NT vs Telfair or NEW vs 10 year Old home: How about the maintenance ? (Houston: rental, insurance)

[Houston456]

While debating between NewTerritory and Telfair, on a pure financial angle, I would like to get some inputs from experts.

Lets compare between a 300K home in Telfair and NT. Telfair home is built on 2008 and the NT one on 1998. Say, the owner is going to live there for 7 years.(Lets leave Sq.ft/trees/maturity/ etc for now). The Telfair home would cost $2250 more per year for Taxes. (My calculation is based on the fact that property tax is 1% more in Telfair-So that comes to $3000 and when you account for the Tax benefit- say, 25% of that on average-it will be 3000-750 = $2250/year).

Though there is no guarantee, I optimistically assume that New homes have no/few maintenance issues for first 7 years. What would be the average annual maintenance cost for the 10 yr old NT home for first , say 7, years ? Does it cost about $2000 so that they break even ?

Am I missing something ?

[Wysiwyg]

i'm not an expert, you may have to factor in the new roof at 15yo or at selling time. maybe AC too

[icon7]

I would think the 1998 NT home would need in the next 7 years:
water heater, AC work(possibly), roof(maybe).
Also the windows and AC will not be as efficient as the newer home.

Telfair:
New, but you will likely need better landscaping. window treatments, etc.

Yes it will cost more to live in Telfair. I have met a few people who upsized from NT to Telfair. But at this price range will the extra $2250 a year make or break someone who is looking for a home???

[Topaz]

I'm very interested in this discussion. We are in a 1990's rental home in New Territory and so far we've added up in our heads that this house would need to be discounted by a LOT of money to make it a decent deal. It needs up to $50K worth of work. It is likely more poorly maintained than the average New Territory home that has never been used as a rental property, but if you weren't careful when buying an older home, you could get some unpleasant surprises if you didn't have an awesome home inspector.

[revive]

I was on the same boat with you a few months back. Here's one major factor that you missed: Telfair homes are much more expensive than NT. Bottom line, if you want a comparable size home, you'll be paying more for Telfair no matter what, and cost of repairs & extra utilities of an older NT home will not be as high as the extra costs of living in Telfair. How much the difference is really depends on a lot of factors.

With $300K, you'll get a much smaller home in Telfair than what you'll get in NT (especially the west/north sections of NT). For example, a 3500 sqft 4-bedroom house will cost:
- $270-300K in west/north NT
- $330-350K in east section of NT (the section zoned to Austin HS)
- $400K in Telfair

So if you buy in Telfair, not only taxes are higher due to higher tax rate, you'll also be paying higher taxes due to higher property value. In addition, NT's "assessed value" (which is what the actual taxes is based on) is actually lower than the market value, which makes Telfair's taxes still higher comparatively. On top of that, you'll be paying higher monthly mortgage because the home itself is more expensive in Telfair.

But you'll get what you pay for. In Telfair, you'll get a newer, more technologically advanced, customized (to some extent --if you build new) home, with better location. So for you the question is not which option will save you money. The question is is Telfair worth the extra dollars?

Note: I ultimately chose Telfair.

Originally Posted by Houston456

While debating between NewTerritory and Telfair, on a pure financial angle, I would like to get some inputs from experts.

Lets compare between a 300K home in Telfair and NT. Telfair home is built on 2008 and the NT one on 1998. Say, the owner is going to live there for 7 years.(Lets leave Sq.ft/trees/maturity/ etc for now). The Telfair home would cost $2250 more per year for Taxes. (My calculation is based on the fact that property tax is 1% more in Telfair-So that comes to $3000 and when you account for the Tax benefit- say, 25% of that on average-it will be 3000-750 = $2250/year).

Though there is no guarantee, I optimistically assume that New homes have no/few maintenance issues for first 7 years. What would be the average annual maintenance cost for the 10 yr old NT home for first , say 7, years ? Does it cost about $2000 so that they break even ?

Am I missing something ?

[Beto]

I agree with icon7, a new home is much more energy efficient than a home built in 1998. Contact the electric company to get an estimate on the average electric bill. A home built in 1998 may have plumbing issues,ac problems, window leaks and other hidden problems.

[scammed1]

Though there is no guarantee, I optimistically assume that New homes have no/few maintenance issues for first 7 years. What would be the average annual maintenance cost for the 10 yr old NT home for first , say 7, years ? Does it cost about $2000 so that they break even ?

Am I missing something

I think you are overly optimisitc.
Please research material at Homeowners for Better Building and Homeowners Against Deficient Dwellings.
Read about TRCC -Texas Residential Construction Commission and make sure to look at the links on the sites.
Good Luck.

[Houston456]

Thanks for the inputs guys.

Eventhough I (OP) started this thread just to see how the old vs new homes account for the maintenanace expense, your inputs helped me to do my own research to determine the real value vs expense on a NT vs Telfair home.

It made me to analyze the real YEARLY expense on a 3000sq ft home on both TELFAIR and NT. I made this comparison with a fair assumption that Tax+Maintenance+Insurace would cost 4.5% annually. More on Tax means less on Maint and vice versa.

Also, for the sake of this comparison, PMIs are excluded.
Also, the hyped TAX benefit is excluded (If you are interested , the Telfair one would give you back aprox $1500 more than the NT one)
Though new homes tend to be more energy efficient, the lack of matured trees may negate that. Atl east, that’s what I concluded after talking to a NT resident and Telfair resident.


Conclusion:
It appears it would cost $9500 more per year to own a Telfair home

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Assumptions :

• Down payment : 10%
• Loan : 90%
• Loan for the entire 90% for 6.0 APR - 30 year
• No PMI
• 3.0% Property Tax and 1.5% Maintenace+Insurance
• No Tax Benefit

3000 sq/ft house in Telfair with $115/sq ft. - (built on 2008) = $345000

• down payment : $34,500
• Loan : $310,500
• Monthly Mortgage : $1,865 + (Tax and Intrest)
• Loan amount due after 1 year : $306,645
• Intrest 1 year : $18,525.14
• Property Tax + Maint : $8,280.00 + $5,433.75
• Loan amount paid back : $3,301.03
• Total Expense /year : $36,093.75

3000 sq/ft house in NT with $85/sq ft. - (built on 1998) = $255000

• down payment : $25,500
• Loan : $229,500
• Monthly Mortgage : $1,375 + (Tax and Intrest)
• Loan amount due after 1 year : $226,693.68
• Intrest 1 year : $13,693.66
• Property Tax + Maint : $6,120.00 + $4,016.25
• Loan amount paid back : $ $2,806.34
• Total Expense /year : $26,636.25

Originally Posted by Houston456

While debating between NewTerritory and Telfair, on a pure financial angle, I would like to get some inputs from experts.

Lets compare between a 300K home in Telfair and NT. Telfair home is built on 2008 and the NT one on 1998. Say, the owner is going to live there for 7 years.(Lets leave Sq.ft/trees/maturity/ etc for now). The Telfair home would cost $2250 more per year for Taxes. (My calculation is based on the fact that property tax is 1% more in Telfair-So that comes to $3000 and when you account for the Tax benefit- say, 25% of that on average-it will be 3000-750 = $2250/year).

Though there is no guarantee, I optimistically assume that New homes have no/few maintenance issues for first 7 years. What would be the average annual maintenance cost for the 10 yr old NT home for first , say 7, years ? Does it cost about $2000 so that they break even ?

Am I missing something ?

[icon7]

So Houston456,
Which area did you decide on?
Honestly, If something really nice came on the market in Pointe Royale in NT, I would have jumped on it...But even with the added expense in Telfair, the option to build the home the way I wanted it from the ground up was a big factor for me.

[Houston456]

Not yet.. still researching...

Originally Posted by icon7

So Houston456,
Which area did you decide on?