Learn Me Home Ownership Costs

The only gas work I've had to do is add in a line for a gas stove. Meant bring gas to part of the house that didn't have it before. Wasn't all that expensive and nothing blew up, so I'm good with that. No hidden valves or anything weird.

My wife assumes that all men can do this kind of thing. Her father built the house she grew up in. The minimum bar for manly competence is set very high in her family.

NOHOME, it took me about 6 weeks to do our kitchen, and it was functional for most of that. I also had time to go to California and race in the 25 hours of Thunderhill in the middle. That's with me working solo and doing everything but the tile and the installation of the quartz countertops. It's a big kitchen, too - the island is as long as an NA Miata. That may have helped, because I started at one end and worked to the other, which let large portions of it remain functional. It was the sink that was the time-critical aspect.

Knocking down walls may look fun on TV, but a sledgehammer is a really slow way to take out drywall Last one I took out, I used a Sawzall with a demolition blade and took out 8' chunks. My parents' house had lath and plaster, I remember a lot of quality prybar time.

Back to the original question of cost, we use a spreadsheet called Within Your Means. It was pretty crazy to set up because it's a geared towards being a whole budget, but the cool thing is that it has you inventory everything you have that you have to periodically have to replace(for example, roof, washer, fridge, furniture, lawn mower, grill, windows, tires for the daily driver, etc) with a replacement interval.

We guessed a lot when we bought this house at what the expected remaining life span of each of these kinds of things were, and then you come up with a monthly amount that you transfer to a "replacements fund" account.

The idea is that it's unlikely that your roof will need replaced the same day as your fridge, washer, etc, etc, etc, so you slowly build up a continuous fund to have on hand to replace things as they break.

Over the past ~5 years at this house, our replacements funds are sitting at almost $5000. We've had to get a new water heater, tires, some other appliances that failed in that period, and it's no stress, the money is already there.

WonkoTheSane wrote: Over the past ~5 years at this house, our replacements funds are sitting at almost $5000. We've had to get a new water heater, tires, some other appliances that failed in that period, and it's no stress, the money is already there.

I love the concept of tracking the life of everything estimating costs more accurately.

The concept of a 'replacements fund' account of $ that just sits there seems ridiculous to me. Why wouldn't you pool it with the rest of your investments and then just withdraw when needed?

ProDarwin wrote:

WonkoTheSane wrote: Over the past ~5 years at this house, our replacements funds are sitting at almost $5000. We've had to get a new water heater, tires, some other appliances that failed in that period, and it's no stress, the money is already there.

I love the concept of tracking the life of everything estimating costs more accurately. The concept of a 'replacements fund' account of $ that just sits there seems ridiculous to me. Why wouldn't you pool it with the rest of your investments and then just withdraw when needed?

Eh, it's a division of our money market (liquid savings) account that I can instantly transfer to checking if needed.

Obviously it's not making investment returns, but it's (marginally) > 0%, and you should have liquid funds available anyway.

I just happen to have dedicated/allocated savings if the fridge dies tonight.

If you have solid savings plan, you're already accounting for this in some way, shape or form, this just let us put a value on what we should be putting towards replacement.

Keith Tanner wrote: My wife assumes that all men can do this kind of thing. Her father built the house she grew up in. The minimum bar for manly competence is set very high in her family.

My ex's father was similar - along with his brother, he built an A-Frame kit home on their farm property in the mountains. On weekends and holidays. Over about 22 years. 22 years of spending weekends in a leaky grist mill with plastic walls, various wild-life intrusions, and going to the bathroom in an outhouse (probably the reason she has the largest bladder of any woman I've ever met as well as most men - she can hold it forever). The downside to that experience is any suggestion about camping gets a "oh berk that! BTDT way too much!" response.

I really should do something more productive with my emergency fund than just letting it sit in my checking account. Not sure why I don't... But there is a certain comfort in knowing I can write a check for pretty much any emergency need for the house or car.

alfadriver wrote:

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.

It's not for everyone.. and my wife has declared "never again" more than once (she's a saint). I just really like re-arranging walls.

My main point was to budget more than you think is needed.

We have a small ~1200 ft^2 house, and even at that we've found one of the things you'll have to come to terms with is that you pretty much can't hire somebody to do any major project for less than ~$10k. Need a new roof? ~$10k. Need new windows? ~$10k. Need a new retaining wall? ~$10k. Need a new (small) bathroom? ~$15k, etc. Substquently, smaller projects like water heaters and carpet will generally seem to start in the $1k range.

Sure you can get it done cheaper, and we have, but usually that means sacrificing quality of materials, quality of craftsmanship, or both...Or you can try and figure out how to do it yourself and sacrifice copious amounts of what little free time you might otherwise have. It's a painful pill to swallow for what is commonly not actually very technically difficult work, but there is always going to be that price to pay at some level. And even without cheaping out, all but the best contractors will still leave imperfections behind that will bug you at first but if your at all detail oriented. Take solace that they will at the very least bug you somewhat less with time. There simply is no such thing as 'perfect' if you're really looking. One other tip we've learned the hard way is to always get at least 3 bids, and never go with the lowest one.

Having a house built to your specs would be neat, but baseline contractor grade stuff is typically the cheapest versions of everything. Thus, unless you're willing to pay quite a bit more to get everything upgraded from day one, within 3-5 years it's going to begin the cycle of constantly needing maintenance, just like any other house. Admittedly the older the house though, the more...uh...'interesting' past repairs/solutions you're likely to encounter. But that's all part of the 'character' of older houses. It's always fun having professionals come to quote a job, and watching them try to figure out WTF the previous owner(s) were thinking. LOL.

Many personal wealth gurus/books/seminars will tell you that your home is your single greatest asset. However, few will freely admit that it's also far and away your single greatest liability. This one sided 'investment' mentality is what gets people buying the most house they can afford. In most housing markets most of the time, when all is said and done over the years, you'll likely have made little (if any) more on your house than you would have sticking that same money in the stock market. The key is that you do still need a place to live anyways, so in the long run it is at least that much better than renting. So if you view buying your house from that more pragmatic perspective, merely a better long-term alternative to renting rather than an investment, you'll be more likely to buy below your means. Which will free up funds for pure investments.

Yes, if you buy things in the right place at the right time, and/or for the right price, real estate can be a great investment too...But that really shouldn't be the primary intent for most peoples personal home.

And if you look at how long you need to live there to 'break even', remember to also take into account the closing costs when buying, and even more importantly the RE agent commissions and any sales/excise taxes.