homeownership coaching

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camillus
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homeownership coaching

Post by camillus »

Hi all,

My wife and I are both "savers." We also happen to own an older home, more than 90 years old. Over the past several years we've made goals of increasing our savings rate, which we have. As I'm looking around and at our house and property this Spring, I'm noticing a lot of things need attention: cracked and crumbling driveway, rooms need painting, floors need refinishing, and so on.

I'm wondering how other bogleheads approach home ownership, specifically keeping up an older home. Do you budget a certain amount for home maintenance and then work down the project list depending on what's most important and urgent - always fixing things? Do you delay fixing things as long as you can?

I hope you get the gist of my wonderment. I'm trying to figure out the line between maximizing savings and keeping the homestead in reasonable shape.

Thanks
sixty40
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Re: homeownership coaching

Post by sixty40 »

Our home is relatively young compared to yours, only about 30 yrs old, bought it used in 2003. Since then I have replaced the roof, replaced AC and heating unit, updated front and back landscape, fixed refrigerator (sub-zero), fixed dishwasher, etc. When we were younger with smaller kids I think I did not mind putting money into the home since it is a nice home with a nice yard, but as our kids are in high school and in college I find it more difficult to spend money on the home, but I have to.

We do not budget an amount to fix things around the house, but unless it needs immediate attention I wait on it, and I spread out the major cost items from year to year. In fact we really do not "save" for anything in particular. We are just the type of people that just "enjoy" saving and we just save as much as we can, and whatever comes up comes up.

If I were to average the cost of our home ownership in just fixing and replacing things so far, I would say it is in the $2000-$2500/yr range.
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LinusP
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Re: homeownership coaching

Post by LinusP »

As with so many things in life, it's all about priorities. Here's how I think about those, from most to least important:
  1. Safety: As a parent of two young kids, this comes first for me. If I don't fix these things immediately, I mention them to my wife and mitigate them in some way.
  2. Causing further problems: If that leaking pipe could lead to mold if I don't fix it quickly, you'd better bet I'll deal with it promptly.
  3. Things that make a house your home: We don't love our kitchen, but we've done a lot of little things to make it work better for us. If you really hate that one paint color...change it. Many of these things don't take a huge amount of money or time, and together they can make a big difference in how you feel in your place.
  4. Efficiency: Some things pay for themselves pretty quickly; others feel good as small ways of "making a difference."
  5. No big deal if it breaks: If something's not in the #1 or #2 category, I'm often not that proactive about it. Who knows, maybe that fridge or water heater will last another 5 years.
  6. Luxuries: I just skip most of these.
The caveat is that if you wait too long on too many things, you might need more time/money to get the place "up to snuff" before selling, or have more unexpected "this broke, and ended up damaging that" situations.

As with investing, the more you understand what you've got and the risks involved, the better judgments you can make for your particular situation. Hope this is a helpful starting place for you.
FederalFIRE
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Re: homeownership coaching

Post by FederalFIRE »

We own an old home (~110 years) which has many of the same sorts of issues. We prioritize projects similar to how LinusP described. We don't start anything new until we know we can pay for it and have a separate money market account to accumulate for the next project. We have never diverted savings from retirement to projects, and I can only imagine doing that in an emergency. Over the past 8 years of living there we've replaced windows and resided, replaced AC/furnace, rebuilt the rotting front porch, updated the basement, and a few other small things.

For me the house is my hobby (I know, it's an expensive one). That said, I do as much work as I can myself - the AC/furnace is the only thing I totally farmed out. We also dipped into the E-fund to do this because it quit working in the middle of a hot Illinois summer.

For something like tired paint inside I would just do this out of our normal cashflow and do it myself. It's a cheap way to make things feel way nicer.
SoonerD
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Re: homeownership coaching

Post by SoonerD »

camillus wrote: Sat Mar 16, 2019 12:48 am Do you budget a certain amount for home maintenance and then work down the project list depending on what's most important and urgentYes - always fixing things Yes? Do you delay fixing things as long as you can? I prioritize safety items first then comfort items then cosmetic items. Delaying possible safety items or items that will cause further expense is a terrible idea. I even accelerate some purchases/improvement. For example, my water heater was providing less warm water per shower. We could have gotten another year or two but one day after another disappointing shower I just called 3 companies for quotes and bought what seemed like the best product/price/installation/service package. Even went with a larger tank than the old one.

I'm trying to figure out the line between maximizing savings and keeping the homestead in reasonable shape.maximizing was never my goal. Instead I tried to optimize savings. Maximizing savings would imply foregoing too many fun and pleasurable things and make life dreadful for me and my family.
SoonerD
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Re: homeownership coaching

Post by SoonerD »

If you think in terms of optimizing instead of maximizing you'll find it easier to enjoy life at a high level and have healthy investing goals. When I try to maximize (any area of life) I tend to miss out on other important aspects of life.
FederalFIRE
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Re: homeownership coaching

Post by FederalFIRE »

SoonerD wrote: Sat Mar 16, 2019 4:14 am If you think in terms of optimizing instead of maximizing you'll find it easier to enjoy life at a high level and have healthy investing goals. When I try to maximize (any area of life) I tend to miss out on other important aspects of life.
+1 I love this sentiment. Maximizing or being the "best" at something will always result in coming up short. There are almost always more expenses you could cut. Optimizing the balance that gets you on target for your goals while enjoying your life is key.
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mmmodem
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Re: homeownership coaching

Post by mmmodem »

We are savers. We don't budget for home repairs or maintenance. We take each item on a case by case basis. For nearly everything, we can pay cash for right away. There are various reasons to delay, how much more damage it will cause, what is the risk to safety. Will there be a discount if we wait, etc. Most home repair items will either increase the value of the home or maintain it. For this reason there is no need to optimize for us.

For example;
We installed granite countertops when we first moved in because we wanted it right away.

We waited until the hot water heater failed and dumped water all over the garage. We have a handyman that can install in a day and there will be no damage in the garage anyway.

We replaced all the incandescent light bulbs to LED or CFL immediately. The cost is small and the wastefulness of incandescent is terrible.

We waited until the next holiday sale before replacing a dishwasher.

So you can see there can be myriad reasons to do the upgrade/repair. The only rule we try to follow is finish what you started first before embarking on the next project. Easier said than done. I still have the Nest smart thermostat in the box because installation proved more complicated than I expected. And now I'm wondering if I should get a wood stove insert.
onourway
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Re: homeownership coaching

Post by onourway »

Our home is about 80 years old and in very good condition, but the list of projects doesn’t end. Last year we replaced a dishwasher, a fence, had the exterior painted, and did a half-way re-model of a bathroom. This year we need a bit of roof work, some masonry work outside, plus whatever else decides to show up. Obviously there is stuff that comes up that has to be fixed, but otherwise we budget every month for this stuff. It’s just part of home ownership, and I prefer to have the money saved and set aside in advance instead of feeling like it’s an ‘extra’ cost which tends to cause me to delay work longer than I should, and carry anxiety about paying for it. Having it just an operational part of our budget just makes everything easier.
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camillus
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Re: homeownership coaching

Post by camillus »

Thanks everyone. I appreciate the wisdom here. I forgot to mention that we do a zero based budget with YNAB. I think it would be helpful for us moving forward to set money aside monthly for home projects, and then work down a priority list as has been mentioned above.
adamthesmythe
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Re: homeownership coaching

Post by adamthesmythe »

I've owned old houses. There is always something that could be done to an old home. The key is to prioritize and know the difference between things that will get worse, quickly, if not fixed and those that can be ignored for a long time.

I've never budgeted, but if you live below your means then almost everything can be done out of cash flow.
quantAndHold
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Re: homeownership coaching

Post by quantAndHold »

We have a 90 year old house, that we’ve owned for 25 years.

Definitely make a prioritized list of things. LinusP’s priority list is good, but I would add that some things need to be done before others. For example, any foundation work will cause the walls to crack, so you want to do foundation work first, then patch cracks, then paint.

Once you have the list, make a five year plan. This helps in several ways. It gets the work lined up in the right order, so you’re not painting before fixing the foundation, for example. It also makes it easier to live with the stuff that isn’t done, because you have a concrete plan for getting it all done. And it helps with budgeting.

For us, we made the five year plan. It actually took us about seven years to get through it all. What we found was that we were glad that we put the cosmetic stuff last, because by the time we got to it, our tastes had changed and the major kitchen remodel we were sure we needed at the beginning wasn’t necessary. So we did a much smaller remodel.

Since then, we keep a list of the things we want to do in the next couple of years, but since we stay on top of it, the list is fairly short now.
Yes, I’m really that pedantic.
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F150HD
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Re: homeownership coaching

Post by F150HD »

was a thread somewhat identical to this in 2018

viewtopic.php?f=11&t=267831
Long is the way and hard, that out of Hell leads up to light.
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Sandi_k
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Re: homeownership coaching

Post by Sandi_k »

We too owned a home that was 80+ years old. In the ~20 years we lived there, we ended up renovating it almost from the bottom up.

Early on, when funds were very limited, I took our house inspection report, and went through it, compiling all the issues noted. I also listed things we wanted to do to make the home more enjoyable and personalized for our tastes.

So it might have included such things as: replace blinds in dining room and living room; replace worn linoleum in kitchen; add closet organizer in master bedroom; replace sink and cabinet in main bathroom; replace all padding and carpet; add handrail to kitchen porch; add drain at bottom of driveway; replace garage door; rewire house entirely; replace kitchen sink and countertops; paint all rooms; replace door hardware on interior doors; replace front door; replace roof.

We then characterized these issues as things that led to future problems (e.g., the bad wiring in the attic, the water collection at the bottom of the driveway) and prioritized those. We also grouped things that could be DIY'd for under $500 or $1000 (blind replacement and paint); things that could be done in a weekend; things that needed professional assistance. By grouping in this way, we managed to prioritize the things that caused damage, AND those things that could be done quickly. It also gave us a target for those things we couldn't easily DIY - like the wiring and the roof. So while we did a few cosmetic things, we spent our early years focused on the safety items, and the preservation of the home's integrity.
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