has now been replaced with a screwed-in wooden one that bears a label "FRIDGE WATER FEED" because someone's going to have to go back in there in a few decades, I'm sure. Janel is a very happy camper.
(*) for all of you who are now going to tell me that you just use an old-school ice cube tray, good for you. The freezer is full of top-quality Colorado pork and beef from the in-laws, which trumps ice cubes
ProDarwin wrote:alfadriver wrote: A comment about this. When I bought my house, I had visions of grandeur thinking that I would do a great job renovating my house myself. Turns out that I didn't like it so much- more because it was always 4-6 hours of work after a 8-9 hour working day. And then 12 hours on the weekend.This is kinda what I was getting at earlier when I said you need to choose your battles. To add to the above, not only does it require a bunch of your time when all you want to do is sit down and relax, do a workout, play a video game, work on the race car, etc. But your house is often a complete disaster while the renovation is in progress, so the pressure is constant. I did all my hardwood floors myself. They look great and I saved probably around $6K. But the 3 months it took me to do the whole house was miserable. I would not do that again.
I do think that it does bear to be repeated- with show in my time like This Old House, and Hometime; and now with many more shows on various TV shows- it SEEMS easy.
It is easy and enjoyable for some, easy and painful for others, hard and fun for a few, and just a PITA overall for many. Gotta figure out what one wants to be.
I never found it that technically hard, I just found out I don't like doing it.
Other than overbuying a home, this seems to be a big area where new homeowners can get into over their heads.
As for Ian F's comment about contractors- we've been really lucky, no doubt. The only bad one we've had was a contractor who the insurance company suggested- we had some water damage that had to be repaired- and that company sucked badly. Thankfully, the team that came in a few months after them to replace our windows was the exact opposite- they gave us a schedule, kept to it exactly, and charged us exactly what the bid was. Amazing.
And we've been fortunate to find good people for pluming and HVAC. The roof guy- I'm still not 100% on, but when he does work- they do a good job.
One of the best places we've gotten advice- our local, home grown lumber yard. They know some really good people. One very good carpenter who was able to put together some in store parts to replicate some crown molding we had.
The path I had been on was suggested by my father. Buy a tired luxury home that needs TLC (because so many people can't even be bothered to change a light bulb) for half the market value, do routine maintenance, paint, put in a showcase kitchen, and resell it after living there for 3-4 years. That way you avoid capital gains taxes and make a few hundred thousand dollars. Repeat this a few times and you're doing it with your money instead of mortgage money.
Yet another reason getting divorced sucks.
This method only works in very upscale areas, you never want to have the most expensive house in a given neighborhood. And it takes a skilled eye to see potential under hideous wallpaper, ugly kitchens, and beat-to-death flooring. My "luxury flip" had 53 burned out light bulbs and one of the ugliest kitchens I've ever seen. In 3 months of tinkering with it I had it so nice that guests asked if I was going to start my own HGTV show.
I have zero desire to "flip" houses.
Though I do hope to one day do a project that involves knocking down a wall, because that looks fun!!!
I would say this is thread is sufficiently off track that I cant do more damage.
Plan is to do an Ikea kitchen next year as a way to ease into the retirement gig and take a break from the car hobby. Been in the same house for 25 years and while there has been nothing that I have not tackled to keep it going, I have not taken on a major renovation project. I like to think that I can figure it out. My only concern is for the length of time that the kitchen will be out of commission.
I do agree with the "I don't want to work a full day and come home to six hours of forced house construction for six months".
In reply to Keith Tanner:
Again - it comes back to that "don't really trust Pro's" problem... The ex- has it worse than I do. She doesn't trust anyone other than her father and brother. Sometimes. Over the 11 years we were together, some of that rubbed off on me. Mostly because it forced me to dive in and just do stuff, with the rather Clarksonian attitude of "how hard could it be?" In most cases, not very hard - and often faster than dealing with contractors.
There should be a special place in hell for those who bury valves inside walls. It's illegal for electrical boxes. Not sure about valves, other than being just bad practice.
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