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Dik Hz posted:With that precondition, it's all about the rates. If you can get a better return than your mortgage rate with palatable risk, then you're better off going that way. If you can't, you're better off paying off your house. Shouldn't you also take risk into consideration? I think you should. Your mortgage has a cost but your investment in a property also has a risk. In my opinion it is not always smart to expose 100% of your financial assets to a totally undiversified risk (a single property in a single location), just to save yourself the costs of a mortgage. If you are in a situation where you can borrow at a reasonable rate and use that money to diversify, thus lowering risk, you should at least consider that. You can't guarantee a certain return from your investments. All you can do is estimate risk, calculate cost, and try to make a smart decision. In the long-term investing thread the consensus seems to be overwhelmingly that diversification of one's long-term investments is crucial. Do you disagree?
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May 15, 2012 17:39
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Leperflesh posted:Shouldn't you also take risk into consideration? I think you should. Your mortgage has a cost but your investment in a property also has a risk. In my opinion it is not always smart to expose 100% of your financial assets to a totally undiversified risk (a single property in a single location), just to save yourself the costs of a mortgage. If you are in a situation where you can borrow at a reasonable rate and use that money to diversify, thus lowering risk, you should at least consider that. I think most of us can agree that 100% is not the smartest way to go about it. The real question is at what point would you consider paying off your house? Is 50% of your assets in your home good? Paid off 200k mortgage and 200k in retirement at 30 years old? Is that too much risk in your primary home to save on a mortgage? I am curious because I am going through this right now. I would love your thoughts on what would be a "smart" way to handle my mortgage at this point in my life. Ohh and the numbers above are not mine.
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May 15, 2012 18:24
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I... don't know for sure. I think it is always going to depend on your retirement goals, and your risk tolerance, both of which depend a lot on your personal circumstances. And also an assessment of "how risky is this house as an investment", which depends on your local market, the house itself, your neighborhood, etc. etc. Assessing the risk of (say) a futures contract is relatively easy (in theory) because they're bought and sold on a very efficient marketplace where thousands and thousands of buyers and sellers establish a price. The price premium (in theory) tells you exactly what "the marketplace" thinks the risk of that futures contract is, and (in theory) with many people all compiling their opinions, you get a good result. Assessing the risk of a single-family dwelling is much harder. You only have at best a handful of bidders (buyers), a single seller, huge transaction costs, and the actual sale only happens once. An appraisal gives you another data point, but read back through the thread and you'll find many people who feel they're only just-shy of worthless due to various factors. Probably the question of "what percentage of my retirement portfolio should the equity in my house be" is a good question for the long term investment and retirement savings thread.
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May 15, 2012 19:19
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Leperflesh posted:Shouldn't you also take risk into consideration? Dik Hz posted:If you can get a better return than your mortgage rate with palatable risk, then you're better off going that way. sanchez posted:Why? It's right there in the loan documents as an option. You give back the keys, the bank takes the house. It's an option just like any other. People act like nonpayment is illegal or something. If your financial goal is the most zeroes at the end of your bank statement, you're going to take different actions than if your goal is stability and the means to support your lifestyle. Also, mailing in the keys isn't something you want to be doing with small kids, I imagine. But I value flexibility right now and hedge against risk by renting.
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May 16, 2012 00:35
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OK, I can agree with all of that. But previously, you saidDik Hz posted:This is stupid. You're on the hook for the house either way. Having clarified my position extensively, do you still feel this way?
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May 16, 2012 00:55
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Leperflesh posted:OK, I can agree with all of that. But previously, you said Dik Hz posted:I'm coming at this from the angle of a house being a generally bad investment that I would want to live in long-term and raise a family with stability.
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May 16, 2012 01:05
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Back in the real world: Our inspection is complete and we're moving forward with the purchase. Closing date is June 12th!
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May 16, 2012 21:44
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New roof on garage, $3,000. Replacing steps that I knew were bad when I bought the place $3,000. Don't buy, just don't do it.
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May 17, 2012 14:47
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Elephanthead posted:New roof on garage, $3,000. Replacing steps that I knew were bad when I bought the place $3,000. Don't buy, just don't do it. How much did you budget for immediate repairs and how much have you spent? Just curious.
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May 17, 2012 14:55
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Harry posted:I could be wrong, but I'd think a house worth $100,000 in a city has a very low chance of substantially losing value. Well, when i bought about 5 years ago, the neighborhood was in the $120,000 average selling price area, now it's in the high $80,000s, with most of the sales sitting in the $87-89k range. (I paid $78k for a HUD house, so whatever.) Technically this is a suburb, but it's actually got jobs other than Walmart and several large corporations headquartered here (Plano, TX).
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May 17, 2012 15:00
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Elephanthead posted:New roof on garage, $3,000. Replacing steps that I knew were bad when I bought the place $3,000. Don't buy, just don't do it. It cost you $3,000 for a staircase? Interior or exterior, and what the heck did you replace them with, gold-plated treads?
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May 17, 2012 16:25
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daggerdragon posted:It cost you $3,000 for a staircase? Interior or exterior, and what the heck did you replace them with, gold-plated treads? I immediately presumed they were cement exterior steps given the cost.
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May 17, 2012 17:33
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Bucket Joneses posted:I immediately presumed they were cement exterior steps given the cost. D: Cement stairs cost that much?! How the heck is that even possible, given that a bag of cement is what, $50 and some 2x4s for making a frame is another $50? Screw that, I'll re-build my front steps out of pressure-treated lumber.
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May 17, 2012 18:29
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daggerdragon posted:D: Cement stairs cost that much?! How the heck is that even possible, given that a bag of cement is what, $50 and some 2x4s for making a frame is another $50? Yes, it costs $100 to replace a set of cement stairs. I don't understand why you're not a fulltime contractor already. Did you think of: 1) Cost to demolish and dispose of existing structure? 2) Cost to hire workers to complete the job? 3) Cost to rent a bobcat and a cement mixer?
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May 17, 2012 19:12
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Don't forget license, bond and insurance, plus transportation costs.
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May 17, 2012 20:39
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I'm in the mindset of DIY, here. I assume there's a dumpster, since a re-roofing is going on, and if the existing stairs are in that bad of a shape, they should be (somewhat) easy to break up and chuck in the dumpster. Even so, if you're going with a pro, that sounds like an awful lot of money for some front steps.
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May 17, 2012 20:52
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Hope you like breaking up cement with a chisel and a hammer then! If not, you'll need to shell out some money to rent a jackhammer as well. It'd be nice if the person who posted this would clarify the kind of steps he did work on so we can continue this fake argument.
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May 17, 2012 21:14
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daggerdragon posted:that sounds like an awful lot of money for some front steps. Renter trap sprung.
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May 17, 2012 21:27
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Bucket Joneses posted:Hope you like breaking up cement with a chisel and a hammer then! If not, you'll need to shell out some money to rent a jackhammer as well. Just theorizing here: In lieu of renting a jackhammer, could you achieve the same effect with a sledgehammer and elbow grease? Of course, this all assumes the existing concrete stairs are in bad enough condition, and is completely dependent on how much work you want to do vs. how much money you want (or have) to spend.
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May 17, 2012 22:05
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daggerdragon posted:Just theorizing here: In lieu of renting a jackhammer, could you achieve the same effect with a sledgehammer and elbow grease? How did you read two sentences and only process one of them?
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May 17, 2012 22:39
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daggerdragon posted:Just theorizing here: In lieu of renting a jackhammer, could you achieve the same effect with a sledgehammer and elbow grease? Of course, this all assumes the existing concrete stairs are in bad enough condition, and is completely dependent on how much work you want to do vs. how much money you want (or have) to spend. No offense to them, but the majority of the people in this thread seem to have no interest in DIY, or have way more money than time.
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May 17, 2012 22:40
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Ozmiander posted:No offense to them, but the majority of the people in this thread seem to have no interest in DIY, or have way more money than time. *forks over $60k to contractor*
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May 17, 2012 22:44
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gvibes posted:Definitely the latter. It would take me about 18 months to gross that.
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May 17, 2012 22:49
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Also, it's REALLY, REALLY, REALLY, REALLY, UNBELIEVABLY easy to VASTLY underestimate how much time something is going to take DiY, especially if you've never done it before. I've been working on repairing a shower wall for a bit over a year now and it seemed just so simple when I started. A lot of things are like that in home repair, especially safety-critical ones like stairs. Oh yeah, there's another bit. Things like stairs that most people consider simple actually have pretty tight regulations regarding height between steps, size of steps, etc. They're huge tripping hazards, especially when there's snow and ice outside. It's possible to not gently caress this up as a DiYer, but it's even easier not to consider things until you've poured the concrete. Then you're stuck either leaving it as is or tearing it all out and doing it over again.
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May 17, 2012 22:50
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It's pretty lame to rag on people for not being "DIY Enough" when a lot of the projects you can take on as a home owner require actual knowledge that you won't know you needed until you've royally hosed it up. Sure, you can spend hours reading on the subject but some people just don't have the time, energy, or desire to do that. Anecdote: I have a friend who bought a house and is doing 100% of the rebuild himself. He says it has cost him 3x more than he had budgeted for and he actually knows what he is doing. I can only imagine what would happen.
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May 17, 2012 23:30
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I can't even replace a shower valve correctly (pro advice: shut off the water first)
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May 17, 2012 23:38
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gvibes posted:I can't even replace a shower valve correctly (pro advice: shut off the water first) This made me laugh myself sick. I did it with a toilet once, and the cutoff knob was frozen to boot.
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May 17, 2012 23:44
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A co-worker and I both needed to retile our bathtubs at around the same time. He went DIY, and I paid a contractor to do it. Mine may have cost 3x what he paid, but mine was done in 2 days, while his took him 4 months.
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May 17, 2012 23:46
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I've seen houses that had "front steps" that were a couple stories high. How much do you think it would cost to replace these?  Also you may have to do groundwork first, depending on soil conditions, slope, etc. Also there may be pipes buried underneath the steps, or even wiring. My parents spent nearly ten thousand dollars replacing a 10' by 15' concrete driveway. Which they only did because they had to replace the leaking (ceramic!) sewer pipe beneath it, and the first contractor hosed it up and left the driveway with a negative slope so that runoff actually ran into the garage and also didn't properly finish the surface. When it comes to home repair/upgrade projects, the devil is always in the detail. Something can cost anywhere from literally nothing, to tens of thousands of dollars, even for seemingly simple-sounding projects. Leperflesh fucked around with this message at 00:00 on May 18, 2012 |
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May 17, 2012 23:53
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gninjagnome posted:A co-worker and I both needed to retile our bathtubs at around the same time. He went DIY, and I paid a contractor to do it. Mine may have cost 3x what he paid, but mine was done in 2 days, while his took him 4 months. I know a husband/wife duo that tackled three of their bathrooms to do the following things themselves: 1) Replace the countertops 2) Replace the sinks and faucets 3) Rip up the vinyl and put down tile The way they did it was the husband did crazy amounts of Internet & book research and sourced materials and techniques while his wife did a lot of the actual work. I'm under the impression that he spent dozens of hours researching grout, tile, subfloor materials, etc. In the end, their bathrooms look really amazing with the original wood cabinetry and the new hardware, sinks, and countertops. The tile looks awesome too. He told me when it was all said and done (paraphrasing) "This was so much work and so much headache for something I could have just paid a guy to do for me." Then again, when I asked him about home ownership in general he said "Don't do it. It's too much work." so it's hard to say with those two.
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May 17, 2012 23:59
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Leperflesh posted:My parents spent nearly ten thousand dollars replacing a 10' by 15' concrete driveway. Which they only did because they had to replace the leaking (ceramic!) sewer pipe beneath it One of the fun things I learned when we tried to buy a house was that paving over a sewer drainage line is illegal (usually cited as a health hazard) in every state but Virginia and Texas. We, of course, live in Virginia. 
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May 18, 2012 03:07
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Well the house was a repo with a ton of deferred maintenance. The steps are not just 4 steps going up to an entry door. It is a walk out basement with sweeping steps going up both hills. I think they are pouring 10 yards of concrete. I find that a competent contractor is worth paying for. I am not a competent contractor. My renting friends like to laugh at me so I though you guys would enjoy my misery also.
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May 18, 2012 15:07
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Elephanthead posted:Well the house was a repo with a ton of deferred maintenance. The steps are not just 4 steps going up to an entry door. It is a walk out basement with sweeping steps going up both hills. I think they are pouring 10 yards of concrete. I find that a competent contractor is worth paying for. I am not a competent contractor. My renting friends like to laugh at me so I though you guys would enjoy my misery also. Thank you for clarifying this  Now the $3,000 price tag makes sense.
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May 18, 2012 15:25
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It didn't before?  I mean, those were really reasonable explanations.
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May 18, 2012 15:55
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Splizwarf posted:It didn't before? Well to be honest $3000 for 3 steps up into the porch would have been a bit crazy, especially since you can just drop in a precast piece for probably $500.
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May 18, 2012 16:02
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Daggerdragon just had a failure of imagination. I mean it took me all of five seconds of pondering the pricetag to think "hey maybe it wasn't just two steps up to a door on a porch, if it cost that much".
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May 18, 2012 17:57
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After attending a cool and really helpful first-time homebuyers' seminar, I was informed that probably one of the biggest challenges my husband and I would face is trying not to get emotionally attached to any of the houses we're going to view. Since I already have a particular favorite house on my List of Houses to See, I think that's probably exactly accurate, and I'm curious if anyone has any insight on how to avoid allowing that to happen.
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May 18, 2012 18:11
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Leperflesh posted:Daggerdragon just had a failure of imagination. I mean it took me all of five seconds of pondering the pricetag to think "hey maybe it wasn't just two steps up to a door on a porch, if it cost that much". Pretty much this. Most people have 1-5 steps up to their house, not long winding staircases up a mountain or basement walk-outs dug out of a hillside. Then again, my own experiences with getting quotes for my house leave me kind of jaded against the "pros". One plumber quoted me $8,000 just to hook up PVC sewer pipes to the existing cast-iron sewer out-pipe, and the other three were $5k, $4k, and "nope, sorry, can't do that, it's impossible" . I got it done by an apprentice friend for $850 in materials, beer, and pizza, and $50 to a plumbing inspector.So far, the only pros who've been worth their money were the awesome dudes at Lumber 84 who pre-built my stairs to spec ($350 and a friend's truck to lug it home) and the drywallers ($4.5k for 1,000 sq ft in a house that's hilariously not-square, cathedral ceilings, and some seriously funky curves). I'll lay off the DIY evangelizing now. DO NEVER BUY AND DIY! 
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May 18, 2012 18:34
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ButWhatIf posted:After attending a cool and really helpful first-time homebuyers' seminar, I was informed that probably one of the biggest challenges my husband and I would face is trying not to get emotionally attached to any of the houses we're going to view. Since I already have a particular favorite house on my List of Houses to See, I think that's probably exactly accurate, and I'm curious if anyone has any insight on how to avoid allowing that to happen. Have your Realtor show you a couple of foreclosed on properties in your price range. I mean really, really, really distressed properties. Floor boards buckling, obvious water damage, walls peeling, etc. Then think that as bad as this is, the nice properties you'll see later will probably have at least one thing wrong with them that is on the same level. It might not be as obvious but there is always something hidden in walls/conduit/pipes/crawl spaces that will give you fits later on. It's just good to shock yourselves into knowing really what homeownership entails.
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May 18, 2012 18:35
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ButWhatIf posted:After attending a cool and really helpful first-time homebuyers' seminar, I was informed that probably one of the biggest challenges my husband and I would face is trying not to get emotionally attached to any of the houses we're going to view. Since I already have a particular favorite house on my List of Houses to See, I think that's probably exactly accurate, and I'm curious if anyone has any insight on how to avoid allowing that to happen. For my wife and I, we got past this by taking our own sweet time and being extremely picky. We had no specific time pressure - our lease was on month-to-month - so we started by going to a few open houses and driving past some houses we saw listed on various places, without any intention at that point of making an offer (we had no realtor yet and for the first month, we hadn't even gotten our pre-approval for a loan). That was roughly April 2009. In June we got our pre-approval (we used a broker). By then we'd physically entered and checked out about six or so houses, and we'd stopped and walked around the exterior of another six or so. In July we finally got a realtor (we had a friend's recommendation and also a realtor we'd met at an open house - we interviewed both and then picked one). At that point we started looking at at least a couple houses during weekday evenings, and then most weekends we'd go look at a half-dozen ourselves (open house or sometimes just walking around a house) and then on the following day we'd have a list of a half-dozen to go see with our realtor, sometimes going back to see ones we hadn't gotten into yet. We made our first offer in late October which didn't win, and our second offer in early November (on a house just down the street from the first one) which won. Closed the deal December 6th, moved in January 1st. So during all of that time we must have physically entered and looked around at least like 30+ houses, and we'd driven past, walked around, or otherwise considered another maybe 40 houses. It was a lot of loving work. But we were looking almost exclusively at foreclosures, and we knew we didn't want to buy a dud. Whatever we bought, we knew we'd be stuck with for at least 10 years or so. When you've been inside and inspected like 15+ houses you start becoming pros at noticing subtle problems with them. Especially empty ones. Sometimes we'd be at an open house and there'd be other people there looking and I'm kind of talkative and obnoxious so I'd have no compunctions at all about noisily griping about every problem I saw. I saw a lot of mild surprise and sometimes introspection on those other buyer's faces. I'd say stuff like "Hmm, check it out, this doorframe isn't square any more. Yep, the floor in this room is slopign towards the corner all right, you can see where someone filled in a small crack above the closet and then painted. I bet when we go outside we'll see the foundation's sunk a bit over here." I mean, just talking to my wife about it but you could see other people getting little "ahah" moments. I saw so many loving issues. Cracks in the chimney. Tons of houses with foundations that had moved, often because the roof drainage wasn't being piped away from the house. Bad tile. Water stains on the roof of the ground floor, or in the garage. Water heaters with copper pipes joined directly to steel pipes without a dielectric join. Leaning fences. Trees growing directly next to the house, with damage to the outer wall as a result. Sagging roofs. I saw a three-story Victorian where if you stood across the street, you could see the entire house was leaning in one direction about two or three degrees! I cannot fathom how much it would cost to fix that, possibly more than the entire house was worth. Not to mention just bad design decisions, or stuff I didn't want. We wanted a two car garage. We wanted a decent-sized kitchen. We wanted a fireplace. We did not want wall-to-wall carpeting. We did not want a concrete front yard. We rejected any house that was in a bad enough neighborhood that it had to have bars on the windows of the first floor. We did not want a house on a heavily-trafficked street, or which had no street parking. Be a meticulous rear end in a top hat, look for problems, don't compromise, be ready to take months and months. Don't try to talk yourself or your partner into a house: instead you should both always be trying to talk the other and yourself out of every house you see. You'll know you're ready to make a bid when, even after griping out loud about every problem you both have come up with, you're still interested and are sure you can live with everything that's wrong (or can afford to fix what's wrong that you can't live with immediately). Even then, just assume that you probably won't have the winning bid, so be ready to move on. The house we finally bought? I don't "love" it. It's home now (been here over two years), it's a good house, it feels right... but it still has issues (mostly minor ones) and it will take years and years for us to save up and afford to fix everything that we want to fix. There's no such thing as a perfect house, unless you're a millionaire (maybe even not then).
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May 18, 2012 19:49
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