Over-Improving Your Personal Residence?

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Sandi_k
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Over-Improving Your Personal Residence?

Post by Sandi_k »

So, we bought a new-to-us home in 2011 - it was everything we wanted, but was in somewhat decrepit shape. Over the past 9 years, we've replaced windows, weather-sealed the exterior, replaced garage doors, painted and done limited interior updates.

The biggest issues still remain:

1) Replacing the 1985 deck - which was done with redwood, now decaying - it requires a complete teardown and replacement. It's a BIG deck. Estimates are $70k+ for a composite deck of ~ 600 SF plus railings and steps.

2) Complete teardown and reno of master bedroom and bath. The bathroom sinks are rotted out from underneath, and must be hammered out of their cemented-in tile. Carpet in bath must be ripped out an replaced with tile. Bathtub must go. Phonebooth-sized shower must be expanded. WC must be enlarged. Master bedroom reconfigured, to allow walk-in closet and removal of mirrored doors. Estimate $30k for sheetrock, tile, demolition, sinks, cabinetry, flooring.

3) Kitchen. From 1985. Dark oak cabinets with some pullouts. Cabinets are failing; hinges and roller shelves are broken and listing. Counter is cheap granite 12x12' tiles in a firmly 1970's brown palette, with a drop ceiling. If we re-do kitchen, it means expanding reno to living room, dining room and hall, as it's all one contiguous space. Sheetrock, flooring, lighting, replace stove, replace all cabinetry, countertops. Estimate $30k.

So, $130k. Current value is ~ $850k, owe $400k. Spending $130k will bring value close to max expected value of $1M. Quite likely that we would be over-improving, so that any additional upgrades will never be recouped.

Do we do what we want, regardless? If we wanted to stay in the house forever, we'd probably add an elevator, plus additional work on the gangway and dock area - additional $50k?

We're DINKS, no kids, so we could certainly just keep throwing funds at the house. At what point do you say it's ENOUGH? Or should we just invest and spend what we need to to make this our forever home, given transaction costs in buying and selling RE?

Any insights or personal stories would be appreciated.
lakpr
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Re: Over-Improving Your Personal Residence?

Post by lakpr »

I would stop at about 10% of the current market value. If your estimates exceed this figure, you will be better off selling the house as is and moving on to the next one that does tick your boxes -- assuming you did decide this is NOT your forever home. That 10% figure is arrived at by including real estate transaction costs of 6% commissions, 2% sales taxes the seller is obligated to pay, and 2% buffer.
HomeStretch
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Re: Over-Improving Your Personal Residence?

Post by HomeStretch »

It’s a personal choice.

Spouse and I chose to extensively renovate the interior and exterior of our property. It’s beautiful, comfortable and up-to-date. It’s been well worth it to us having lived here for a long time.

The only caveat I would give when deciding whether to over improve (relative to neighborhood market values) is to be aware of whether the house can be renovated to age-in-place. We have a lot of interior/exterior stairs and are not able to add an elevator. So we know eventually we will need to move if/when mobility becomes an issue.
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Tamarind
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Re: Over-Improving Your Personal Residence?

Post by Tamarind »

I'm planning to "over improve" my home soon. I deliberately bought a cheap, small home, so it's easy to cross that threshold. I really don't care as I've lived here 10 years already and intend to age in place. As others said, if you have the money without threatening retirement goals, then it's a personal choice.

Also a lot of what you're listing sounds like long-deferred maintenance. Someone would have to do most of those things eventually, unless the house became a teardown.
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Harry Livermore
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Re: Over-Improving Your Personal Residence?

Post by Harry Livermore »

Tamarind wrote: Thu Nov 12, 2020 4:25 am
Also a lot of what you're listing sounds like long-deferred maintenance. Someone would have to do most of those things eventually, unless the house became a teardown.
Agree with this.
Perhaps ask a realtor (or two) for an assessment of current value versus a "done" house in your neighborhood. Obviously you have some idea already. Certainly any buyer would use the deferred nature of updates as an excuse to lowball, regardless of what you actually price the house at. It's not rational, but neither are bidding wars ;)
If you are planning on staying for a while more, weigh the costs against how long you plan to stay. I personally think there is a sweet spot where you get a number of years in a trouble-free, beautifully updated environment, AND you still benefit from the "updates" when you sell. For me, this is about 7 years. Kitchen and bath trends won't change much, you don't have kids beating up the place, and there will be hardly any wear and tear on mechanicals. Less than 5 years? You may not get enough joy out of the process...
Sounds like we are in a similar situation; we bought our house in 2011, and while we have done a few things, there are 2 baths and a kitchen (plus the dreaded deck, but ours is ground level and will be replaced by a stone patio) left to do. However, I feel like time is running out for the "sweet spot". I'm currently 54. If we do the reno when I'm 56, and stay to 62 and then relocate to a MCOL area, that's fine. If we wait until I'm 60, I'm not so sure I wouldn't rather just sell the house at a discount; it will have served its purpose of a safe, solid, family home in an excellent school district.
Cheers
Last edited by Harry Livermore on Fri Nov 13, 2020 7:55 am, edited 1 time in total.
Stick5vw
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Re: Over-Improving Your Personal Residence?

Post by Stick5vw »

My wife and I are in the same boat. Inherited a home built in 1916 which was in dire need of some repairs - tree work around the property, put fence up in front yard, fixed front and back porch steps, converted dingy laundry / storage room into home office, repainted, bought a new fridge & stove, and now are converting run down attic into guest bedroom. Loads of other things we could do after. All in will probably spend around $50-75k when all is said and done. We would probably put these in the “long-deferred maintenance” category.

House is in a great school district about one hour away from a major city so (in our view) there is an upside should we choose to sell at some point in the future. Doubtful this will be our forever home. Nonetheless Our approach is, Why let someone else capture this upside by buying at a deep discount, when we can put in some elbow grease and (with the help of a great handyman in a few instances) fully capture that value for ourselves?

Hard to comment for sure on your situation without knowing the financials. How much did you buy the house for? Out of curiosity how did you determine the max expected value of $1mn? But if you bought for ~$400k and will put in $130k (plus whatever you’ve spent on upgrades since 2011) to realise a $1mn value I would say that’s a decent trade.

The resale value is one aspect. However, If you know you’ll be spending many more years in the house, these changes can greatly improve your happiness and quality of life. Hard to put a number on that.

Speaking with a local realtor or property assessor is another way to sanity check anything you are considering too.
ponyboy
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Re: Over-Improving Your Personal Residence?

Post by ponyboy »

I dont view my home as an investment. Ill spend whatever I want on it since what I can get out of it is completely irrelevant.
JPM
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Re: Over-Improving Your Personal Residence?

Post by JPM »

OP's home sounds like a dump from the description, so most of the $850,000 value must be in the dirt. Has a dock, so OP probably a boater with a home on water. Location then must be very good, so perhaps makes sense to tear down the dump and build what you really want unless planning to move in the near future.

A house can be an investment in some parts of the country and if the time horizon to selling it is short, improvements have to at approximately break even as personal enjoyment of the improvements is not a consideration. If the time horizon to sale is ten years or more, improvements are for your own enjoyment. Some people prefer to spend money on pricey travel, cars, or other hobbies. Or gamble. Some prefer pricey overimprovements to their homes. To each his/her own.
jsh
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Re: Over-Improving Your Personal Residence?

Post by jsh »

I live in a 1m neighborhood. The houses are only worth 350k. My relationships with my neighbors are more important to me than any house appreciation. My view is that my home is an emotional investment, the quality of my life matters more.
Old Sage(brush)
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Re: Over-Improving Your Personal Residence?

Post by Old Sage(brush) »

We’re in a HCOL area and spent substantially more than your numbers in house renovation somewhat similar to yours although ours included all new wood flooring, a new great room, artist studio and no deck. Our house after renovations is not worth the $1M you say yours would be. I would guess most advice on this forum would say don’t do it. We love our newly renovated house especially during these times and I’m glad we did it. I agree with philosophy that your home is primarily not an investment. If you’re overly concerned with the cost, could you consider reducing the deck? That’s a huge expense for a deck in my opinion. I also wonder if your numbers on other aspects of your project are low, especially the kitchen.
Jack FFR1846
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Re: Over-Improving Your Personal Residence?

Post by Jack FFR1846 »

Our house was finished in 1984 and a lot of our upgrades were to correct as much "stupidity" as possible, as the house was planned and built by a pot head who seems to have been driven by the high life. Fortunately, when it came to structural parts, he over-spec'd. The inspector burst out laughing in the basement, looking at the main beam. Said it's 4 times as big as needed.

Over the years, replaced laminate counter top with corian. Cabinets are light oak and are staying. Replaced gas stove and built in oven with electric after a house in town exploded, killing 2 kids from a gas leak. Kitchen vinyl rolled floor replaced with nice laminate tiles. Bathroom floor replaced with ceramic tiles. A solar greenhouse on the back of the house torn down and converted to a normal roof, expanding a bedroom and bathroom with hard wood in the bed, tile extended from the other bath. One of the kids' bedrooms was way too small. We added a wall/door that doubled the br size by taking a sort of sitting area. A 2 level deck was removed. Lower part replaced with composite (I would not do this again....it's like noodles and gets wavy. If you do this, triple the amount of supports). We have resisted doing "updating" because everything becomes dated looking in ten years. The house is perfectly functional. All of the above, in total cost probably $60k over the years. House value probably $600k. I'm sure a complete update could easily cost $250k and I'm sorry, but that's just stupid. We have friends who update pretty regularly, including replacing furniture. Once a decade or so. They have nothing. Make the same money we do, yet have to borrow money to do anything.
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Admiral
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Re: Over-Improving Your Personal Residence?

Post by Admiral »

My advice:

Unless you plan to sell in the near future, ignore any potential return on renovations and do what's affordable and makes you happy. It's YOU who has to live there, not someone else.

It's like buying art. Some buy as as investment, in the hope of eventual price appreciation whether they like the piece or not. Others buy because they fall in love with the piece and enjoy it, and maybe one day it will be worth more than they paid, but that's no guarantee.

I tend to fall into the second camp.
NotWhoYouThink
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Re: Over-Improving Your Personal Residence?

Post by NotWhoYouThink »

If you are meeting your savings goals, spend whatever you want on whatever you want.

If you are planning to keep the home for years, you might guess that you'd get 50% back in a sale, and the other 50% is consumption.

We under-improved our first house, because we didn't plan to stay forever. We'll probably spend $20-40K on some improvements next year that will make me happier but return little on re-sale.
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Watty
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Re: Over-Improving Your Personal Residence?

Post by Watty »

Be sure to research the composition deck carefully, They may be OK now but lots of people have had problems with them in the past.

A few expenses that you did not include in your budget.

With that much work going on you would likely want to move out for the better part of a year so be sure to also budget for paying to live someplace else too.

The with as much work as you are doing you should also plan on doing a refresh of the rest of the house and budget for doing things like refinishing any woodwork, painting, new carpets, new interior doors, and refinishing or replacing any wood or tile floors.

Also consider the age of the roof, siding, water heater, and HVAC system too. Those may be about ready to be replaced so you may want to also those replace those while all the other work is being done.

With all the work going on you may also need to redo your landscaping especially around the deck.

It is also almost certain that once the work starts they will also uncover additional work that needs to be done to so budget for that. I would not be surprised if you need to replumb or rewire the entire house since everything is 45 years old now and even if it is still functional it may not be up to current code.

You may also want to have someone inspect the sewer lines to make sure that they have no problems and have a lot of life left in them too since they are also at least 45 years old.

It might make sense to gut the entire house down to the studs and redo the whole place if you are going to do that much work anyway. That way you could also change the layout of the non-loadbearing walls. That would also make it easier to add better insulation and soundproofing if that is needed.

A potential problem with that is when you are all done you will have a remodeled 1980s house that may be very nice but it is not the same as having a new house. It would be good to at least look at doing a teardown and rebuilding from scratch. That way you would have a new modern house when you are all done.

Tearing the house down and rebuilding might also make it easier to add the elevator and do the other work. For the elevator you could just have a place designed for it that are closets now then you could easily add the elevator if it is ever needed. Even if you just do the remodel that you are thinking about it would be good to design in the future elevator now so you run into fewer problems if you do ever add the elevator.
JPM wrote: Thu Nov 12, 2020 7:04 am OP's home sounds like a dump from the description, so most of the $850,000 value must be in the dirt.
+1

It would be good to find out just how much of the value is in the land and to get an objective opinion about what the house will be worth when you are done.

Also consider if buying a better house that does not need major remodeling would be an option. A huge advantage of this is that you could be in it in a few months.

It would apply to such a major remodel too but there is an old joke, "The final step in building a custom home is to file the divorce paperwork." Don't underestimate how much stress there will be if you are dealing with such a major remodel for the next year.

A big question is what your personal finances are like. If you have a couple of million in the bank a lot of what to do would a personal choice.
Last edited by Watty on Thu Nov 12, 2020 8:20 am, edited 2 times in total.
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Sandtrap
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Re: Over-Improving Your Personal Residence?

Post by Sandtrap »

Thoughts:

1. If you spent all of what you say and did all the improvements, then had to move in 5-8 years, would you be okay with that?

2. If you go ahead with all of the improvements and the end total cost is 75% more than what you expected, is that okay?

3. If you found another residence nearby or in the region that had everything the way you want and is in a beautiful location, would you switch with the one you have and not do any renovations and so forth?

4. Have you recently looked at listings in your area or region for a better "forever home"?
(sometimes this is a good option to be aware of, what's for sale now?)

5. Financially. Are you so secure and "well off" financially that none of the above is a concern?

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Nowizard
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Re: Over-Improving Your Personal Residence?

Post by Nowizard »

I think I would start by getting other estimates on the deck cost. In my opinion, the broader question is the cost vs. emotional gain from what you have done once you get beyond necessary repairs on items such as wiring, roof repairs/replacement, etc. There are circumstances where the emotional gain exceeds cost. After all, money is to use in a logical manner. Some do discover when they begin to think of major additions/renovations such as adding a pool that they ultimately choose to purchase a different home already containing the desired items after analyzing overall expenses.

Tim
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TomatoTomahto
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Re: Over-Improving Your Personal Residence?

Post by TomatoTomahto »

What Sandtrap said, especially #5.

We “over improved” our house. We put in roughly 50% of what we paid for it in improvements. I hope that for every dollar of renovations, our heirs will see $0.50 in increased selling price. If they don’t, them’s the breaks.

It would be difficult to install an elevator (never say never), but I think we would move caretaker(s) into the very nice master suite and move ourselves down into the ground floor bedrooms, if and when the time comes. All bathrooms have Toto washlet toilets and showers wide enough (and with no threshold) to allow wheel chair access. The detached garage is nearby, and we could always pave the path.

A design goal was to make the house ADA compliant while making it more up-to-date and pleasant. We also did a lot of insulating and upgrading the electrical/solar/HVAC. Our house is where we live, not an investment. It’s also a reward for our LBYM.
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gr7070
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Re: Over-Improving Your Personal Residence?

Post by gr7070 »

Tamarind wrote: Thu Nov 12, 2020 4:25 am Also a lot of what you're listing sounds like long-deferred maintenance. Someone would have to do most of those things eventually, unless the house became a teardown.
This. You're not over-improving. That would be adding 1500 sf to a 1500 sf home. Or adding a 70,000 deck to as 200,000 home.

You're simply updating outdated rooms, and presumably appropriate deck.

FYI now is not the market to make these changes sure to Covid-19. You'll pay a premium.

I would be very careful assuming my 130,000 spent would increase the value of house by 130,000. That's highly unlikely. I'd be careful that is only 130k, as well.

It is reasonable to ask would one be better off taking the 850k adding your 130k to that and buying a 980k house? Would that 980k house be substantially better than the current house plus renovations? That's the question to ask.
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JDCarpenter
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Re: Over-Improving Your Personal Residence?

Post by JDCarpenter »

Agree that if you are meeting your financial goals and will continue to do so regardless, spend (rather than "invest") the money on the house if you are highly likely to stay there for a while and it would contribute to your enjoyment more than getting another place.

We represent somewhat of a worst case on this, and don't regret it much. In the early 90s, bought a nice old mini-mansion on one of the best lots in the nicest neighborhood in our little town, with the intent that it be our "die in" house. Over the course of a decade, we greatly improved it--to the tune of an additional150% of the original purchase price in improvements/additions--with me doing a plurality of the work myself. Then, we unexpectedly had to move and "lost" a bit more than a year's income on the house sale even though we sold for twice our original purchase price.

Maybe it caused us to retire at 57 rather than 55 or 56? But the experience/learning made the gut rehab of our present house and its ongoing minor repairs a breeze. And we enjoyed living and entertaining at that level for the time we had it. (Albeit, we've scratched that itch and have had no desire to do it again!)
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Cigarman
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Re: Over-Improving Your Personal Residence?

Post by Cigarman »

Kitchens and Baths sell homes...I would definitely do those upgrades. We did ours over the last 5 years and can't help but think that help sell our house, even in a hot market, compared to others in my area that were for sale (sold in 24 hours at 20k over asking).

I get it is a large deck and not familiar with the cost of composite but 70k? I had a pressure treated wood deck at 300 square feet and maintained it yearly and still good as new. You might want to reconsider the material for the deck...just my 2 cents.
Mike Scott
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Re: Over-Improving Your Personal Residence?

Post by Mike Scott »

How long are you planning to stay in the house? Can you do any of the work yourself? Can you break the work into smaller pieces and prioritize them over time?
OnTrack2020
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Re: Over-Improving Your Personal Residence?

Post by OnTrack2020 »

Sandi_k wrote: Thu Nov 12, 2020 3:31 am So, we bought a new-to-us home in 2011 - it was everything we wanted, but was in somewhat decrepit shape. Over the past 9 years, we've replaced windows, weather-sealed the exterior, replaced garage doors, painted and done limited interior updates.

The biggest issues still remain:

1) Replacing the 1985 deck - which was done with redwood, now decaying - it requires a complete teardown and replacement. It's a BIG deck. Estimates are $70k+ for a composite deck of ~ 600 SF plus railings and steps.

Our house is probably around the same age as yours. Our deck was not sturdy when we bought house and we replaced. Husband did the vast majority of work (of course, we were younger then), and it is a large wrap-around deck. Can you somehow make the deck smaller? We did not do composite. $70k is a lot of money.

2) Complete teardown and reno of master bedroom and bath. The bathroom sinks are rotted out from underneath, and must be hammered out of their cemented-in tile. Carpet in bath must be ripped out an replaced with tile. Bathtub must go. Phonebooth-sized shower must be expanded. WC must be enlarged. Master bedroom reconfigured, to allow walk-in closet and removal of mirrored doors. Estimate $30k for sheetrock, tile, demolition, sinks, cabinetry, flooring.

If you are looking to sell, I would definitely put money into this area, especially the bathroom; however, I would not start enlarging areas and ripping down walls. I would replace sink and cabinet/countertop, put in new flooring tiles, toilet, upgrade bathtub, upgrade shower without expanding. Unless things are just totally non-functional, I would keep the same layout, just upgrade bathroom and maybe new paint for bedroom. Keep the costs down.

3) Kitchen. From 1985. Dark oak cabinets with some pullouts. Cabinets are failing; hinges and roller shelves are broken and listing. Counter is cheap granite 12x12' tiles in a firmly 1970's brown palette, with a drop ceiling. If we re-do kitchen, it means expanding reno to living room, dining room and hall, as it's all one contiguous space. Sheetrock, flooring, lighting, replace stove, replace all cabinetry, countertops. Estimate $30k.

Kitchen re-dos are a large expense. Am assuming you will want to add new appliances also. I would put money into this area also.

So, $130k. Current value is ~ $850k, owe $400k. Spending $130k will bring value close to max expected value of $1M. Quite likely that we would be over-improving, so that any additional upgrades will never be recouped.

Do we do what we want, regardless? If we wanted to stay in the house forever, we'd probably add an elevator, plus additional work on the gangway and dock area - additional $50k?

If you do not want to stay in the house, I would just do the basic upgrades to get it ready to sell. More than likely, buyer would change it around anyway.

We're DINKS, no kids, so we could certainly just keep throwing funds at the house. At what point do you say it's ENOUGH? Or should we just invest and spend what we need to to make this our forever home, given transaction costs in buying and selling RE?

Any insights or personal stories would be appreciated.
The 19th hole
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Re: Over-Improving Your Personal Residence?

Post by The 19th hole »

ponyboy wrote: Thu Nov 12, 2020 6:55 am I dont view my home as an investment. Ill spend whatever I want on it since what I can get out of it is completely irrelevant.
This.
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Re: Over-Improving Your Personal Residence?

Post by Broken Man 1999 »

ponyboy wrote: Thu Nov 12, 2020 6:55 am I dont view my home as an investment. Ill spend whatever I want on it since what I can get out of it is completely irrelevant.
I mostly feel the same way. We have put a lot of $$ in our home over the last 30+ years.

This house works so long as it meets our needs. No desire on DW's or my part to move.

We like living in a nice home, it isn't showy, or glitzy, but very comfortable.

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Re: Over-Improving Your Personal Residence?

Post by tmcc »

Sandi_k wrote: Thu Nov 12, 2020 3:31 am So, we bought a new-to-us home in 2011 - it was everything we wanted, but was in somewhat decrepit shape. Over the past 9 years, we've replaced windows, weather-sealed the exterior, replaced garage doors, painted and done limited interior updates.

The biggest issues still remain:

1) Replacing the 1985 deck - which was done with redwood, now decaying - it requires a complete teardown and replacement. It's a BIG deck. Estimates are $70k+ for a composite deck of ~ 600 SF plus railings and steps.

2) Complete teardown and reno of master bedroom and bath. The bathroom sinks are rotted out from underneath, and must be hammered out of their cemented-in tile. Carpet in bath must be ripped out an replaced with tile. Bathtub must go. Phonebooth-sized shower must be expanded. WC must be enlarged. Master bedroom reconfigured, to allow walk-in closet and removal of mirrored doors. Estimate $30k for sheetrock, tile, demolition, sinks, cabinetry, flooring.

3) Kitchen. From 1985. Dark oak cabinets with some pullouts. Cabinets are failing; hinges and roller shelves are broken and listing. Counter is cheap granite 12x12' tiles in a firmly 1970's brown palette, with a drop ceiling. If we re-do kitchen, it means expanding reno to living room, dining room and hall, as it's all one contiguous space. Sheetrock, flooring, lighting, replace stove, replace all cabinetry, countertops. Estimate $30k.

So, $130k. Current value is ~ $850k, owe $400k. Spending $130k will bring value close to max expected value of $1M. Quite likely that we would be over-improving, so that any additional upgrades will never be recouped.

Do we do what we want, regardless? If we wanted to stay in the house forever, we'd probably add an elevator, plus additional work on the gangway and dock area - additional $50k?

We're DINKS, no kids, so we could certainly just keep throwing funds at the house. At what point do you say it's ENOUGH? Or should we just invest and spend what we need to to make this our forever home, given transaction costs in buying and selling RE?

Any insights or personal stories would be appreciated.
$70k for a composite deck is insane. You wont get that back. Similarly , $30k seems really low for a master bed and master bath gut and remodel.

Dock could be SIGNIFICANTLY more... is it a floating walk out? Or are there concrete pylons ? Is there a seawall? Seawall repair costs will blow your mind.

Also... dont underestimate how miserable it will be to live through interior gut work. Bringing down ceilings is messy and dusty. The insulation and drywall dust will be everywhere and in everything. Cutting concrete slab or foundation is also extremely messy if you're repiping bathrooms plus.. silica dust is really bad for you.

I am writing this from a hotel while my kitchen, living, dining are being done - almost exact same scenario you noted. I made it through 1 day of them ripping out the tile flooring. Even that dust from that was too much. I can't even imagine living through ceilings coming down in the main living area.

Plus also consider the design continuity of doing the jobs piecemeal versus in one swoop. But if you're DINKs maybe you can just go on vacation for a few months and come back to a completed project? Risk there is that contractors cut corners. If you let them go cost plus, they'll take their sub's pricing and just tack on their fee. If they bid it , the temptation to value engineer the job unless supervised by you will be all too real. Maybe just demo the whole house and rebuild? Thats what I should have done.

Good luck.
Ependytis
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Re: Over-Improving Your Personal Residence?

Post by Ependytis »

As others have said if your going to live in your house more than 5 years, then the upgrades are a personnel choice. I was surprised when I took my then grade school son out for Halloween years ago and how all of the houses we went to look like they were from Better Homes and Gardens. This was an above average neighborhood but nothing over 2300 ft.² in a high cost of living area. I think the home improvement shows and stores have influenced people to upgrade their homes.

From purely a financial point of view, beyond maintenance for a non-custom home, you maybe able to sell the home sooner with upgrades but you will get 50% return on your investment. That doesn’t seem very Boglehead like to me.
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Re: Over-Improving Your Personal Residence?

Post by afan »

This is consumption spending. Anything that is not a repair is consumption spending.
You could try to get an idea of whether the current condition of the house is depressing the price. For some houses in some neighborhoods, big renovations can bring a house up to the surrounding standard and one might recover much of the cost. These sorts of upgrades pay off the most if you sell while the renovations are new. Styles change, particularly for kitchens. some of the very things to which you object would have been in style when they were done.

The prices for a complete master bedroom and bath renovation and for kitchen renovation seem almost comically low based on my experience. I don't think we could renovate our kitchen, replace countertops and install all new appliances for the price you are estimating for the master suite and kitchen combined. If you have a reliable builder who will do all of that for that price, good for you. If not, you may be seriously underestimating the cost.

If you can EASILY afford the cost and you really want all these changes, and the disruption they entail- then go for it.
I would ignore the resale issue if you are going to be there long term (10 years or more). If you are planning to sell, then choose your renovations to match a common look for houses of your kind, in your neighborhood and not to match your tastes. Plan to sell not long thereafter.

It is not likely to pay off financially versus selling as is, even if you get the work done well at the prices you are estimating.
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Re: Over-Improving Your Personal Residence?

Post by afan »

Note that much of this does not *need* to be done. You may just need to tighten some screws on your kitchen cabinets. If they are really shot, hinges and rollers are easily replaced for at most a few dollars each. Solid oak cabinets will last beyond the next century and well into the 2200's. 1985 is practically brand new. You make not like the look, but it hardly needs to be replaced.

Not a problem if you can afford it. Just do not convince yourself that something you *want* to do is somehow necessary.
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Re: Over-Improving Your Personal Residence?

Post by veindoc »

Shame. Sounds like you overpaid for the house based on the amount of work that needs to be done. I could deal with outdated. I don’t know about broken.

My kids bath was outdated. We lived with it for 9 years. Then the shower leaked. Could have just replaced the shower but I seized upon the opportunity and next thing you know said bathroom was guttted.

Only regret with doing it that way is that every year it seems like we have a project. Might be better to just rip off the bandaid.
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Re: Over-Improving Your Personal Residence?

Post by FIREchief »

In 2018 we finally came to grips with the need to start upgrading our 20+ year "forever home." We started with obtaining quotes to redo the master bath. It was scary. Long story short.... the house is gone and I'm now happily sitting in a very nice new construction apartment that has wide doorways and no stairs. 8-)

That said, I fully appreciate those who want to pay/endure the price of admission for their forever home. It's just not for everybody. :D
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Re: Over-Improving Your Personal Residence?

Post by musicmom »

We've been moderately overimproving our small retirement home for the last two years.
About half done.
Widened and repaved driveway.
Built a beautiful stone wall and paver walkway from drive to rear entry.
Complete reno of our one full bath, walkin shower replaced tub.
Replaced vinyl floor in kitchen/eat in area with wood look porcelain.
Next up is painting solid but ugly oak kitchen cabinets.
Painting exterior.
Maybe new HVAC to update functioning but ancient furnace and AC.

All other homes in neighborhood are larger and very well maintained.
We're unconcerned about resale, not relocating. Hoping DH and I will enjoy a long retirement in a home customized for us.
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Re: Over-Improving Your Personal Residence?

Post by 123 »

Sandi_k wrote: Thu Nov 12, 2020 3:31 am ...The biggest issues still remain:

1) Replacing the 1985 deck - which was done with redwood, now decaying - it requires a complete teardown and replacement. It's a BIG deck. Estimates are $70k+ for a composite deck of ~ 600 SF plus railings and steps.
...
Is replacing the deck to the same (presumed) size and layout your best option? An expan$ive deck can be de$ireable but so can a smaller cozier deck depending on what works with the space that's left (patio or landscaping)? Does the current deck dominate the house/yard (or is that desireable)?

It just seems that, given that some of property value has to be ascribed to the value of land, the cost of deck replacement just seems to be overwhelming.
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Re: Over-Improving Your Personal Residence?

Post by oldmotos »

I had a similar size cedar deck that was built in 1980 that I was able to fix up by just replacing the decking with 5/4 x 6 treated wood as the joists and posts were in good condition. Pretty easy work so I hired a handyman at 1/2 the cost of a carpenter. I don't remember the cost but it probably was under $3000.
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Re: Over-Improving Your Personal Residence?

Post by sergeant »

You do have the prop 13 angle so it may make sense to stay and make the improvements instead of moving to a more desirable place. The recent passage of prop 19 may make the move more beneficial though. I think that you have grossly under priced the costs of this work, unless you are doing the labor. I do almost everything myself and your quotes seem like just the material costs.
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Re: Over-Improving Your Personal Residence?

Post by unclescrooge »

Sandi_k wrote: Thu Nov 12, 2020 3:31 am So, we bought a new-to-us home in 2011 - it was everything we wanted, but was in somewhat decrepit shape. Over the past 9 years, we've replaced windows, weather-sealed the exterior, replaced garage doors, painted and done limited interior updates.

The biggest issues still remain:

1) Replacing the 1985 deck - which was done with redwood, now decaying - it requires a complete teardown and replacement. It's a BIG deck. Estimates are $70k+ for a composite deck of ~ 600 SF plus railings and steps.

2) Complete teardown and reno of master bedroom and bath. The bathroom sinks are rotted out from underneath, and must be hammered out of their cemented-in tile. Carpet in bath must be ripped out an replaced with tile. Bathtub must go. Phonebooth-sized shower must be expanded. WC must be enlarged. Master bedroom reconfigured, to allow walk-in closet and removal of mirrored doors. Estimate $30k for sheetrock, tile, demolition, sinks, cabinetry, flooring.

3) Kitchen. From 1985. Dark oak cabinets with some pullouts. Cabinets are failing; hinges and roller shelves are broken and listing. Counter is cheap granite 12x12' tiles in a firmly 1970's brown palette, with a drop ceiling. If we re-do kitchen, it means expanding reno to living room, dining room and hall, as it's all one contiguous space. Sheetrock, flooring, lighting, replace stove, replace all cabinetry, countertops. Estimate $30k.

So, $130k. Current value is ~ $850k, owe $400k. Spending $130k will bring value close to max expected value of $1M. Quite likely that we would be over-improving, so that any additional upgrades will never be recouped.

Do we do what we want, regardless? If we wanted to stay in the house forever, we'd probably add an elevator, plus additional work on the gangway and dock area - additional $50k?

We're DINKS, no kids, so we could certainly just keep throwing funds at the house. At what point do you say it's ENOUGH? Or should we just invest and spend what we need to to make this our forever home, given transaction costs in buying and selling RE?

Any insights or personal stories would be appreciated.
I would be amazed if you could get even $750k for your house in this condition. Only a professional home flipper would buy it and they will double estimated costs to account for unforseen issues and then tack on a profit margin. So you are probably looking at $1 million - ($130k*2 repairs) - $100k profit - $40k closing costs = $600k as an offer on your house.

I would make the upgrades if you can afford it.

Regarding your $70k estimate for a deck, it sounds outrageous, but likely realistic. I got quotes for half that for a deck half the size. I ended up doing a concrete patio instead for a fraction of the cost of a wood deck. But I had to be the GC on the project.

If you are willing to be the GC, you can save large amount of money on these repairs.
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Re: Over-Improving Your Personal Residence?

Post by gblack »

I recently did an over-improve remodel on my home. I know I'd only get about 50% back if I sold right now. And I think it was worth it. House is bigger, laid out in a way that makes more sense for us, added a bathroom, space, and all new stuff to kitchen, got new lighting and wiring, roof, re painted exterior -- a ton of stuff.

If you have the money, I'd say do it for the lifestyle improvement. Sure, maybe we'd achieve FI 2-4 years earlier had we not done the improvement, but I figure I'll have 5-50 more years of improved life in the house because of the remodel. And I'm in no real hurry to stop working. Just more about what you value at this point in your life.

The only caveat, as someone else mentioned is overbuilding for the neighborhood or lot size, style of your area. But it doesn't sound like any of the stuff you are doing is even close to that. Although deck does seem overpriced - maybe get other quotes.
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Re: Over-Improving Your Personal Residence?

Post by Sandi_k »

lakpr wrote: Thu Nov 12, 2020 4:15 am I would stop at about 10% of the current market value. If your estimates exceed this figure, you will be better off selling the house as is and moving on to the next one that does tick your boxes -- assuming you did decide this is NOT your forever home. That 10% figure is arrived at by including real estate transaction costs of 6% commissions, 2% sales taxes the seller is obligated to pay, and 2% buffer.
That's not possible in this instance. We have a weird house in a specific neighborhood. It was custom-built, and we literally bought the only house in the development with certain characteristics. It has a three car garage (one RV height), and DH has installed a car lift for his restoration hobby.

There is also a fully excavated basement workroom space that no other house in the development has. Apparently, as part of the custom build, the first owner chose to elevate the house a bit, and then dug deep into the lot to give a true two stories; one for the house, and the ground area for the garages and the extra workspace. We cannot find this anywhere else in the development.

So nope - not moving. Thus my question.
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Re: Over-Improving Your Personal Residence?

Post by Sandi_k »

HomeStretch wrote: Thu Nov 12, 2020 4:17 am It’s a personal choice.

Spouse and I chose to extensively renovate the interior and exterior of our property. It’s beautiful, comfortable and up-to-date. It’s been well worth it to us having lived here for a long time.

The only caveat I would give when deciding whether to over improve (relative to neighborhood market values) is to be aware of whether the house can be renovated to age-in-place. We have a lot of interior/exterior stairs and are not able to add an elevator. So we know eventually we will need to move if/when mobility becomes an issue.
Yep - part of the planned expense would be adding in an elevator. We've already priced it, and the home can accommodate one.
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Re: Over-Improving Your Personal Residence?

Post by Sandi_k »

Tamarind wrote: Thu Nov 12, 2020 4:25 am I'm planning to "over improve" my home soon. I deliberately bought a cheap, small home, so it's easy to cross that threshold. I really don't care as I've lived here 10 years already and intend to age in place. As others said, if you have the money without threatening retirement goals, then it's a personal choice.

Also a lot of what you're listing sounds like long-deferred maintenance. Someone would have to do most of those things eventually, unless the house became a teardown.
Oh, I agree. But it's "replace the rotted redwood deck with a deck costing $40k" vs. "spend $70k and install the UV-resistant plastic deck we prefer." And "tear out the master bathroom, don't change any walls, leave the tub and excruciatingly small shower for $15k" vs "tear it all down to the studs and reconfigure the master bathroom without a tub, a real shower, an appropriately-sized WC and a few new amenities such as tile for $30k."

Unimproved, our house could sell for $850k. With the improvements done inexpensively, it's probably worth $950k. With the improvements *we* would put in, we could easily sink $150k, and not move the needle much past $950k.

So we're clearly at a point of quickly diminishing returns. We've already done some extensive upgrades: all windows and doors, replaced the rotted front steps, swapped out the wood siding with stucco, repaired the roof....we got it pretty cheaply in 2010, so we do have some wiggle room...but we have nitpicky tastes, and they tend to skew towards high quality. While our DIY chops have meant we've been able to put a lot of sweat equity in, at some point, we are running the risk of over-improving.

Just wondering how others have reconciled the conundrum themselves.

And to be clear - retirement is on track.

It's just odd, actually contemplating upgrades that might not have much of an ROI. After 30 years of thinking in the ROI vein for our housing projects, it's weird to be thinking - "Hey, yes, let's put in an elevator to be able to stay here in our older years, and who cares if if adds value to the house?"
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Re: Over-Improving Your Personal Residence?

Post by Sandi_k »

Old Sage(brush) wrote: Thu Nov 12, 2020 7:37 am We’re in a HCOL area and spent substantially more than your numbers in house renovation somewhat similar to yours although ours included all new wood flooring, a new great room, artist studio and no deck. Our house after renovations is not worth the $1M you say yours would be. I would guess most advice on this forum would say don’t do it. We love our newly renovated house especially during these times and I’m glad we did it. I agree with philosophy that your home is primarily not an investment. If you’re overly concerned with the cost, could you consider reducing the deck? That’s a huge expense for a deck in my opinion. I also wonder if your numbers on other aspects of your project are low, especially the kitchen.
The low numbers include a lot of sweat equity. We renovated our first home pretty much from the bottom up, and we have great skills: DH has fantastic DIY skills, and we've tiled, drywalled, re-wired, demo'd, painted, laid flooring....

We also have a contractor we've worked with on some of the previous projects, such as when we replaced all the windows and doors in the house. Original quote for the 25 windows was ~ $30k for Marvin Integrity. I found a shop in a more rural area that didn't have Bay Area pricing, and got the windows for $15k, plus $200 per window for installation; we saved $10k just by shopping hard and knowing how to leverage having a contractor who quoted per window rather than per job.

In the renovation of the kitchen, the cabinets and countertops will be the expensive part; it's a very small kitchen, so the cabinets will intrude into the current soffit to give us one additional shelf in all cabinets. We've already replaced all the appliances.

In regards to the deck - our nextdoor neighbor replaced her deck 2 summers ago. She paid $50k to have it done in redwood. Our deck is larger; on the water, so pilings for support and understructure will be critical. I'm afraid I am *underestimating* that deck cost, as my spouse would prefer to use AZEK instead of redwood. On things like this, he is pretty unwilling to compromise, so it's on me to find it more inexpensively, which I can usually do for things like tile and cabinets.

So while there can be some fluctuation, I'm fairly confident that we're in the ballpark.

We love our home too; I understand that it's not an investment, but I also don't want to be insane. ;)
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Re: Over-Improving Your Personal Residence?

Post by Sandi_k »

JPM wrote: Thu Nov 12, 2020 7:04 am OP's home sounds like a dump from the description, so most of the $850,000 value must be in the dirt. Has a dock, so OP probably a boater with a home on water. Location then must be very good, so perhaps makes sense to tear down the dump and build what you really want unless planning to move in the near future.
Nope, not a dump. Just 35 years old, and the previous owners haven't maintained it well. We're slowly working our way into both basic upkeep, weatherproofing, and then upgrading to more our style. A climbing wall made out of fake rock is not my preferred LRm decor. ;)

Also, not tearing it down. Construction costs in our area are well over $350 SF; it would literally cost more to tear down and rebuild than it would to judiciously upgrade.
JPM wrote: Thu Nov 12, 2020 7:04 amA house can be an investment in some parts of the country and if the time horizon to selling it is short, improvements have to at approximately break even as personal enjoyment of the improvements is not a consideration. If the time horizon to sale is ten years or more, improvements are for your own enjoyment. Some people prefer to spend money on pricey travel, cars, or other hobbies. Or gamble. Some prefer pricey overimprovements to their homes. To each his/her own.
We expect to be here at least another 10 years. We've been here 9.5 thus far. And I still don't have a master bathroom sink that I can use, because everything else was in even more disrepair. I will not leave this house before getting to use the master bath with some enjoyment. :D
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Re: Over-Improving Your Personal Residence?

Post by momvesting »

It's hard to tell without being familiar with your area, but you absolutely must keep the upgrades in line with a buyer's expectations for a house in your area and price range. For example, in my area, a million dollar house must have at least granite countertops while quartz is an expensive upgrade that you probably won't recoup your investment on and is not expected. Also, if you are redoing the kitchen entirely, can you use box store prefab cabinets? They look cheap when spacers are needed because they aren't exactly the right size, but if you choose the cabinetry first, you can make the kitchen fit the cabinets. Same with the bathroom vanities, you can save by not going custom but appearing custom if they perfectly fit in the space. Also, on items you aren't really picky about, go with cheaper options where they are adequate for your area and house price. For example, I would not put laminate flooring in a million dollar home, but there are many tile options that are attractive and inexpensive, but in some areas of the country, tile is reserved for bathrooms and laundry rooms while other areas have entire homes with tile flooring. You have to do what is typical in your locale. Good luck!
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Re: Over-Improving Your Personal Residence?

Post by Sandi_k »

Stick5vw wrote: Thu Nov 12, 2020 5:31 am My wife and I are in the same boat. Inherited a home built in 1916 which was in dire need of some repairs - tree work around the property, put fence up in front yard, fixed front and back porch steps, converted dingy laundry / storage room into home office, repainted, bought a new fridge & stove, and now are converting run down attic into guest bedroom. Loads of other things we could do after. All in will probably spend around $50-75k when all is said and done. We would probably put these in the “long-deferred maintenance” category.
Yep - we've done a lot of the little things, but the bigger things are...bigger. And more expensive. We've delayed on things that are not "necessary" - because we only want to do them once, instead of once cheaply, and then again later with aesthetic choices more to our taste.
Stick5vw wrote: Thu Nov 12, 2020 5:31 amHard to comment for sure on your situation without knowing the financials. How much did you buy the house for? Out of curiosity how did you determine the max expected value of $1mn? But if you bought for ~$400k and will put in $130k (plus whatever you’ve spent on upgrades since 2011) to realise a $1mn value I would say that’s a decent trade.

The resale value is one aspect. However, If you know you’ll be spending many more years in the house, these changes can greatly improve your happiness and quality of life. Hard to put a number on that.

Speaking with a local realtor or property assessor is another way to sanity check anything you are considering too.
Bought for $550k
Improvements spent to date: $100k (replaced all aluminum single-pane windows and sliding doors with fiberglass dual-paned Marvin Integrity; replaced three garage doors; replaced rotted front steps with tiled front steps; added handrail per code; stuccoed exterior; painted all new window trim; repaired damaged metal roof; added exterior lighting; painted all interior spaces; replaced carpet; replaced window coverings in LRm and Master bedroom). Replaced fridge and dishwasher; replaced HVAC after repeated breakdowns of the 1985 furnace and AC units.

So the major systems are now good and weather tight.

I keep an eye on resale in the neighborhood, and I'm friends with a local realtor who assures me I'm thinking about it right. Because we're in a waterfront community, comps are pretty clear and limited: for those who have done minor refreshes of the kitchen and bath, houses in our location and approximate square footage would sell for $850k. If we did a little cosmetic work on the deck and master bathroom, we could probably get $950k. But because we're on a through-road instead of a cul-de-sac in the development, I think it unlikely that we'd be able to go much above $1M.

However, we do have custom aspects that even the appraiser for our refi (who used to live here!) didn't know how to value: the dugout "basement" behind the garage stalls, and the RV-height stall that allows a car lift - while there are some houses with the RV stall, we are apparently the only house in the development with the added basement area. Neither my realtor friend, the appraiser who's been doing them for more than a decade here, nor our own realtors have ever seen another house in the area with the basement addition we have.

A custom-built home was completed on an empty lot five lots up our street in 2015. GORGEOUS house, with craft details like flagstone walkway, an upgraded deck, and updated finishes throughout. The couple sold out over the summer, and they got $1.4M for a 3,000 SF, 4 Brm, 3.5 ba house. They paid $329k for the lot, and spent ~ $800k on construction. Including the lot, that's ~ $465/SF

Ours is 2400 SF, 3 Brm, 3 ba. Our lot is 50% bigger, but our dock is smaller. $465 x 2400 = $1,120,000 - and that would mean that the deck, the dock, the house, the landscaping would all need to be top shelf to get that kind of price.

We plan to be here another 10 years or so. Assuming sale costs of $75k (including RE commissions and transfer taxes), we really have about $200k to spend on any further renovations before we've sunk more into it than we can get out of it.

It is helpful to see others' thinking on the matter. We're definitely not in the "our primary house is an investment!" camp, but we're also pretty tight with a buck, so I like a gameplan and a budget. ;)
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Re: Over-Improving Your Personal Residence?

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oldmotos wrote: Thu Nov 12, 2020 7:39 pm I had a similar size cedar deck that was built in 1980 that I was able to fix up by just replacing the decking with 5/4 x 6 treated wood as the joists and posts were in good condition. Pretty easy work so I hired a handyman at 1/2 the cost of a carpenter. I don't remember the cost but it probably was under $3000.
The supports on the deck are NON-PRESSURE TREATED lumber. In 1985, that was apparently common. The deck was also constructed using nails, not screws. Over time, water has penetrated the joists, by following the nails into the heart of the wood, and now they're rotting the wood from the inside out, and softening/sinking. So the top deck is now "popping" nails when it's walked on. We've screwed down most of the deck as a short-term measure; at some point, we need to bite the bullet and start again from the ground up.
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Re: Over-Improving Your Personal Residence?

Post by Sandi_k »

Watty wrote: Thu Nov 12, 2020 8:09 am Be sure to research the composition deck carefully, They may be OK now but lots of people have had problems with them in the past.
Sorry, I've been corrected; apparently it's plastic decking with UV inhibitors in it, not composite. We used the material in our "old" house in 2010, and now that's what DH wants to use.
Watty wrote: Thu Nov 12, 2020 8:09 amA few expenses that you did not include in your budget.

With that much work going on you would likely want to move out for the better part of a year so be sure to also budget for paying to live someplace else too.
Nope, we stayed in our old house while renovating, and slept in the basement. This house would allow us the same, with the added benefit of a full bathroom off the garage. ;)
Watty wrote: Thu Nov 12, 2020 8:09 amThe with as much work as you are doing you should also plan on doing a refresh of the rest of the house and budget for doing things like refinishing any woodwork, painting, new carpets, new interior doors, and refinishing or replacing any wood or tile floors.
N/A to the woodwork; we would do the painting; we've already replaced the paint and carpet and baseboards in the other rooms not specified. Interior doors do need to be replaced, but they're standard size, and hollow core; not a deal breaker, and can be added later.
Watty wrote: Thu Nov 12, 2020 8:09 amAlso consider the age of the roof, siding, water heater, and HVAC system too. Those may be about ready to be replaced so you may want to also those replace those while all the other work is being done.
All are already done. We focused first on the home systems.
Watty wrote: Thu Nov 12, 2020 8:09 amWith all the work going on you may also need to redo your landscaping especially around the deck.
There is no landscaping around the deck. It literally goes from the LRm slider all the way to the water line. We have oleander bushes to screen the upper deck from neighbors. In this neighborhood, it's normal for the back "yards" to be deck and dock only.
Watty wrote: Thu Nov 12, 2020 8:09 amIt is also almost certain that once the work starts they will also uncover additional work that needs to be done to so budget for that. I would not be surprised if you need to replumb or rewire the entire house since everything is 45 years old now and even if it is still functional it may not be up to current code.
We already had the walls open when we replaced all the windows and stuccoed the exterior. There was one small area of wood rot near the Living Room slider. It's in remarkably good condition. The plumbing and wiring are up to date; we added a charging station a couple of years back for DH's electric car, and he's an electrician by trade. The plumbing is all accessible from the basement, and it is up to code.
Watty wrote: Thu Nov 12, 2020 8:09 amYou may also want to have someone inspect the sewer lines to make sure that they have no problems and have a lot of life left in them too since they are also at least 45 years old.
CA requires a lateral inspection upon purchase. All good.
Watty wrote: Thu Nov 12, 2020 8:09 amIt might make sense to gut the entire house down to the studs and redo the whole place if you are going to do that much work anyway. That way you could also change the layout of the non-loadbearing walls. That would also make it easier to add better insulation and soundproofing if that is needed.
Nope. The office, the guest bedroom, the laundry and hall bath areas are all fine. The Living room and DRm are good, with the exception of swapping out the laminate flooring. The main hallway's only update will be the sheetrock and the light fixtures. We'll hire the sheetrock, since DH doesn't like working overhead; he'll take care of the light fixtures.

Perhaps I was unclear - we're not moving any walls. The bathroom has a sheetrock partition and a pocket door; we're taking that partition down to give a little more room in the WC. The other "demo" is to the shower and bathtub - by taking out the tub, it allows us to keep the same sewer line for the shower, but enlarge its footprint to a more appropriate size.

The house was a custom build - it's got double plywood sheathing on all exterior walls. Once we swapped out the aluminum windows to double-paned fiberglass windows, our neighbors could hold their normal 4th of July deck party, and we wouldn't hear a thing. We do need to add some additional insulation in the attic, but the weatherproofing has been greatly improved between the new windows, and the stuccoing of the exterior.
Watty wrote: Thu Nov 12, 2020 8:09 amA potential problem with that is when you are all done you will have a remodeled 1980s house that may be very nice but it is not the same as having a new house. It would be good to at least look at doing a teardown and rebuilding from scratch. That way you would have a new modern house when you are all done.
Nope, a teardown and permits for rebuilding would ensure that we had to live somewhere else, and it's unlikely we could round up a builder who could replace so many of the solid bones already in place.
Watty wrote: Thu Nov 12, 2020 8:09 amTearing the house down and rebuilding might also make it easier to add the elevator and do the other work. For the elevator you could just have a place designed for it that are closets now then you could easily add the elevator if it is ever needed. Even if you just do the remodel that you are thinking about it would be good to design in the future elevator now so you run into fewer problems if you do ever add the elevator.
We already have a closet or an area of the laundry room that would work for the elevator.
Watty wrote: Thu Nov 12, 2020 8:09 amIt would be good to find out just how much of the value is in the land and to get an objective opinion about what the house will be worth when you are done.
A recent lot sold up the street for $329k for a 7k SF lot. Ours is 10K SF. So perhaps $400k for the land these days. We bought the house for $550k, which was the value in 2001, so we're clear we did well enough on the purchase. It's just how to be smart about the rest of it.
Watty wrote: Thu Nov 12, 2020 8:09 amAlso consider if buying a better house that does not need major remodeling would be an option. A huge advantage of this is that you could be in it in a few months.
See other responses as to why this won't happen: we really do have a unique home for the development, with a full basement, 3 garage stalls (one at RV height) and it's in the most desirable quadrant of the development. We rented for several months here while we looked for other possibilities; the tradeoffs in location and access to "fast water" outside of the restricted 5 mph zones mean that we really did get a great location. We are also east-facing, a rarity in the development. It's advantageous, because you don't have the 100 degree sun beaming onto your deck after 1 pm; every other orientation has shades, pergolas, blinds, window films, and awnings to compensate.
Watty wrote: Thu Nov 12, 2020 8:09 amIt would apply to such a major remodel too but there is an old joke, "The final step in building a custom home is to file the divorce paperwork." Don't underestimate how much stress there will be if you are dealing with such a major remodel for the next year.
We've already done major remodels, and done just fine. We're a great partnership when it comes to this stuff. I am willing to go the less expensive route for some things - e.g., the deck. I'd be fine with redwood. DH will not be, and he's even more stubborn than I am. He'll win. ;) So my job is to find out if/how we can order it less expensively, and watch the sales like a hawk.
Watty wrote: Thu Nov 12, 2020 8:09 amA big question is what your personal finances are like. If you have a couple of million in the bank a lot of what to do would a personal choice.
We're in good shape, but not quite THAT much in the bank. If we had that much, I'd be retired by now. ;)
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Re: Over-Improving Your Personal Residence?

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Cigarman wrote: Thu Nov 12, 2020 9:35 am Kitchens and Baths sell homes...I would definitely do those upgrades. We did ours over the last 5 years and can't help but think that help sell our house, even in a hot market, compared to others in my area that were for sale (sold in 24 hours at 20k over asking).
We don't plan to sell for at least another 10 years. But man makes plans... If we HAD to sell in a hurry, we would have to take care of at least the non-working sink in the master bath, which means removing the built-in vanity and double sinks tiled in. We'd also need to rip out the carpet, and install some flooring, presumably vinyl plank. We could do that for a couple of thousand bucks in materials, our own demo, and a local contractor who has liked working with us; we figure labor is 2/3rds, and materials are 1/3. So ~ $10k if required.

The kitchen we could simply replace some of the pull out shelves and call it a day.

In our neighborhood, decks and docks sell the house. ;) The kitchen and bath help. If we had to sell, we know the minimum necessary to get it done.
Cigarman wrote: Thu Nov 12, 2020 9:35 amI get it is a large deck and not familiar with the cost of composite but 70k? I had a pressure treated wood deck at 300 square feet and maintained it yearly and still good as new. You might want to reconsider the material for the deck...just my 2 cents.
Sorry, I mis-spoke. DH wants to use AZEK, which is a vinyl decking with UV inhibitors. We used it on the kitchen patio of our old house, and it was $8k for the rebuild of about 60 square feet. To be clear, I'd be fine with redwood. DH finds a need to overbuild everything, substantial enough to last through Armageddon and then some.
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tmcc wrote: Thu Nov 12, 2020 12:48 pm
$70k for a composite deck is insane. You wont get that back. Similarly , $30k seems really low for a master bed and master bath gut and remodel.
It's a vinyl deck, with UV inhibitors, not composite. Brand name is AZEK. We used it on our old house, and since DH overbuilds everything, he is refusing to consider anything else. Living on the water, everything outside degrades, due to UV, water, corrosion, etc. So he prefers to improve as he goes with things that will outlast cockroaches. :D
Cigarman wrote: Thu Nov 12, 2020 9:35 amDock could be SIGNIFICANTLY more... is it a floating walk out? Or are there concrete pylons ? Is there a seawall? Seawall repair costs will blow your mind.
No seawall, just a levy. The pilings for the dock are pressure treated and fine. DH would prefer vinyl floats instead of simply replacing the existing styrofoam. So vinyl floats plus top decking, plus the skirting for the dock. If we go really fancy, DH would love for us to spring for an all-aluminum gangway. That alone is ~ $10k.
Cigarman wrote: Thu Nov 12, 2020 9:35 amAlso... dont underestimate how miserable it will be to live through interior gut work. Bringing down ceilings is messy and dusty. The insulation and drywall dust will be everywhere and in everything. Cutting concrete slab or foundation is also extremely messy if you're repiping bathrooms plus.. silica dust is really bad for you.
We're only talking a bit of sheetrock, sufficient to re-do the lighting fixtures so that they're symmetrical. We've done this before. And nothing needed in terms of slab or concrete - all the sewer lines are accessible from the full-height basement.
Cigarman wrote: Thu Nov 12, 2020 9:35 amI am writing this from a hotel while my kitchen, living, dining are being done - almost exact same scenario you noted. I made it through 1 day of them ripping out the tile flooring. Even that dust from that was too much. I can't even imagine living through ceilings coming down in the main living area.
A bit of plastic sheathing and a shop vac, and we're fine in the main living areas. The floor is laminate, so no dust like there is with mastic or cutting up tile. The sheetrock work in the master bedroom is more extensive, but we're sure that can be walled off more effectively.
Cigarman wrote: Thu Nov 12, 2020 9:35 amPlus also consider the design continuity of doing the jobs piecemeal versus in one swoop. But if you're DINKs maybe you can just go on vacation for a few months and come back to a completed project? Risk there is that contractors cut corners. If you let them go cost plus, they'll take their sub's pricing and just tack on their fee. If they bid it , the temptation to value engineer the job unless supervised by you will be all too real. Maybe just demo the whole house and rebuild? Thats what I should have done.
Not going anywhere - we're too used to contractors who mess up, so we'd definitely be on site. And demoing won't help - it would just cost even more.
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unclescrooge wrote: Thu Nov 12, 2020 8:35 pm
I would be amazed if you could get even $750k for your house in this condition. Only a professional home flipper would buy it and they will double estimated costs to account for unforseen issues and then tack on a profit margin. So you are probably looking at $1 million - ($130k*2 repairs) - $100k profit - $40k closing costs = $600k as an offer on your house.
Somehow I've made the house sound worse than it is. ;)

Plenty of people tell us it's perfectly fine and livable. And our realtor has asked us before if we're interested in selling at $800k+ given our location in the development, our 3 car garage, and our basement area, which is unique. So no, $600k is nowhere near the market for it. Our nextdoor neighbor just sold her house, which really IS a complete dump, and 30% less square footage, for $700k.
unclescrooge wrote: Thu Nov 12, 2020 8:35 pmI would make the upgrades if you can afford it.
That is the question - how much should we choose to afford?
unclescrooge wrote: Thu Nov 12, 2020 8:35 pmRegarding your $70k estimate for a deck, it sounds outrageous, but likely realistic. I got quotes for half that for a deck half the size. I ended up doing a concrete patio instead for a fraction of the cost of a wood deck. But I had to be the GC on the project.

If you are willing to be the GC, you can save large amount of money on these repairs.
Yes! We've been GC on every project we've done for both houses since 1992; DH comes from a family of engineers, and he's spent 20+ years as an electrician. We've DIY'd an enormous amount of stuff for the houses, but the deck is something he doesn't want to do. He's had spinal surgery before, and doesn't want to do the heavy, literally back-breaking labor of the deck.

Our nextdoor neighbor replaced her deck entirely 2.5 years ago. She spent $45k on it, with redwood, and she shopped hard to find someone capable who would do it. Ours is about 20% bigger, and the AZEK is much more expensive than redwood....our area has outlawed concrete decks; I think they're concerned about possible strain on the levy with the increased weight of the concrete.
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momvesting wrote: Sat Nov 14, 2020 2:45 am It's hard to tell without being familiar with your area, but you absolutely must keep the upgrades in line with a buyer's expectations for a house in your area and price range. For example, in my area, a million dollar house must have at least granite countertops while quartz is an expensive upgrade that you probably won't recoup your investment on and is not expected.
That's how I got to my original estimates: if we leave things as-is, with absolutely minimal upgrades and repairs, we could sell for $850k. Spend $130k, and we might be able to sell for $950k. After that, it plummets. In our area, there are $800k houses selling with grouted tile countertops in the bathrooms; the kitchens have slab counters, typically granite. The bedrooms still have mirrored sliding doors at $850k, but then framed out and sheetrocked closets at $1M.
momvesting wrote: Sat Nov 14, 2020 2:45 amAlso, if you are redoing the kitchen entirely, can you use box store prefab cabinets? They look cheap when spacers are needed because they aren't exactly the right size, but if you choose the cabinetry first, you can make the kitchen fit the cabinets. Same with the bathroom vanities, you can save by not going custom but appearing custom if they perfectly fit in the space.
The kitchen is weird: it's essentially a U-shaped space just paced in the middle of the house. The open end of the U faces a kitchen island, and then the open concept living room and deck. One leg of the U is a wall on the DRm side, one leg is the bathroom hall, and the bottom of the U is a load-bearing wall that forms the main hallway. We haven't laid out cabinetry yet, because we're not ready for that part of the renovation just yet. Most of the kitchen cabinets are 18" wide with a 17" door, and 24" deep. We're open to anything, as long as it's not particleboard. DH will want decently made materials, for sure. They're from 1985, so I have no idea if that's a standard; our previous house had built-ins that were fabricated on-site and built in; very much the norm for 1923.

I'm a great value shopper; once I have an idea of what we're looking for, we will do fine. I have local friends who have used various vendors, a realtor with deep ties and knowledge; and a contractor who worked with us on the replacement of all windows and the stuccoing of the exterior, and he's willing to work with us to find someone who will do good work for reasonable money.
momvesting wrote: Sat Nov 14, 2020 2:45 amAlso, on items you aren't really picky about, go with cheaper options where they are adequate for your area and house price. For example, I would not put laminate flooring in a million dollar home, but there are many tile options that are attractive and inexpensive, but in some areas of the country, tile is reserved for bathrooms and laundry rooms while other areas have entire homes with tile flooring. You have to do what is typical in your locale. Good luck!
Thanks, yes! Because these are often vacation homes, easy and durable have become a big deal here. Wood and tile floors are getting ripped out and replaced by vinyl planking, which I hate. ;) So some of what you wouldn't expect in a million-dollar home is not unusual here. We have bathrooms still done in tile and grout, but kitchens get the solid-slab of granite or quartz.

We renovated our previous house from the ground up, so I have good experience in figuring out the best bang for the buck. For example, in our former house, when we renovated the kitchen, we went primarily with white, with a splash of color. We bought very expensive tile triangles in dark and olive green. We then used them in an interlocking design, alternating dark and light green, to make a "racing stripe" of green tiles to offset the plain creamy-white matte tiles. The white tiles were .40 each, and the triangles were ~ $2 each. Total tile cost was $300 in supplies; 1/4 of the "area" was taken up by the green triangles, but they were 50% of the spend. But that color shot "popped" the kitchen, along with the kitchen hardware in silver. It worked great, for not a lot of absolute money. We know how to make that work.
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veindoc wrote: Thu Nov 12, 2020 4:01 pm Shame. Sounds like you overpaid for the house based on the amount of work that needs to be done. I could deal with outdated. I don’t know about broken.
Nope. We got a decent deal in 2011 because the owner refused to clean it and stage it. Right now, the only thing truly broken is one master bathroom sink.

If that's all that mattered, I could fix that with a sledgehammer, a couple of sinks and vanities from HD, and an afternoon with our contractor to install them with a new countertop. Instead, we'd prefer to do it right, and do it once. We see no need for the tub, so if that goes, we have ample floor space to make a new shower that is actually functional *and* pleasant. This is likely to be the biggest expense, since we won't use a fiberglass tub - it will be tiled in, using the same sewer line and drain - no need to relocate it.
veindoc wrote: Thu Nov 12, 2020 4:01 pmMy kids bath was outdated. We lived with it for 9 years. Then the shower leaked. Could have just replaced the shower but I seized upon the opportunity and next thing you know said bathroom was guttted.
Yep, the problem here is that everything works, it's just outdated. And after 9 years, I'd like to have a shower in the master bathroom that actually allows me to shave my legs without becoming a professional contortionist. Or injured. ;)

The kitchen is outdated, and some of the cabinet doors and shelves are beginning to fail. But we've already replaced the appliances. If all I cared about was functionality, I'd have new wood put in for the cabinet attachment points, like doors, and also replace the roller mechanisms with new ball bearing options. But because it's brown and ugly, I'd rather do it once, and do it right. So yes - some spent on function, and some spent on form.
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