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I'm having a debate with my wife over whether to stay in our older house which constantly needs work, but is cheap otherwise, or move to a newer house which will cost us more, for longer, but less things will have problems.
Our basic scenario is that we live in a 100+ year old, 1,500 sq ft, wooden Craftsman house. It was only $250k, which is cheap for the Northeast US. We have a 15 year mortgage at 1.75% that is $2,300 a month PITI. We are averaging approximately $12,000 a year in basic upkeep (boiler, radiators, roof leaks, wood rot, plaster repair, siding repair, etc) all items we constantly have to stay up on.
Not to mention that the house is "loose". We only have window AC's and it gets hot as there is no real insulation. Winters are drafty and the house has original single pane windows (with storms) that are huge and very pretty but also very drafty and old.
With the $12,000 extra a year, I could upgrade to a $450k house and pay $3300 a month, same as now assuming upkeep is minimal. This would likely give me a brick or vinyl-sided, larger ranch style house with central AC, a larger yard, and probably built in the 1970's or 80's. Electrical/plumbing would also be newer, as our current electric and plumbing dates from the 1940's. I would probably need to get a 30 year mortgage, so that is a large downside (because prices are so high now compared to when I bought).
I guess I'm asking what is the break-even point? Do people in newer houses spend $12k a year to upkeep? I've never owned a new house. I had a ranch house from 1953 that I did almost nothing to, and it just held together well. So, from experience, I'm spending way more than I wanted to, to upkeep my house.
People I talk to who own newer houses have told me that they spend a lot of money, but mostly on upgrades (upgrading their bath or kitchen). This is something I won't ever be able to do, due to funds. I can't spend 12k a year and then save another 10k to get a new bathroom. So basically, these rooms will stay the same until I sell. Luckily they're not that outdated.
Any advice? Is there some kind of formula or calculator to figure this out? Thanks!
Scrap the roof and get a new one. Scrap the siding and get aluminum. Now fix all the problems you caused by not fixing the roof. If it's good looking, then add an outdoor kitchen. It the only improvement that pays for itself if done right. Now sell the house.
Scrap the roof and get a new one. Scrap the siding and get aluminum. Now fix all the problems you caused by not fixing the roof. If it's good looking, then add an outdoor kitchen. It the only improvement that pays for itself if done right. Now sell the house.
Putting aluminum siding on a true 100 year-old Craftsman house would be an abomination and certainly wouldn't improve the selling price. Besides, once the OP had done all those "fixes", what would be the point of selling? He'd have a perfect house (sans aluminum siding) with a 1.75% mortgage. Makes no sense.
Putting aluminum siding on a true 100 year-old Craftsman house would be an abomination and certainly wouldn't improve the selling price. Besides, once the OP had done all those "fixes", what would be the point of selling? He'd have a perfect house (sans aluminum siding) with a 1.75% mortgage. Makes no sense.
I agree, but then I would. Maybe a comprehensive roof repair/replacement is warranted, though. If the roof is leaky, that is probably what's driving your $1000/month expense for miscellaneous repairs.
Keep in mind major repairs like replacing a boiler are not going to need doing often.
I see people do this with cars as well - replace transmission, rebuild suspension, couple of other expensive repairs and they declare the car a "money pit" and sell it. I love to buy these, the expensive to repair systems are basically new, and if well cared for, won't need attention for a long time.
You are giving me the impression that this house has been neglected by a previous owner, and you are catching up on needed repairs, but you are going to get to the end of this list and the repair expense will go down sharply.
I'm having a debate with my wife over whether to stay in our older house which constantly needs work, but is cheap otherwise, or move to a newer house which will cost us more, for longer, but less things will have problems.
Our basic scenario is that we live in a 100+ year old, 1,500 sq ft, wooden Craftsman house. It was only $250k, which is cheap for the Northeast US. We have a 15 year mortgage at 1.75% that is $2,300 a month PITI. We are averaging approximately $12,000 a year in basic upkeep (boiler, radiators, roof leaks, wood rot, plaster repair, siding repair, etc) all items we constantly have to stay up on.
Not to mention that the house is "loose". We only have window AC's and it gets hot as there is no real insulation. Winters are drafty and the house has original single pane windows (with storms) that are huge and very pretty but also very drafty and old.
With the $12,000 extra a year, I could upgrade to a $450k house and pay $3300 a month, same as now assuming upkeep is minimal. This would likely give me a brick or vinyl-sided, larger ranch style house with central AC, a larger yard, and probably built in the 1970's or 80's. Electrical/plumbing would also be newer, as our current electric and plumbing dates from the 1940's. I would probably need to get a 30 year mortgage, so that is a large downside (because prices are so high now compared to when I bought).
I guess I'm asking what is the break-even point? Do people in newer houses spend $12k a year to upkeep? I've never owned a new house. I had a ranch house from 1953 that I did almost nothing to, and it just held together well. So, from experience, I'm spending way more than I wanted to, to upkeep my house.
People I talk to who own newer houses have told me that they spend a lot of money, but mostly on upgrades (upgrading their bath or kitchen). This is something I won't ever be able to do, due to funds. I can't spend 12k a year and then save another 10k to get a new bathroom. So basically, these rooms will stay the same until I sell. Luckily they're not that outdated.
Any advice? Is there some kind of formula or calculator to figure this out? Thanks!
You'll have to tally up the costs of each option separately over a long period of time (however long you plan to stay in either house) and compare the totals. There's going to be repairs and maintenance on the newer house, too, as well as (probably) higher taxes and insurance. There's the cost of moving and the realtor's commission. You'll also have the temptation to keep up with the Joneses in the more expensive neighborhood. For your current house, add up what it would cost to get the roof and siding replaced, plant a few shade trees and get an HVAC system. (The cost a box of plaster of paris and plastic film to cover the windows is immaterial.) That surely won't add up to $200,000.
Kiss that 1.75% mortgage goodbye! They're over 5% now and climbing. You say a new house. You don't mean a new house. You mean a new to you house. Houses from the 70's require plenty of maintenance. Many of the things you list can be updated. Insulate the house. What are you waiting for? Replace the windows! I live in a 1940's house in Western NY and one of the first things we did was replace the original single pane windows. Best thing we could have spent our money on! They made a HUGE difference in our utility bills and the drafts. Central air can also be installed or the split systems. Window units aren't efficient. We're looking to replace our 35+ year old furnace and add central air in the future. You can replace the siding with vinyl or Hardy and be done with siding repairs. The roof may just need to be replaced if you're making a bunch of repairs. Might be time to replace the boiler or move away from a boiler. Same with the radiators. You'll most likely spend the same amount on a house from the 70's or 80's. Houses need maintenance. That's part of home ownership.
I built a brand new house. The inspection I paid for before closing came back with about a dozen things that the contractor had to fix prior to closing. The biggest issue was that the ducts in the attic were NEVER connected to the furnace! During the first 6 months we had our brand new central air system die, the door handles had to be replaced, and cracks in the walls from settling repaired. Two years later the fan died for the central air system. Guess who needed a who new system? The fan death fried the system. Houses cost money every year. No way around that.
A different house that costs significantly more than your current house is very likely to have MUCH higher taxes. Close to double. Is that included in your $3300?
I guess I'm asking what is the break-even point? Do people in newer houses spend $12k a year to upkeep?
You will be spending money on maintenance and repairs on a 1970s/80s house. As for how much that will be, it depends on how well it has been maintained and how much the square footage is.
I would factor in a few thousand dollars a year for maintenance and repairs as a baseline.
There's too many specifics to answer and a lot of assumptions being made. A couple of people made suggestions to replace the windows and add vinyl siding. Obviously, if you know about old Craftsman homes, this would be a detriment. Pulling out old fashioned radiators and adding mini-splits would also highly detract from the character and overall value of the home.
That being said, that doesn't mean their cheap to maintain. Finding a contractor who works on radiators is hard to do. Few will even touch them and they're impossible to balance. Craftsman homes, due to a lot of wood trim, and exposed joists that give it character, will cost more to upkeep in the long run. We accept this as a fact.
I think I have the overall answer to my question, which is "expect 70-80's homes to cost nearly as much as the current house, and its going to cost more in the long run due to the higher interest rate". The math seems to point that way. My own judgement has been clouded perhaps because I owned 2 other homes in the past that cost nearly zero in upkeep, and 1 was an 80's townhouse (replaced furnace for $5k, nothing else needed) and one was a 50's ranch with drywall, new roof, and vinyl siding (virtually zero upkeep cost).
There's too many specifics to answer and a lot of assumptions being made. A couple of people made suggestions to replace the windows and add vinyl siding. Obviously, if you know about old Craftsman homes, this would be a detriment. Pulling out old fashioned radiators and adding mini-splits would also highly detract from the character and overall value of the home.
That being said, that doesn't mean their cheap to maintain. Finding a contractor who works on radiators is hard to do. Few will even touch them and they're impossible to balance. Craftsman homes, due to a lot of wood trim, and exposed joists that give it character, will cost more to upkeep in the long run. We accept this as a fact.
I think I have the overall answer to my question, which is "expect 70-80's homes to cost nearly as much as the current house, and its going to cost more in the long run due to the higher interest rate". The math seems to point that way. My own judgement has been clouded perhaps because I owned 2 other homes in the past that cost nearly zero in upkeep, and 1 was an 80's townhouse (replaced furnace for $5k, nothing else needed) and one was a 50's ranch with drywall, new roof, and vinyl siding (virtually zero upkeep cost).
Pulling out radiators? I doubt it. That was something I explicitly looked for (no radiators) when I bought a home. My home is slightly older than yours. I have a friend who has a Victorian and said it was the same for her. If you have window AC, I am not sure how a mini-split is going to be any worse. Yes, there is the unit on the wall, but you already have that with a window AC AND you have the unit poking out the window. Add to that there is also a radiator taking up a lot of valuable space in the room.
Pulling out radiators? I doubt it. That was something I explicitly looked for (no radiators) when I bought a home. My home is slightly older than yours. I have a friend who has a Victorian and said it was the same for her. If you have window AC, I am not sure how a mini-split is going to be any worse. Yes, there is the unit on the wall, but you already have that with a window AC AND you have the unit poking out the window. Add to that there is also a radiator taking up a lot of valuable space in the room.
I would not buy a house where someone pulled out radiators. Radiant heat is far more comfortable than forced air.
Pulling out radiators? I doubt it. That was something I explicitly looked for (no radiators) when I bought a home. My home is slightly older than yours. I have a friend who has a Victorian and said it was the same for her. If you have window AC, I am not sure how a mini-split is going to be any worse. Yes, there is the unit on the wall, but you already have that with a window AC AND you have the unit poking out the window. Add to that there is also a radiator taking up a lot of valuable space in the room.
A NYC investment company bought a house a few doors down from me, and systematically removed all the charm from the house, and left it on the curb. Needless to say, people in the area driving by scooped up those radiators in 1 day. Then they proceeded to change the wooden windows out for vinyl, added mini splits (with the feed lines and compressors lined up where a garden used to be, and modernized the interior with swank, clean lined kitchen and bath). They then painted it a industrial (IMO) greys and blacks and tried to flip it.
They bought it for $350k. They sold it for $405k. It's my understanding that they invested over $50k modernizing it. So they broke even at best, and probably lost money marketing and carrying costs. And made a house that looks out of place in the neighborhood. A lot of people see HGTV and think they understand what people want, especially people in small towns. And it doesn't work out right.
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