Budget is one thing -- Investment is another. How do you decide $$?

10 years ago

We just closed on our new property in July. It needs a major overhaul. While our budget provides us a limit on what we can afford to invest, how do we determine what we "should" invest? We plan to stay in the home, God willing, 25 to 30 years. It is our dream property -- magnificent, rare open bluff view of the front range of the Rockies, just 4 miles from town and every amenity we will ever need as we age (i.e. brand new hospital...), situated perfectly on ten acres. Properties in the "neighborhood" have nice views and land, but none are as pristine as this one. The developer of the area chose this plot for the original home. The home we purchased was a replacement home to that one and built in 1949. We plan to maintain the basic footprint of 2,250 square feet on the main level of this walk-out ranch, but need to raise the entire roof from 7' to 11' to take in the breathtaking views -- that's just for starters. In addition, we need to build a new 4-car garage. A barn for horses already exists and is in good condition. Any wisdom to share on how much we should invest relative to the property values around us (?) would be greatly appreciated. Should we really be concerned with the values in the rest of the "neighborhood?"

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Ironwood Builders

10 years ago

Creating your own space, one that speaks to you on many levels is an investment. Return on investment is not static. Living with the results of your desire to create your own space is life enhancing. Not getting back what you put in and not caring about the deficit is the nature of love. Love your home.

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Comments (10)

elcieg
10 years ago
Well, no one can predict the future real estate prices, but 30 years should give you a good return on your property. If you are really invested, just do what you need to do, when you can and move forward. We paid 47,500 for our first home in 1972.

Our next home we bought in 1992 for 475,000. We sold it 8 years later for 1,200.000. Baring a world disaster, you will see your investment grow over the years. You are at the age where you still want to build equity. We are now riding on all the equity we built.
jonisherwood thanked elcieg
kadodi
10 years ago
This is a really tough question. Just tonight we agreed to an offer on our house. We are not sure the house will appraise for the selling price. We lived there for over 21 years and there is little that we didn't change. We sunk a ton of money into the house and can't possibly recoup all of it. But I enjoyed it and that is worth something.
jonisherwood thanked kadodi
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elcieg
10 years ago
Reading kadodi’s post, I also didn’t consider the location. We are in the Boston area, and including down turns in the real estate market, if you hold on through it all, our experience is it has come back and more.
jonisherwood thanked elcieg
jonisherwood
Original Author
10 years ago
I am so grateful for this discussion page. Thank you for responding and giving us things to consider as well as triggering new thoughts and ideas. I should have mentioned that we are empty-nesters. Three college tuitions paid in full and two of three married :) Grandkids on the horizon... as well as one more wedding. We both hope to leave this place feet first in 25, 30 or maybe even 35 years! After 90, all bets are off!
S. Thomas Kutch
10 years ago
Jonisher, there are many differing thoughts now about homes and investment post residential market bubble bursting. Some are of the thought it will return to the pre-bubble market and keep on rising...... Others are of the opinion that it will improve, but more slowly....others doubt we will ever see the pre-bubble market conditions for at least a couple of decades. Some even think that if you can keep some equity insight you're doing good. The market has changed, there are literally 100's of thousands of home underwater mortgage wise and those will continue to have an impact on the market conditions for some time. Throw in the constricted lender environment and you've got a lot of factors involved.

I'm with Ironwood, What is the return on "enhanced living"? You're talking a long term window..... who knows what the next decade will bring or the decades after that? I say do what you want to do now to enhance your life.........for all we know in 25 or 30 years from now, things could change drastically. The future could be that a smaller cob mud home that is self sufficient (i.e totally off the gird) with enough land to support your immediate family is the going to be the optimum investment........quite literally the only way to exist. In that case, all those tract homes, condos, city homes won't be worth the paper the mortgages are written on.......

Hey..... just 15 years ago the prevailing thought was that your home was the safest place to invest your money for the greatest return......my how things have changed.
jonisherwood thanked S. Thomas Kutch
kadodi
10 years ago
Judy's, I don't live in a depressed area. We live in Virginia, 50 miles from DC. Our house is unique with high end finishes... Here are no real comps.
kadodi
10 years ago
That should have been Judyg, not Judy's ... Love autocorrect!!
lkg1984
10 years ago
Congrats on your new home!
What to invest in? Infrastructure primarily, but also things that make everyday living easier and will ensure your comfort and confidence there years to come.
Examples...
Think about your roof and eaves: Are they fire-resistant?
Pathways and porches: Can you redesign them to minimize stairs, add handrails?
Landscaping: Does it function as a firebreak? Have you cleared weak trees and fallen branches from a perimeter around your house?
jonisherwood thanked lkg1984
jonisherwood
Original Author
10 years ago
IKG, Thank you for your thoughts. You are so right -- we've been working from the infrastructure out. My Mother has lived with MS for nearly 40 years. We've designed this house as though she were living with us... Wide hallways, no stairs, roll in shower, pedestal sinks, a self-contained living space buildable in the walk-out. Proper roofing material... It's daunting, but worth it.