Better to sell house ~ every 15 years?

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sk.dolcevita
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Better to sell house ~ every 15 years?

Post by sk.dolcevita »

I ask this question because of me ongoing/recent experience.

We bought our two story 2800 sq ft house in 1999 for $266,000 in an MCOL city. The house was then 5 year old. From 1999 through 2015, the house didn't ask for much - for the most part routine maintenance. I think the only significant expense I had was dealing with a shady yard and significant erosion problems. Then in 2015 as house hit 21 years in age, following happened:

(1) New roof $12000
(2) 2X new HVAC units $11000
(3) New gutters $2000
(4) New garage door/opener $1200
(5) New driveway $4800
(6) Underground drainage pipes clogged, replaced $4000
(7) Yet another replant of sod with grading and major landscape maintenance $4000
(8) Rotten wood and other age-related repairs $1500
(9) Removing 3 Leyland Cypress trees next to house that were short and cute in 1998 and now over 80' tall $1500
(10) Interior paint (for the first time in since we moved in!) $4000
(11) New carpets $5000

That's a total of $51000. And we are going to postpone painting our stucco exterior for awhile, that would be another $5000+.

Note that these costs for the most part cannot be avoided if one lives beyond 20 years in a house. And none of these add to the resale value of the house; they just maintain the value.

Now here is something to ponder - I could have sold my house at 15 year mark for about $400000, taken a 6% ($24000) transaction cost hit and bought a similar new house with little additional cash in (offset by higher resale value in 15 years, I assume). I would be owning a new house every 15 years with no hassles to deal with for another 15 years or so, and enjoying all the comforts and features that passage of time has made customary. I choose 15 year old threshold as most of the above are still functional enough to not to become an impediment during sale.

Of course, this assumes there are no non-monetary attachments to the house one is living in (e.g. proximity to work and family, preference for the school district, etc.). And even then, in many cases one can buy a new/er house in the same approximate neighborhood.

Does my thinking make sense from BH point of view? Since I have already completed this cycle of upgrades, I wouldn't be facing this decision for another 10-15 years. However, I cannot but think I chose a less optimal path.
jfave33
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Re: Better to sell house ~ every 15 years?

Post by jfave33 »

In theory a buyer would take into account all that potential maintenance but real estate is a funny game.

Also new houses can come with their own issues. You are not guaranteed to be free from issues like you probably will be with a relatively new car for example.
randomguy
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Re: Better to sell house ~ every 15 years?

Post by randomguy »

Obviously only if you could have bought an identical house (similiar location, size, ....) where things like transaction costs and moving costs are less than repair costs. My experience is that is rarely true. After all if I was shopping for a house, why am I buying your 400k house versus the brand new one for 400k? Obviously I would go new. Now when the new one is 450k, you end up playing a betting game (i.e. what will break and when). Some stuff is easy (paint and carpet) but predicting roofs (20-30 years), HVACs (10-15) and the like is a total crapshoot.
adamthesmythe
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Re: Better to sell house ~ every 15 years?

Post by adamthesmythe »

I would not expect a 20 year old house to need a roof, gutters, driveway, or air conditioning units. The major part of your expenditures seems to be attributed to items that did not last for a reasonable life span.

Your replacements may well have had much higher quality than the originals, and may last longer.

If you do sell and buy another house- look for a builder that delivers higher quality.

(There was a recent thread on old houses. I just sold a house that has a 95 year old roof- still not in need of replacement.)
DireWolf
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Re: Better to sell house ~ every 15 years?

Post by DireWolf »

I think the sweet spot is 10 years. It seems a lot of the nicer new homes around here always go on the market after 10 years. A lot of major repairs start popping up around the 10 year mark, and the "newness" of the house starts to fade. Then you have to make a decision to remodel or just get a new house.
stan1
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Re: Better to sell house ~ every 15 years?

Post by stan1 »

We lived in a house that was too large for us for many years. One of the deciding factors that pushed us to finally sell it was the looming prospect of having to replace the 15 year old HVAC systems which would have been over $20K. We had original appliances except for a dishwasher. We were fine putting off cosmetic updates like kitchen and bath.

We ended up buying a 15 year old house but it is half the size so these replacement costs will be less. We live in an area where new construction is not an option while keeping my 15 minute commute. I wasn't going to give that up so we'll end up replacing a lot of equipment at the new house.
Warning: I am about 80% satisficer (accepting of good enough) and 20% maximizer
btenny
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Re: Better to sell house ~ every 15 years?

Post by btenny »

Yes houses cost money to maintain and lots of stuff just wears out around 15-20 years. Most people budget 2% or so per year for this stuff. So maybe $5K per year or $75K over 15 years. So maybe your list is about right. But quality and material selection and good installation is very important. I see a good amount of repairs that you included in your list that were just poor original installations. You should not need $4000 worth of new plumbing unless your trees killed the pipes. I think the real issue here is the cypress trees were a mistake. Same thing for the new driveway. If the original driveway was installed correctly it should last 50 years or more. Yes it might need a $1000 coating every 10-15 years but not need replacing. Same thing for your roof. If the contractor used good 50 year shingles or tile roofing to start it should last at least 25 years. Same thing for $2000 roof gutters. Why did they need replacing unless the roofing guy killed them when fixing the roof? I suspect they were installed wrong to start.

But you also included a bunch of "redecoration items" for the house interior and the cost to make those changes. Things like new carpet and new interior paint are wants, not repairs. I know that around 20 years most people want to change the house look and buy new carpet, new flooring, new drapes and maybe some new lighting to go with the new paint. So I think you need to add around $10K (pure guess) for other stuff you forgot.

By the way I think it is great idea to move about every 15-20 years. That way you force yourself to "rethink" your living arrangement and not spend the $20K to $30K most people spend on redecorating about every 15 years.

Good Luck.
CedarWaxWing
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Re: Better to sell house ~ every 15 years?

Post by CedarWaxWing »

adamthesmythe wrote:I would not expect a 20 year old house to need a roof, gutters, driveway, or air conditioning units. The major part of your expenditures seems to be attributed to items that did not last for a reasonable life span.

Your replacements may well have had much higher quality than the originals, and may last longer.

If you do sell and buy another house- look for a builder that delivers higher quality.

(There was a recent thread on old houses. I just sold a house that has a 95 year old roof- still not in need of replacement.)
What kind of roof please?

M
finite_difference
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Re: Better to sell house ~ every 15 years?

Post by finite_difference »

I think you probably did not need to do all those things in one year but they were probably all good ideas to do, and you are certainly keeping your house in excellent shape.

$51,000/17 years = $3,000/year. Welcome to owning a house. :) The cost of maintenance is often overlooked, but needs to be factored in. I don't think $3,000/year is unreasonable in that regard over the long haul. That's $250/month, or less than most car payments, and you're getting tiptop shelter out of it!
Last edited by finite_difference on Wed Aug 10, 2016 10:41 pm, edited 1 time in total.
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finite_difference
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Re: Better to sell house ~ every 15 years?

Post by finite_difference »

mspadorchard wrote:
adamthesmythe wrote:I would not expect a 20 year old house to need a roof, gutters, driveway, or air conditioning units. The major part of your expenditures seems to be attributed to items that did not last for a reasonable life span.

Your replacements may well have had much higher quality than the originals, and may last longer.

If you do sell and buy another house- look for a builder that delivers higher quality.

(There was a recent thread on old houses. I just sold a house that has a 95 year old roof- still not in need of replacement.)
What kind of roof please?

M
I think it must be stone or copper. I really want a stone or copper roof :)
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
SFT
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Re: Better to sell house ~ every 15 years?

Post by SFT »

I'll take the problems that I know over those that I don't. Inspectors don't catch everything and new houses have problems too.

You might find inexperienced buyers, but I would personally look at the age of all the systems and factor replacement cost into the offer.
jharkin
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Re: Better to sell house ~ every 15 years?

Post by jharkin »

UH OH.... Im 205 years overdue to sell my house then....

Imagine a thought experiment if every home owner bought a brand new construction house every 15 years. All old houses would be torn down. That would equate to 3-5 million new houses built in this country every year (I checked - last year there where 600K new homes sales and 5.5M existing home sales) . We would probably deforest all of North America in the process. Its not even remotely possible.

Very little of your list should be failing already at 15 years old.
sk.dolcevita wrote: (1) New roof $12000
(2) 2X new HVAC units $11000
(3) New gutters $2000
(4) New garage door/opener $1200
(5) New driveway $4800
(6) Underground drainage pipes clogged, replaced $4000
(7) Yet another replant of sod with grading and major landscape maintenance $4000
(8) Rotten wood and other age-related repairs $1500
(9) Removing 3 Leyland Cypress trees next to house that were short and cute in 1998 and now over 80' tall $1500
(10) Interior paint (for the first time in since we moved in!) $4000
(11) New carpets $5000
1 - A roof shouldn't fail at 15 years old unless they used the cheapest shingles made or did a crappy install. Asphalt shingle warranties run 30 years +, metal and slate roofs can last 50-100 or more.

2 - Central air died at 15 years old????? I'd get a second opinion, I see old 80s vintage units running around here all the time.

3- Why did the gutters fail? Aluminum gutters should be pretty much lifetime unless they are not maintained or where installed wrong, there is nothing to corrode.

4 - Did the garage door rot? I just replaced my70s/80s vintage cheap wood/cardboard garage door because previous owners didn't keep up with the paint. The new steel door I got should outlive me. The 80s vintage openers still work perfect.

5 Why do you need a new driveway? Is it just some cosmetic cracks or is there extensive damage from potholes/frost heaves?

6 Pipes can get clogged, it can take decades or it can happen really fast if they are run near a tree. Buying a brand new house wont make you immune to this risk.

7 If you are replanting the grass all the time you need to identify why its dying. Lack of water? Too much or too little shade? Nutrient imbalance in the soil? (you can get a test from a local university) Grub infestation or lawn disease? Again, buolding a new house isnt going to magically protect you from this.

8 You should NOT be dealing with wood rot at 15 years old. Most of my house still has its original 18th century wood in good repair. If wood is rotting, water is getting in. fix the cause.

9 Trees grow. Buying new wont change that.

10 Paint does not last for ever. Newer more environmentally friendly low VOC latex formulas are less durable than the old lead based oil paints that would lass 50+ years - its a trade off of more work for better health. I dont think 15 years for an interior refresh is unreasonable, most people repaint more often than that just because they get bored with the color. If you buy a new house it will need to be painted again in 10-15 years as well.


11 I don't have carpet so I cant comment...
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lthenderson
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Re: Better to sell house ~ every 15 years?

Post by lthenderson »

I would expect when you go to buy a similar house that didn't need those repairs, it would be $50k more expensive than you can sell yours. Otherwise, why would anyone ever buy yours?

To me, this seems like going out and buying a new car just because you are facing having to replace the tires on your current one.
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Smorgasbord
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Re: Better to sell house ~ every 15 years?

Post by Smorgasbord »

jharkin wrote:2 - Central air died at 15 years old????? I'd get a second opinion, I see old 80s vintage units running around here all the time.
One thing to consider with HVAC units is that price of ozone killing freon has shot up in the past few years so recharging those older units is getting more and more expensive by the day. At $70-$90 a pound, it often makes long term sense to just replace the older unit rather than add freon.
aquaman
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Re: Better to sell house ~ every 15 years?

Post by aquaman »

adamthesmythe wrote:I would not expect a 20 year old house to need a roof, gutters, driveway, or air conditioning units. The major part of your expenditures seems to be attributed to items that did not last for a reasonable life span.

Your replacements may well have had much higher quality than the originals, and may last longer.

If you do sell and buy another house- look for a builder that delivers higher quality.

(There was a recent thread on old houses. I just sold a house that has a 95 year old roof- still not in need of replacement.)
An overwhelming majority of houses have roofs that last 15-30 years. Most modern air conditioning units last 10-20 years.
mbres60
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Re: Better to sell house ~ every 15 years?

Post by mbres60 »

Smorgasbord wrote:
jharkin wrote:2 - Central air died at 15 years old????? I'd get a second opinion, I see old 80s vintage units running around here all the time.
One thing to consider with HVAC units is that price of ozone killing freon has shot up in the past few years so recharging those older units is getting more and more expensive by the day. At $70-$90 a pound, it often makes long term sense to just replace the older unit rather than add freon.
Our a/c needed a pound of freon mid May. It cost about $125 for one pound and I think $100 for the next pound. Two months later we were warm. We were down 2 lbs. We replaced the 2 lbs thinking it might last up to two months plus we were coming into the hottest few days in four years! the freon lasted for 5 days. Our system is almost 19 years old (installed Dec 1997). It would be too expensive to find the leak and fix. Even so in 2020 freon will be banned which means if we get another leak we won't be able to replace the lost freon. We went two weeks without a/c while we got estimates for replacement and then had to wait until they could install it. We are now cool and comfortable :)
fmzip
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Re: Better to sell house ~ every 15 years?

Post by fmzip »

btenny wrote: If the original driveway was installed correctly it should last 50 years or more. Yes it might need a $1000 coating every 10-15 years but not need replacing.
Not in New England! Frost heaves and mushy soil, 10-15 years, 20 maybe if you could live with all the cracks
aquaman
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Re: Better to sell house ~ every 15 years?

Post by aquaman »

btenny wrote:I see a good amount of repairs that you included in your list that were just poor original installations. You should not need $4000 worth of new plumbing unless your trees killed the pipes.
He is talking about exterior drain tiles, which can get clogged up over time. It doesn't mean that there was anything wrong with the original installation.

I do agree with others who say that buying new is not exactly an answer, as new houses tend to come with their own set of significant problems.
IowaFarmBoy
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Re: Better to sell house ~ every 15 years?

Post by IowaFarmBoy »

I feel like your 6% transaction costs may be a little low, especially if you are using a realtor. Probably more like 8-10% then. And you will have transaction costs on the purchase. And moving into a new house brings expenses like new curtains, etc.
aquaman
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Re: Better to sell house ~ every 15 years?

Post by aquaman »

mbres60 wrote:Even so in 2020 freon will be banned which means if we get another leak we won't be able to replace the lost freon.
This is incorrect. The R22 production is set to be phased out by 2020, but there will still be plenty of R22 around. Remember that all R22 from all existing systems being replaced is recovered and reclaimed, so it doesn't just disappear.

It is true that the price of R22 will continue to go up, so, depending on what's going on with your a/c, switching can make financial sense, but you should not be pressured by the a/c technicians to buy a new system because of false claims that the R22 will disappear in 2020.
CppCoder
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Re: Better to sell house ~ every 15 years?

Post by CppCoder »

The life of a roof or an AC unit is very dependent on your local weather conditions. Good luck getting an asphalt roof to last 30 years or an AC to last 15 years in a location that gets pounded with tropical storms and hail and has 90+ degree weather with high humidity for 6 months a year (i.e., Gulf Coast).

We recently bought a roughly 15 year old house in need of some repairs and updating. We negotiated a lower price for the house knowing that repairs were needed and chose to repair/update the house to our standards. Yes, we also had some unexpected repair costs above what we anticipated at close. Such is life. I've looked at a lot of new homes and am often very unimpressed with builder grade appliances and workmanship. It might cost more money, but I prefer buying an older house and fixing it myself. I'll be happier with the result. I'd be really annoyed if I bought a new house and was constantly repairing/upgrading it. The other extreme is, of course, to build your own custom house to start. I've had several friends go that route, and from their experiences, I don't think that option would be for me.
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Epsilon Delta
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Re: Better to sell house ~ every 15 years?

Post by Epsilon Delta »

aquaman wrote: It is true that the price of R22 will continue to go up, so, depending on what's going on with your a/c, switching can make financial sense, but you should not be pressured by the a/c technicians to buy a new system because of false claims that the R22 will disappear in 2020.
Note that some regulators have their eye on R410A, the most likely refrigerant in any replacement system. To my knowledge there are no current plans to phase out R410A, but it's not improbably that before 2030 R410A will be in the position R22 is today. It would not be unreasonable to perform an economically marginal repair on an older system in the hope of delaying replacement for a few years until the crystal ball becomes less cloudy.

Also before you buy a new system it's worth looking at the crystal ball, since new information comes up from time to time.
Lindrobe
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Re: Better to sell house ~ every 15 years?

Post by Lindrobe »

What about any upgrades you have done to the house that you would prefer to have in another house that you bought? For me, I have done the following to my house and would feel like I was downgrading if I did not have these items:

1. Hardwood floors throughout house including staircases
2. Woodburning fireplace
3. Concrete landscaping edging
4. Fence for pets
5. Solid wood cabinets in kitchens and baths
6. Granite countertops in kitchen
7. Stainless steel appliances in kitchen

My point is, would you have a significant list of items that you would like to have in a new house? If so, would you be able to find a house with all of these items and if not, would you be willing to pay to have these things done to the house?
jharkin
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Re: Better to sell house ~ every 15 years?

Post by jharkin »

mbres60 wrote:
Smorgasbord wrote:
jharkin wrote:2 - Central air died at 15 years old????? I'd get a second opinion, I see old 80s vintage units running around here all the time.
One thing to consider with HVAC units is that price of ozone killing freon has shot up in the past few years so recharging those older units is getting more and more expensive by the day. At $70-$90 a pound, it often makes long term sense to just replace the older unit rather than add freon.
Our a/c needed a pound of freon mid May. It cost about $125 for one pound and I think $100 for the next pound. Two months later we were warm. We were down 2 lbs. We replaced the 2 lbs thinking it might last up to two months plus we were coming into the hottest few days in four years! the freon lasted for 5 days. Our system is almost 19 years old (installed Dec 1997). It would be too expensive to find the leak and fix. Even so in 2020 freon will be banned which means if we get another leak we won't be able to replace the lost freon. We went two weeks without a/c while we got estimates for replacement and then had to wait until they could install it. We are now cool and comfortable :)
Which once again raises the point that properly working AC systems should not loose refrigerant over time. If you have to recharge it means you have a leak and the leak should be fixed.

If a 20 year old system has a leak and the cost of repairs and recharge is going to be a significant portion of a new system then by all means replace - you will probably lower your operating costs in the process. I mentioned before that I still see a lot of really old systems operating - I stand by that but also can add that they probably have high electric bills so when 25-30-40 years old DOES fail its worth considering an upgrade. I'm just surprised to hear one 10-15 years old failing catastrophically.
nova1968
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Re: Better to sell house ~ every 15 years?

Post by nova1968 »

Sounds like the builder skimped on materials
edge
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Re: Better to sell house ~ every 15 years?

Post by edge »

I disagree that it is more efficient to move, especially if using a realtor and if moving within the same tax/COL jurisdiction.

6% realtor fee
moving/packing expenses
decorating expenses (unlikely that previous tenants have same taste or that all your furniture fits)
etc

It just doesn't add up AFAICT.
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sk.dolcevita
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Re: Better to sell house ~ every 15 years?

Post by sk.dolcevita »

OP here. I don't think my builder did a bad job. Perhaps average but certainly not bad.

90 years roofs and HVAC systems from 80s? Yes, I would like to have that too :-) But from all the information I have gathered these numbers are 3 sigma or higher outliers.

Roofs - Here (Southeast US) roofs are asphalt shingles. For average build quality and cost, houses built prior to mid-90s, 15-year lifetime was standard. Mine lasted 21 year. Every roofing company I talked to said I got more than the expected life. My replacement roof now has 40-year architectural shingles, but it did come at ~30% premium over base 15-year shingles. Yes, one could get tile/metal roofs but they are going to be very expensive and I see no developer, even the highest end ones, putting those around here. You do see builders now putting architectural shingles, presumably with longer rated lifetimes, but I'm sure that is in the price of the house.

HVAC - my efficient builder-grade Trane systems lasted for 21 years with nary a problem. At that point they started leaking freon and became expensive to have. I have been told by people who know and as well as by Dr. Google that anything about 15 years is a bonus. In fact, the company that installed my new Trane system (towards the higher end) says to expect 10 - 15 years with newer equipment. I this is consistent with almost all appliances nowadays showing faster obsolescence compared to those from years gone by.

Drainage system - almost every builder here uses corrugated black ADS pipes. Over time these pipes trap silt, leaves, twigs, etc. due to corrugation or become brittle due to ageing and collapse. More importantly, once they get clogged, they can be rarely unclogged by a snake (tears them apart). If you are lucky, they could work fine for several decades, but 22 years not unreasonably short time for a problem to crop up. BTW, my replacement uses green smooth SDR 35 pipes. They cost about 30% higher but they can be easily unclogged, will not collapse, and would probably last for many decades. Again, I have not seen any house where builders are putting these in as default.

Gutters - For houses built here in 90s, 4" gutters were the norm. We didn't have any problem until about 3 years ago when they started overflowing. Everything checked out OK and the consensus I got from many "experts" was that our region is getting more rainfall for past several years, and given the very high pitch of our roof, I needed to upgrade to 5" or 6" gutters. I don't know if I buy the "getting more rain" explanation, but upgrading did solve the problem. Also, newer houses do seem to be coming with 5" gutters.

Driveway - this I feel is indeed an issue of build quality as over the years a section of the driveway settled and caused a wide (1/4" - 3/8") crack. I could have lived with it, but it was become worse by the year and very unsightly.

Trees - yeah, it seems builders all around here screwed up installing Leyland Cypress too close to the building. The newer houses have a variety that grows only 15' tall and 3-4" in diameter. All my neighbors are now trying to deal with these 70'-80' behemoths.

Landscaping - this is one "defect" the property has - the yard has a slope with large portions being 50%-80% shade. Sheets of water during heavy rains keep eroding the shaded parts no matter what I do. I haven't found anyone who can give me a reasonable cost warranted solution. However, with 4 large trees gone, the yard is getting more light and hence, another attempt at grass (and few other tweaks).

Interior paint - once in 21 years is hard to argue as a want.

In all, I don't think any of the above are much of a deviation from the norm. Yes, one may not have had a driveway issue, but then you could have something else and all said and done, I think it is not unreasonable to expect about $50K in major repair/maintenance expense every 20 years or so for a 2800 sq ft two story house that now costs around $420K.
Last edited by sk.dolcevita on Fri Aug 12, 2016 11:59 am, edited 2 times in total.
Topic Author
sk.dolcevita
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Re: Better to sell house ~ every 15 years?

Post by sk.dolcevita »

Lindrobe wrote:What about any upgrades you have done to the house that you would prefer to have in another house that you bought? For me, I have done the following to my house and would feel like I was downgrading if I did not have these items:

1. Hardwood floors throughout house including staircases
2. Woodburning fireplace
3. Concrete landscaping edging
4. Fence for pets
5. Solid wood cabinets in kitchens and baths
6. Granite countertops in kitchen
7. Stainless steel appliances in kitchen

My point is, would you have a significant list of items that you would like to have in a new house? If so, would you be able to find a house with all of these items and if not, would you be willing to pay to have these things done to the house?
I did not include my kitchen remodel and solid wood upgrade into my $51K estimate for recurring required upkeep due to ageing. Everything else, like remodels, could be a want.
randomguy
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Re: Better to sell house ~ every 15 years?

Post by randomguy »

sk.dolcevita wrote:
In all, I don't think any of the above are much of a deviation from the norm. Yes, one may not have had a driveway issue, but then you could have something else and all said and done, I think it is not unreasonable to expect about $50K in major repair/maintenance expense for a 2800 sq ft two story house that now costs around $420K every 20 years or so.
The question to me is there a market inefficancy that you can exploit (i.e. 2-3k/year of maintenance seems pretty standard). Can you buy a 400k house with none of the issues of your 400k house that needs 50k of maintenance? You suggested that you could. My experience is nope, those newer houses tend to cost more. Now in real estate there are always exceptions (i.e. the places that sells for 10% more or less than it should have because of buyer/seller need). YMMV.
Topic Author
sk.dolcevita
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Re: Better to sell house ~ every 15 years?

Post by sk.dolcevita »

edge wrote:I disagree that it is more efficient to move, especially if using a realtor and if moving within the same tax/COL jurisdiction.

6% realtor fee
moving/packing expenses
decorating expenses (unlikely that previous tenants have same taste or that all your furniture fits)
etc

It just doesn't add up AFAICT.
Could be but I am thinking it would be in ball park. In return, you could get a hassle-free property (one hopes) for 15 years and one with upgrades that have become more of norm.
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sk.dolcevita
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Re: Better to sell house ~ every 15 years?

Post by sk.dolcevita »

randomguy wrote:
sk.dolcevita wrote:
In all, I don't think any of the above are much of a deviation from the norm. Yes, one may not have had a driveway issue, but then you could have something else and all said and done, I think it is not unreasonable to expect about $50K in major repair/maintenance expense for a 2800 sq ft two story house that now costs around $420K every 20 years or so.
The question to me is there a market inefficancy that you can exploit (i.e. 2-3k/year of maintenance seems pretty standard). Can you buy a 400k house with none of the issues of your 400k house that needs 50k of maintenance? You suggested that you could. My experience is nope, those newer houses tend to cost more. Now in real estate there are always exceptions (i.e. the places that sells for 10% more or less than it should have because of buyer/seller need). YMMV.
You are correct. Newer houses would be more expensive. However, I am assuming they would also have a higher resale value down the road thus mitigating the higher upfront cost. And if you have built some equity in your current house, you could put in a higher down payment to stay close to the current mortgage payment and not disturb your cash flow situation significantly.

I am not saying this is going to a be big financial win, but if you add tangible and intangible benefits of a new construction, a case could perhaps be made.
orca91
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Re: Better to sell house ~ every 15 years?

Post by orca91 »

I think that's very reasonable costs for maintenance and even some wants over 20 plus years. And, it's still your home and now the way you like it.

I think the sell and buy new theory brought up is flawed. The home that was bought new 15 years ago is not going to sell for the same as a brand new similar or equivalent home today. It just isn't... age of the home, different materials, things about to be due on the old home factored in. The 15 year old home valued at $400k is going to probably be a $500k brand new... all things being kept very similar or equivalent. Sure, you could buy a new home for $400k. But, it's probably going to be smaller and lower grade materials and... It would probably be similar to you buying a $200k home in 1999.

Maybe downsizing that way fits in well with life every 15 years? I don't know... would depend on the situation. But, don't look at as just jumping to a new equivalent home every 15 years. That it would not be.

*** Assuming staying in the same area throughout. One could change locations each time maybe moving from city to suburbs to country and make it all equivalent. Maybe that fits in with lifestyle changes also?
Michread
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Re: Better to sell house ~ every 15 years?

Post by Michread »

adamthesmythe wrote:I would not expect a 20 year old house to need a roof, gutters, driveway, or air conditioning units. The major part of your expenditures seems to be attributed to items that did not last for a reasonable life span.

Your replacements may well have had much higher quality than the originals, and may last longer.

If you do sell and buy another house- look for a builder that delivers higher quality.

(There was a recent thread on old houses. I just sold a house that has a 95 year old roof- still not in need of replacement.)
I agree.

We bought our home new 24 yrs ago and only did items 1,8,10, 11 on the list. We did put an addition on the home which was $$.
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Michread
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Re: Better to sell house ~ every 15 years?

Post by Michread »

fmzip wrote:
btenny wrote: If the original driveway was installed correctly it should last 50 years or more. Yes it might need a $1000 coating every 10-15 years but not need replacing.
Not in New England! Frost heaves and mushy soil, 10-15 years, 20 maybe if you could live with all the cracks[/quote

Our 24 year old blacktop driveway in New England looks good with seal coating done about 5 times.
Early retirement 2018
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just frank
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Re: Better to sell house ~ every 15 years?

Post by just frank »

Going back to the OP, it sounds like the oner is running about 1.2% of value (or less if the house has appreciated) per year for maintenance. If this is correct, it is a tad more than the 1% rule would suggest.

I am ALWAYS amazed by folks that seem to think that house maintenance is supposed to be zero, and not about 1% of value. They always have an excuse....like the house was NEW, or in GREAT shape, or had really nice (DURABLE) finishes. And every dollar spent on maintenance is money lost. Or that a 1%/yr house is a 'money pit', etc. Too bad, its factored into the cost.

AS for the 'new house' thing, that can sometimes work in to lower maintenance for a few years, but just as often, design flaws/problems rear their heads after a few years and can be costly to fix (like the OPs erosion).

Sounds like the OP's new house wasn't perfect...it had a typical number of design defects common in houses built at that time.

AS for the premise of selling the house when it is 20 years old after deferring all the maintenance...then you pay a new house premium (about 10%) in addition to the transaction costs (say 8%), getting you to 18%/20 = 0.9%/yr....not much cheaper than just maintaining the house.

In my own case the previous owner (PO) had deferred all possible home maintenance for 19 years, three realtors REFUSED to sell his house in the condition it had gotten into until he did about $50k work on it, then he sold it at about $30k less than (better maintained) comps. He expressed a bit of regret about that to me after the sale was complete, and reported that house repairs (that he could have afforded) were a source of argument with he and his wife (the house went on sale b/c they were getting divorced). In my case, I was aware of (most) of the defects and have prob put in 1%/year plus the $30k that I saved up front getting the place to decent repair.

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sls239
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Re: Better to sell house ~ every 15 years?

Post by sls239 »

Unless you are lucky and find yourself in a fairly hot market, you'd probably have trouble selling a house with a 15 year old roof, HVAC, paint and carpet.
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burt
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Re: Better to sell house ~ every 15 years?

Post by burt »

During my morning walk I am absolutely amazed at the army of service vehicles parked on the street.
This is a 1970's era neighborhood with homes in the $400,000 - $600,000 range in a medium cost of living area (south east Texas).

-plumbers
-painters
-foundation repair
-landscape
-window replacement
-pool maintenance
-HVAC
-electricians
-stone/tile
-driveway
-flooring

I guess that is what happens when people with large funds meet a large workforce.
I swear home maintenance and upgrades are a hobby for some of these people.

A home is not an investment.

burt
randomguy
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Re: Better to sell house ~ every 15 years?

Post by randomguy »

sls239 wrote:Unless you are lucky and find yourself in a fairly hot market, you'd probably have trouble selling a house with a 15 year old roof, HVAC, paint and carpet.
Selling houses is easy in any market. You just have to price it right. Somebody will jump on that unmaintained house because it lists for 50k less than the updated house.
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burt
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Re: Better to sell house ~ every 15 years?

Post by burt »

randomguy wrote:
sls239 wrote:Unless you are lucky and find yourself in a fairly hot market, you'd probably have trouble selling a house with a 15 year old roof, HVAC, paint and carpet.
Selling houses is easy in any market. You just have to price it right. Somebody will jump on that unmaintained house because it lists for 50k less than the updated house.
I agree.
I've been there and done that in 2008.
After 9 months told the realtor to price my home below the comps.
It sold, but it hurt.

burt
Topic Author
sk.dolcevita
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Re: Better to sell house ~ every 15 years?

Post by sk.dolcevita »

burt wrote:During my morning walk I am absolutely amazed at the army of service vehicles parked on the street.
This is a 1970's era neighborhood with homes in the $400,000 - $600,000 range in a medium cost of living area (south east Texas).

-plumbers
-painters
-foundation repair
-landscape
-window replacement
-pool maintenance
-HVAC
-electricians
-stone/tile
-driveway
-flooring

I guess that is what happens when people with large funds meet a large workforce.
I swear home maintenance and upgrades are a hobby for some of these people.

A home is not an investment.

burt
My REAL return on house over 18 years is close to or below zero without imputed rent factored in. I am too lazy to do the calculation with imputed rent (average annual rent of $24K) but I think it then turns positive.
JoeJohnson
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Re: Better to sell house ~ every 15 years?

Post by JoeJohnson »

sk.dolcevita wrote:
burt wrote:During my morning walk I am absolutely amazed at the army of service vehicles parked on the street.
This is a 1970's era neighborhood with homes in the $400,000 - $600,000 range in a medium cost of living area (south east Texas).

-plumbers
-painters
-foundation repair
-landscape
-window replacement
-pool maintenance
-HVAC
-electricians
-stone/tile
-driveway
-flooring

I guess that is what happens when people with large funds meet a large workforce.
I swear home maintenance and upgrades are a hobby for some of these people.

A home is not an investment.

burt
My REAL return on house over 18 years is close to or below zero without imputed rent factored in. I am too lazy to do the calculation with imputed rent (average annual rent of $24K) but I think it then turns positive.
Your experience fits with historical returns. The benefits of houses are having your own property, yard, no landlord. etc. And financially, no rent.
IFKC
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Re: Better to sell house ~ every 15 years?

Post by IFKC »

Bumping this old thread in case anyone has any other perspective.

Effectively, OP noted that many homes need substantial repairs around the 15 year mark, and wondered if it made sense to sell before that time. Others noted the costs averaged out per year (though this doesn't really address if someone could skip a decade or more of expenses by having a new or new-ish home with fewer issues), and still others said it seemed unlikely that a new, similar house would be had for the same price.

I bought my home around the 11 year mark, and have noticed an increasing amount of repairs necessary as it approaches 15 years. I've been told by many contractors that 15 years is when many things (appliances, a/c, etc.) tend to wear out or be past their prime. I've considered moving for other reasons (a 4,200+ new development nearby, schools, etc.), but this 15 year thing has crossed my mind a few times as well...
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JGoneRiding
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Re: Better to sell house ~ every 15 years?

Post by JGoneRiding »

I will point out something I don't think was originally, you are restarting the mortgage clock.

Basically taking all the equity out to get "new" so unless after 15 years you can afford to sell and buy and put the equity down AND only get a 15 year mortgage and the next time pay cash plus the 8% "tax" of moving. If you cant do that you are perpetually renting and loosing the major advantage of owning which is inflation controlled mortgage.
stan1
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Re: Better to sell house ~ every 15 years?

Post by stan1 »

We sold a 15 year old house that was facing probably close to $50K of replacement costs within the next 10 years (2 heaters, 2 air conditioners, water heater, appliances, stucco, some concrete replacement, replacement wood fencing, etc.). However we moved into a 20 year old house that also needed some of that work done. It is a smaller house so there are only 1 heater and 1 air conditioner. We live in a dense area that is built out so new construction really wasn't an option as the only such homes are infill developments that usually have major location defects such as proximity to high voltage lines, train tracks, freeways, etc. or are very expensive.
Warning: I am about 80% satisficer (accepting of good enough) and 20% maximizer
spammagnet
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Re: Better to sell house ~ every 15 years?

Post by spammagnet »

adamthesmythe wrote: Wed Aug 10, 2016 7:05 pmI would not expect a 20 year old house to need a roof, gutters, driveway, or air conditioning units. The major part of your expenditures seems to be attributed to items that did not last for a reasonable life span.
Depending on the type of roof, some banks require a reserve for a new roof built into the mortgage, when the roof is 20 years old.
IFKC
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Re: Better to sell house ~ every 15 years?

Post by IFKC »

JGoneRiding wrote: Sun Oct 22, 2017 11:43 am I will point out something I don't think was originally, you are restarting the mortgage clock.

Basically taking all the equity out to get "new" so unless after 15 years you can afford to sell and buy and put the equity down AND only get a 15 year mortgage and the next time pay cash plus the 8% "tax" of moving. If you cant do that you are perpetually renting and loosing the major advantage of owning which is inflation controlled mortgage.
I'm not sure I'm following the math... and why would you need a 15 year mortgage?
spammagnet wrote: Sun Oct 22, 2017 11:56 am
adamthesmythe wrote: Wed Aug 10, 2016 7:05 pmI would not expect a 20 year old house to need a roof, gutters, driveway, or air conditioning units. The major part of your expenditures seems to be attributed to items that did not last for a reasonable life span.
Depending on the type of roof, some banks require a reserve for a new roof built into the mortgage, when the roof is 20 years old.
Interesting...

Thanks all.
A happy father and tepid lawyer, trying to do the right thing
chevca
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Re: Better to sell house ~ every 15 years?

Post by chevca »

IFKC wrote: Sun Oct 22, 2017 12:10 pm
JGoneRiding wrote: Sun Oct 22, 2017 11:43 am I will point out something I don't think was originally, you are restarting the mortgage clock.

Basically taking all the equity out to get "new" so unless after 15 years you can afford to sell and buy and put the equity down AND only get a 15 year mortgage and the next time pay cash plus the 8% "tax" of moving. If you cant do that you are perpetually renting and loosing the major advantage of owning which is inflation controlled mortgage.
I'm not sure I'm following the math... and why would you need a 15 year mortgage?
If you originally had a 30 year mortgage and the sell at 15 years thing only works if you take another 30 year mortgage and so on, you will always have a mortgage. If you sell at 15 years and then take a 15 year mortgage on the new home, you're still on track to pay off the mortgage in 30 years.
DrGoogle2017
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Re: Better to sell house ~ every 15 years?

Post by DrGoogle2017 »

In my area, newer homes appreciate faster than older homes. But it depends on the builder, some newer homes are not built as well as older homes.
chevca
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Re: Better to sell house ~ every 15 years?

Post by chevca »

I think a big part of it is personal too. How much does one love their home? If it's a dream home and dream location, I'd think it's worth it to repair and upgrade some of these things and choose what materials and looks one wants on their forever home. If a home is just a roof over their head, maybe one doesn't care about making it their own and is okay with moving before big items start needing to be repaired and replaced.

I doubt anyone comes out ahead by selling to avoid costly repairs and maintenance though. If you're selling right before all this starts, any good inspector is going to note all that and the selling price probably gets adjusted accordingly. So, you avoid $30k in repairs, but take $20k less in selling price... what have you gained there, really? As mentioned, buying new each time is more costly than buying previously owned. So, there's the upgrade to new each time cost as well.
randomguy
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Re: Better to sell house ~ every 15 years?

Post by randomguy »

JGoneRiding wrote: Sun Oct 22, 2017 11:43 am I will point out something I don't think was originally, you are restarting the mortgage clock.

Basically taking all the equity out to get "new" so unless after 15 years you can afford to sell and buy and put the equity down AND only get a 15 year mortgage and the next time pay cash plus the 8% "tax" of moving. If you cant do that you are perpetually renting and loosing the major advantage of owning which is inflation controlled mortgage.
If you are buying the same price range house things pretty much work out. Imagine
you buy a 200k with 50k down. Over the next 15 years you pay off 50k of the mortage and the house doubles in value. You have a 100k mortgage and a 400k house. You can buy a 400k house and put 300k down and be in the same spot (well other than the
20k+ or so in real estate fees). If you start upsizing (i.e. the start home->dream home ), you do lost a bunch of the inflation hedging advantages. Your 400k dream home is now worth 800k. Instead of a 350k mortgage you are now looking at a 500k home.

You do exposed to interest rate risks (i.e. you have a 3% now but in 15 years the cheapest mortgage rate is 6%) but you still get the basic inflation hedge in your market.

At a certain level though this isn't going to work in general. Nobody would buy a 15 year old home for 400k if you can get an identical new house for 400k. With the new house you end up making tradeoffs (smaller lots, worse location,....) most of the time.
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