Closing on our First Home next week! What's next!?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
redlbj01
Posts: 135
Joined: Tue Sep 23, 2008 7:50 pm

Closing on our First Home next week! What's next!?

Post by redlbj01 » Wed Oct 28, 2009 10:52 pm

My DW and I are closing on our first home this next Monday (11/2). To say we (ie she) are excited about having our own space is a bit of an understatement.

The house is in decent condition with no major issues that were noticed by the inspection/surveyor/etc.

Also, I view this as portion of our portfolio and I want to make smart decisions regarding any updates we do. My wife views it as our home, and that we can do anything we want. We're both right, I think!

Were going to give ourselves a few months to get used to the new place before making any major updates (and to cool our heads a bit), BUT I wanted advice on some possible home improvements vs. the difficulty of diy. The goal obviously is to increase the value of the home with smart upgrades. We want to keep it relative to the neighborhood and don't want to go ultra crazy with the upgrades. Were thinking about making a more "chic" (wife's word, NOT mine) family friendly home.

(1) Upgrading the entire downstairs (1400 sq ft' ish) living, kitchen, and dining room w/ hard wood or laminate floors. Is this something possible a young newbie BUT eager learner could attempt?

(2) Upgrade the Water Heater to a tankless system to drop costs. Systems seem run from $900 to a few thousand. What's the general cost of a professional?

(3) Gutter shield system to prevent leaves getting caught in the gutters


Also any things if you've regretted doing to your home, that you wish you hadn't.

Thanks for the advice!

ruud
Posts: 134
Joined: Sat Mar 03, 2007 1:28 pm
Location: san francisco bay area

Re: Closing on our First Home next week! What's next!?

Post by ruud » Wed Oct 28, 2009 11:07 pm

redlbj01 wrote: (1) Upgrading the entire downstairs (1400 sq ft' ish) living, kitchen, and dining room w/ hard wood or laminate floors. Is this something possible a young newbie BUT eager learner could attempt?
we just bought a house and replaced the carpet in the living room / hallway (~ 400 sqft combined) with an engineered hardwoord floor. it was more work than we had thought, but we'd definitely do it again.

--ruud
"A good plan, violently executed now, is better than a perfect plan next week."

User avatar
White Coat Investor
Posts: 13443
Joined: Fri Mar 02, 2007 9:11 pm
Location: Greatest Snow On Earth

Re: Closing on our First Home next week! What's next!?

Post by White Coat Investor » Wed Oct 28, 2009 11:08 pm

redlbj01 wrote:My DW and I are closing on our first home this next Monday (11/2). To say we (ie she) are excited about having our own space is a bit of an understatement.

The house is in decent condition with no major issues that were noticed by the inspection/surveyor/etc.

Also, I view this as portion of our portfolio and I want to make smart decisions regarding any updates we do. My wife views it as our home, and that we can do anything we want. We're both right, I think!

Were going to give ourselves a few months to get used to the new place before making any major updates (and to cool our heads a bit), BUT I wanted advice on some possible home improvements vs. the difficulty of diy. The goal obviously is to increase the value of the home with smart upgrades. We want to keep it relative to the neighborhood and don't want to go ultra crazy with the upgrades. Were thinking about making a more "chic" (wife's word, NOT mine) family friendly home.

(1) Upgrading the entire downstairs (1400 sq ft' ish) living, kitchen, and dining room w/ hard wood or laminate floors. Is this something possible a young newbie BUT eager learner could attempt?

(2) Upgrade the Water Heater to a tankless system to drop costs. Systems seem run from $900 to a few thousand. What's the general cost of a professional?

(3) Gutter shield system to prevent leaves getting caught in the gutters


Also any things if you've regretted doing to your home, that you wish you hadn't.

Thanks for the advice!
First of all, take a deep breath and get your emergency fund back to where you want it. You wouldn't believe how many emergencies home ownership provides.

Second, realize that no upgrade to your home will increase the value of your home by more than the cost of the upgrade. Even the "most efficient" upgrades will only get you back 85% of the cost of the upgrade. Generally kitchens are the best with bathrooms a close second. And nobody cares one lick what you've done to the gutters. So the moral of the story is:

Upgrade something because you want to live in the upgrade and use it. Thus, do your upgrades relatively soon after you move in, rather than just before you move out, so you can enjoy them longer.

When you move out, do cheap cosmetic upgrades, like touching up the paint (you still have some extra from the painting you did shortly after moving in), cleaning the carpets, replacing the doorknob and painting the front door, and fixing a couple of broken things the inspector will catch anyway.

And quit looking at your home as a portion of your portfolio. It is not an investment. It is not an asset. It is a liability. It costs you money every month-taxes, interest, maintenance, utilities etc. It pays you only the cost of renting it each month as an "imputed dividend." If it were part of your portfolio, you could sell it and invest it in stocks/bonds etc. If you sold your house, you'd need to find another one, so it is shelter, a consumption item, not really an investment.

Good luck and congratulations on a big step.

P.S. The floors are no big deal. Go for it. The gutter shields are a 3 hour job. Of course, getting up there with a leaf blower once a year is a 10 minute job. I don't know much about the tankless system. I'd really do your homework before tackling that.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

User avatar
mlebuf
Posts: 1854
Joined: Tue Feb 20, 2007 8:27 pm
Location: Paradise Valley, Arizona

Post by mlebuf » Wed Oct 28, 2009 11:24 pm

Congratulations on the purchase of your first new home. If you are like most people, you will be glad you made the move from renter to home owner.

The only suggestion I would give is to do any repainting, re-carpeting or re-tiling of the floors/walls that you want to do before you move in. It is far easier and less disruptive to do those things now when the house is empty.
Best wishes, | Michael | | Invest your time actively and your money passively.

User avatar
celia
Posts: 8380
Joined: Sun Mar 09, 2008 6:32 am
Location: SoCal

Re: Closing on our First Home next week! What's next!?

Post by celia » Wed Oct 28, 2009 11:37 pm

(1) Upgrading the entire downstairs (1400 sq ft' ish) living, kitchen, and dining room w/ hard wood or laminate floors. Is this something possible a young newbie BUT eager learner could attempt
If I was thinking of re-doing the floors, I'd do it before I moved in so I don't have to move the furniture out and back in.
(2) Upgrade the Water Heater to a tankless system to drop costs. Systems seem run from $900 to a few thousand. What's the general cost of a professional?

We considered a tankless system when we remodeled the kitchen but for the size and distance we needed from the main line, we would have had to get a bigger gas line installed. I didn't think it was worth the price the plumber wanted so we went with a hot water dispenser instead.
(3) Gutter shield system to prevent leaves getting caught in the gutters
We recently took our rain gutters off since all the water from the roof ended up in one spot and flooded. Now the run-off falls in a more spread-out area.

When you change your mailing address, you'll probably get a "welcome" package from the Post Office that contains 10% off or so from Home Depot and Lowes if they are in your area. As a homeowner and boglehead, you will soon know your way around stores like these.

celia

mfen
Posts: 672
Joined: Sun Jun 21, 2009 5:23 am

Post by mfen » Thu Oct 29, 2009 6:19 am

I have done the research on tankless hot water heaters and they are not a cost effective option. They are much more costly to buy and much more costly to install. They are pretty big energy hogs as well. A $14 hot water heater blanket will save you a lot more money. My natural gas bill in the warm months is $8.00 for just the 50 gallon hot water heater and I assume that $8.00 also has a base charge component. The hot water surger that I have installed is a nice feature. New they cost $200 plus installation. This little item moves hot water to anywhere in my 3900 sqft house instantly.

Government website for info:

http://www.energysavers.gov/your_home/w ... opic=12820
Maryanne

ohiost90
Posts: 637
Joined: Wed Apr 11, 2007 3:24 pm

Re: Closing on our First Home next week! What's next!?

Post by ohiost90 » Thu Oct 29, 2009 7:37 am

celia wrote:
(3) Gutter shield system to prevent leaves getting caught in the gutters
We recently took our rain gutters off since all the water from the roof ended up in one spot and flooded. Now the run-off falls in a more spread-out area.
celia
Bad idea. The reason to have gutters is so that a large amount of water doesn't land so close to your foundation. Celia should have determined why the water collected in one area and fixed that problem. Most likely a blockage somewhere in the system. It may have solved the orginal problem but will cause other problems in the future.

As far as a gutter shield system, if your gutters are in good shape and you don't want to clean them often, one can get snape on coverings from HD or lowes fairly cheap. Its an easy project as long as you can get to the gutters to snap them on. I have them from the previous owners and they work rather well.

Installing hardwood floors is not a simple DIY project. You need a miter saw and a hardwood floor nailer. If they aren't prefinished your need a buffer as well. applying the finish is most likely harder than the install. All of those can be rented. Laminate floors are easier to install but I wouldn't recomend them for an entire level. Laminate floors aren't consider an upgrade to most people.

pshonore
Posts: 6421
Joined: Sun Jun 28, 2009 2:21 pm

Re: Closing on our First Home next week! What's next!?

Post by pshonore » Thu Oct 29, 2009 8:23 am

redlbj01 wrote:(1) Upgrading the entire downstairs (1400 sq ft' ish) living, kitchen, and dining room w/ hard wood or laminate floors. Is this something possible a young newbie BUT eager learner could attempt?
I recently put in hardwoord floors in the entire upstairs of my house. If you're comfortable working with wood and have the tools to do the job (a floor nailer as well as a finish nailer and a good table saw or chop saw; renting those gets very expensive for more than a few days), its easy to do. Be aware that you will have to remove any carpet and most likely the underlayment beneath it. Pre-finished is the way to go. I'd tackle one room first and see how it goes.

(2) Upgrade the Water Heater to a tankless system to drop costs. Systems seem run from $900 to a few thousand. What's the general cost of a professional?

(3) Gutter shield system to prevent leaves getting caught in the gutters
If you need new gutters anyway, thats the way to go. If you have a 1 story house, you can easily clean them by hand in the fall.

rwwoods
Posts: 1312
Joined: Thu Jun 07, 2007 7:54 pm
Location: The Villages, Florida

Post by rwwoods » Thu Oct 29, 2009 8:24 am

When making any improvement, remember that you will sell the house someday. Therefore, the improvement should be acceptable to the vast majority of home buyers - i.e., violet tiles in the bathroom is probably not a good idea.

Hardwood can only be applied on floors above ground. Laminate and Engineered wood can be applied to all levels. There are pros and cons to all three types, so do your homework.

We had laminate florring professionally installed. Laminate is engineered to be installed by the DIY, but I noticed there was a lot of cutting involved. After discussing quality issues and company support with several retailers, we found that they favored Armstrong, Quickstep and Tarkett.
"I'm not so much concerned about the return on my money as the return of my money" - Will Rogers

User avatar
verbose
Posts: 560
Joined: Thu Aug 28, 2008 10:05 am

Post by verbose » Thu Oct 29, 2009 9:16 am

I lived in an apartment with a tankless water heater once. I despised that thing. It made it impossible to take a hot bath. The temperature of the water is related to the flow rate in a tankless system. When filling a tub, the flow rate is very high, so the temperature drops. In the summer, baths were warmish, and in the winter, lukewarm. In the winter, the showers weren't hot enough either. Most people don't take many baths, but just know that a tankless makes a long, hot soak impossible.

User avatar
schnoodlemom
Posts: 456
Joined: Mon Oct 20, 2008 3:06 am

Post by schnoodlemom » Thu Oct 29, 2009 11:29 am

Congratulations on the new home!! As for what next, I think the idea to cool it for a few months makes sense as you all rework your budget, keeping in mind short and longterm goals and emergency funds. I also like the idea of doing the flooring before you move in.... just don't know how to make those two ideas work together.

As for DIY laminate floor, we did it in our basement exercise room. It was easy given it was a simple rectangular room, though took longer than anticipated due to learning curve. My husband says we're hiring professionals for the main living areas, too many cuts and we want their warranty behind the work. Have fun feathering your nest!! :-)

Amanda

User avatar
schnoodlemom
Posts: 456
Joined: Mon Oct 20, 2008 3:06 am

Post by schnoodlemom » Thu Oct 29, 2009 11:57 am

I forgot to add that in our poor local housing market, we're not seeing any significant appreciation in the past 12 years that makes our house an investment (assuming you want positive returns, no?) We've spent $$$ on a cedar fence, underground sprinkling and a finished basement and could not sell today at a profit. Unfortunately we bought an old-fashioned home in an older established neighborhood in town. All the new construction is on the edge of town, lower taxes, more upscale, and just this past year with a new elementary school. Local economy is shot, lots of short sales, and foreclosures. Saving grace is that we bought well within our budget on a 15 year fixed loan, almost have it paid off, so there's lots of equity. We also love our neighborhood, shorter commute and the mature trees.

But real estate is a very local phenomena. I think that doing the renovation work for your pleasure within reason not expecting a big return is the way to go. Most surface replacement would generally be considered upkeep, not an upgrade. I'm beginning to think that given HGTV's popularity, even the upgrades are considered standard, so you pay for them to just maintain your property value. But I could be way off base. Your real estate agent could help you look at comps and make suggestions. I bet you already know some of this anyway from the home buying process. Have fun with it and expect to make a few mistakes as you learn! We had to have our old water heater bust and flood our basement before we found out the hard way that they need periodic inspection and maintenance. :oops:

Amanda

jbk
Posts: 288
Joined: Mon Jul 21, 2008 7:56 pm

Re: Closing on our First Home next week! What's next!?

Post by jbk » Thu Oct 29, 2009 8:41 pm

And quit looking at your home as a portion of your portfolio. It is not an investment. It is not an asset. It is a liability. It costs you money every month-taxes, interest, maintenance, utilities etc. It pays you only the cost of renting it each month as an "imputed dividend." If it were part of your portfolio, you could sell it and invest it in stocks/bonds etc. If you sold your house, you'd need to find another one, so it is shelter, a consumption item, not really an investment.
But what if one sold the house, rented an apartment, and invested the proceeds from the sale? Isn't it okay to consider a house as potentially part of one's portfolio?

redlbj01
Posts: 135
Joined: Tue Sep 23, 2008 7:50 pm

Post by redlbj01 » Thu Oct 29, 2009 10:26 pm

Thanks for the advice.

We are definately going to slow our selves down the next few months untill after the holidays and until we get our "new" budget inline.

I realize that real estate has their own costs beyond what renting has BUT I feel we got a heck of deal on this place, and it doesn't really NEED any major updates. It'll be the most space we have ever lived in together.

Good to know regarding the tankless water heater. Figured there was a bit of hype to it.

Any suggestions on some good DIY Home Remodel Manuals? I'm looking to get a decent series of home improvement books instructions, to help navigate mysef through some of these potential home repairs.

64415
Posts: 196
Joined: Wed Jul 01, 2009 8:32 pm

Post by 64415 » Fri Oct 30, 2009 10:46 am

Congratulations on the new home, hopefully you have purchased at a fair price. I would like to emphasize Emergency Doc's advice to view your home as an expense rather than as an investment.

Regarding home Improvements, I believe a survey of appraisors or perhaps realtors (so take this with a large grain of salt) had landscaping as the improvement which would capture the largest percentage of cost at the time of resale. This was from a survey in smartmoney during the height of the real estate bubble.

User avatar
giacolet
Posts: 815
Joined: Sat Jul 05, 2008 7:41 am
Location: St. Petersburg, Florida

Value Upgrades

Post by giacolet » Fri Oct 30, 2009 11:15 am

My experience as a closing agent working with investors is that increasing the curb appeal of the residence is the most productive upgrade, followed by sanitation issues as a new toilet and bath/shower, then kitchen modernization.

The 1st landscaping item was to have all the trees lifted and pruned to maximize the light and air flow in the front yard, followed by well-trimmed plantings that frame and enhance the home as viewed from the front yard. Next was lush and healthy grass, i.e. a newly sodded, well-wattered and weed free fertilzed lawn.

64415 said:
I believe a survey of appraisors or perhaps realtors (so take this with a large grain of salt) had landscaping as the improvement which would capture the largest percentage of cost at te of resale.
May your heart always be joyful. | May your song always be sung. | May you stay forever young. | ----Bob Dylan

SamB
Posts: 822
Joined: Mon Mar 12, 2007 3:17 pm

Post by SamB » Fri Oct 30, 2009 11:53 am

I also installed hardwood flooring, in the downstairs of my new home 22 years ago. I certainly do not regret it. That said, do not skimp on the necessary tools. Buy a nailer, mitre saw, laser measuring tool, nails, and good knee pads. If you do it yourself make sure you buy the best grade prefinished flooring, with little or no bevel. That way it can be refinished twenty years from now.

Since you will be doing it yourself you can do one room at a time, and just move the furniture into another room. It may take a long time, but it is definitely worth it. You can make sure that a nail goes in every joist, and that the flooring is installed correctly, perpendicular to the joists. If you invest in a table saw, or radial arm saw, you can make your own threshold pieces.

Be prepared to be grossed out when you rip up the old carpet and padding. A lot of people never realize that they are living on construction filth.

On a completely different subject, make sure you snake your dryer vent(s). Some jerk dropped a coke bottle down my vent during construction and I did not find out for ten years when the vent was finally cleaned. Home inspectors ought to check this stuff, but it is too much trouble and they never do.

Good luck,

Sam

User avatar
White Coat Investor
Posts: 13443
Joined: Fri Mar 02, 2007 9:11 pm
Location: Greatest Snow On Earth

Re: Closing on our First Home next week! What's next!?

Post by White Coat Investor » Fri Oct 30, 2009 10:44 pm

jbk wrote:
And quit looking at your home as a portion of your portfolio. It is not an investment. It is not an asset. It is a liability. It costs you money every month-taxes, interest, maintenance, utilities etc. It pays you only the cost of renting it each month as an "imputed dividend." If it were part of your portfolio, you could sell it and invest it in stocks/bonds etc. If you sold your house, you'd need to find another one, so it is shelter, a consumption item, not really an investment.
But what if one sold the house, rented an apartment, and invested the proceeds from the sale? Isn't it okay to consider a house as potentially part of one's portfolio?
You're right, of course, in theory the money is fungible. And I ask but one question in rebuttal...How many of your friends move out of the house they own into an apartment each year? In general (and of course to every rule there are exceptions), people transition from renting to buying, not the other way around, at least not permanently.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

User avatar
tdhg566
Posts: 860
Joined: Thu Mar 08, 2007 4:37 pm
Location: Spring, TX

Re: Closing on our First Home next week! What's next!?

Post by tdhg566 » Sat Oct 31, 2009 1:21 am

redlbj01 wrote:My DW and I are closing on our first home this next Monday (11/2)...Were going to give ourselves a few months to get used to the new place before making any major updates...Upgrading the entire downstairs (1400 sq ft' ish) living, kitchen, and dining room w/ hard wood or laminate floors. Is this something possible a young newbie BUT eager learner could attempt?...Also any things if you've regretted doing to your home, that you wish you hadn't
As others have said, congrats on being a homeowner. Now you won't have any free time like the rest of us have learned :). After many houses over the many decades, we're moving into our last house next January. It's being constructed to handle our needs up through the point where we need assisted living. In looking back over the years and many projects, I guess I have these few observations:

a) We did a natural/real oak floor project over 2/3 of a house once. Had to move out for a week. Wax finish, which I do NOT regret (easy to fix if damaged, minimal effort to re-wax/buff). Sanding during installation was a real mess. More tape and plastic than I could imagine, still the sawdust got in everything. Took us years to vacuum it out from all the hidden spaces. The house we're building (one story) will be 100% tile. Zero carpet and wood. Exactly what we want. Installed tile costs more than carpet, less than wood. I personally love wood, but not on floors any longer. Too slick is one problem, so we've carefully selected a tile with a high COF. Slick wood makes it easy to move furniture (remember to put pads on the furniture feet), but also for human feet to fly out from under you :)

b) The only home improvement projects I ever regretted were those I started and had problems finishing. Count the "cost" of the entire project, both money and your time, before you start. Finish one project before you start the next, something I often find hard to do. My tendency is to juggle many projects at once, to "optimize" the tasks. While one project is drying or waiting on parts, move to another. I'm trying to cut down on that behavior.

c) Be wary of gutter gimicks. Many of the gutter protection products get clogged themselves, and the water just flows over the top and down. Unless it's a two story you can't reach, consider a U shaped hose attachment where you can clean out the gutter from the ground.

d) We may agree to disagree on this, but I do not and have never considered my house as part of my portfolio or net worth. It's a life style choice. I have to live somewhere. If I choose to transfer other assets into a house to improve my lifestyle over renting, then that's a "purchase" that MAY OR MAY NOT ever return my investment to me. In the meantime, my portfolio is that much smaller. I think it's very risky to assume anything about real estate values.

Again, congats, and above all, ENJOY your new home and thank God that you live in a country where home ownership is a dream that average folks can grasp.
As an Enrolled Agent I advise clients about taxes and investments. My work is retiree friendly, geographically portable, mentally stimulating, personally profitable and emotionally rewarding.

User avatar
pjstack
Posts: 1308
Joined: Tue Feb 20, 2007 5:03 am
Location: Harbor City, CA

Post by pjstack » Sat Oct 31, 2009 2:02 am

Enjoy your new home!

Go back and re-read what EmergencyDoc said. He's right.
pjstack

sailor234
Posts: 324
Joined: Tue Nov 20, 2007 7:47 am
Location: Lehigh Valley, PA

Post by sailor234 » Sat Oct 31, 2009 9:01 am

Congratulations! You will enjoy your new home. Moving up from an apartment to a townhouse, my first home, was a great improvement in quality of life.

Having gone through five homes now, and many renovation projects, I agree with most of the suggestions you've received. In most of my projects I learned, sometimes the hard way, how to get it done. Once you find the Lowe's and Home Depot, ask the folks in each department for advice on a project. Some, but not all, of the staff in these stores have a background and wealth of experience; they are often willing to share with someone who asks intelligent questions. For example, if you are doing some rewiring you can check with these experts on ways to do it and the code requirements.

I would also agree with your plans to chill out and get settled. In that time, go through the house and consider all the changes you might want to make over time. Then go through the list and prioritize the projects, allowing for the right sequence of work; you don't want to renovate the Master Bath after putting new carpet in the Master Bedroom.

As others have noted, you will need to acquire tools, a basic set and then special purpose tools for certain jobs, e.g., trowels, etc. for tiling. Buy good quality tools and you won't be disappointed. Consider cordless power tools; I've only used these for the past few years but they are a great convenience. (Unless you're buying the best equipment, don't bother with cordless saws; in my experience they won't have enough power or last long enough on a charge.)

Finally, your home is an expense, as others have noted, but some projects will add to it's value, especially if it's an older home and the project is a serious improvement. In one home I owned, the Master Bath was a horrendous warren of four doors, a walk-in and a linen closet, two sinks in separate areas, etc. I gutted this space to the studs, raised the ceiling to the shed roof and added skylights, a Jacussi tub and custom shower. It was a fun project and a major selling point when the time came.

Enjoy!

Ray

User avatar
cyclysm
Posts: 173
Joined: Sun Feb 10, 2008 1:19 pm

Post by cyclysm » Sun Nov 01, 2009 11:25 am

I can add some perspective on the hardwood flooring debate. I recently installed prefinished engineered hardwood in my kitchen and dining room (about 300 sq ft) and would definitely think twice before doing it again. This was not a square room project and therefore had many cuts and unique installation issues. I spent about 40 hours over 3 days to get everything down.

I would consider myself an above average DIY'er and had all the required tools. If you do not have a lot of experience and/or the necessary tools, be very careful that you do not get in over your head. Getting up and down and going back and forth to your saw at least once or twice for each row of boards is a much bigger physical drain than you think. Couple this with limited experience and a few incorrect cuts and it can become a bad mind game.

As for the tankless water heater, I looked at this but the cost to retrofit existing construction (bigger gas supply line, separate exhaust vent, additional wiring) is prohibitive. If these are not factors for your house, you should note that there are some tankless heaters that will reduce the water flow to ensure that water leaving the tank is at a consistent temperature. This would mean you could get that hot bath in the winter, but it may take a bit longer to fill the tub.

Post Reply