Owning a house. - Page 8

turnipmonster · #71 05-30-2007, 11:56 AM

something that hasn't really been mentioned is adding value to your home yourself. we got our apt pretty cheap but the kitchen/bathroom weren't really nice, etc. so a year ago we redid the kitchen ourselves and it's really nice now and will definitely add more to the value of the apt than what it cost us. same thing for the bathroom, plus in the meantime you get to live in a space that you've designed.

although buying is probably not the highest EV investment, owning a place has increased our quality of life and enjoyment of our place tremendously.

TheMetetron · #72 05-30-2007, 12:03 PM

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something that hasn't really been mentioned is adding value to your home yourself. we got our apt pretty cheap but the kitchen/bathroom weren't really nice, etc. so a year ago we redid the kitchen ourselves and it's really nice now and will definitely add more to the value of the apt than what it cost us.

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This is a huge misconception and is entirely untrue.

Edit: There should be qualifiers here, but I'm a hurry. It's not the way you think it is.

turnipmonster · #73 05-30-2007, 01:40 PM

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This is a huge misconception and is entirely untrue.

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definitely interested on hearing why this is untrue. the quality of life part is obviously intangible, so your assertion must be that if I buy my apt today at X, spend Y on upgrading it then I won't be able to sell it tomorrow for >= X + Y, assuming X is a fair market rate.

stewartkev · #74 05-30-2007, 03:49 PM

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You are skewing the timeline, it's not never buy, it's why buy now.

J

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That's not what the original post states though. I do agree that this may not be the best time to buy, I'm in the UK so can't be specific on different US markets. We are also at a major high point in the market, but in the area of Scotland I live we are still playing catchup to the rest of the UK.

I agree with the post about adding value. I've made a lot of money from each of my properties due to this. The main reason I bought the house I described earlier is because of the plot of land it's on and what I can do with it.

Edit: Just read the couple of posts above. You do have to be careful with what you buy, where, price, what you do, etc. It is complicated, but I tend to base my entire purchasing decision on what I can do, and can I make money from it.

DesertCat · #75 05-30-2007, 04:22 PM

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This is a huge misconception and is entirely untrue.

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definitely interested on hearing why this is untrue. the quality of life part is obviously intangible, so your assertion must be that if I buy my apt today at X, spend Y on upgrading it then I won't be able to sell it tomorrow for >= X + Y, assuming X is a fair market rate.

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It's pretty widely held that you almost never get back 100% of what you invest in improvements, in some cases much less than half of what you invest. You do benefit from a better quality of life, and that can make improvements very worthwhile. But don't think of them as financially great investments.

DesertCat · #76 05-30-2007, 04:27 PM

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I don't think taking the entire country as a real estate market is a very useful way to analyze whether a given person should buy or rent.

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I don't think anyone is saying that. You need to take every real estate transaction on it's own merits. This requires making a buy vs. sell cost analysis, and a reasonable estimate of future appreciation. When I talked about national home price appreciation, I'm just trying to set reasonable expectations.

As you said, there are ancillary benefits to owning. But you should know how much extra you are paying for those benefits before you make such a large financial commitment.

BTW, I own a house that I've sunk a ton of money into "improving" (for quality of life, not financial benefits). I got into the market about two years before it peaked so I didn't overpay based on todays prices. But if I could rent a similar house for half the cost, I'd probably sell in a heartbeat.

turnipmonster · #77 05-30-2007, 04:37 PM

I definitely agree with this, but it seems to me like it would depend on a couple of things:
1) what those improvements are. for instance, I'd be surprised if kitchen improvements weren't valued more than plumbing improvements or something.

2) how much you paid. I got a few quotes from contractors before deciding to do the kitchen myself, the quotes were all 2-3 times what it actually cost me. of course, we're assuming my time was "free" but whatever. anyways, I'd be surprised if in my case the improvements are 0 or -EV, but I could understand it if they are on average of course, since people generally overpay for stuff like this (at least in my experience in my area of the country).

however, that these improvements are on average -EV is not what I understood metetron as saying, that would be like saying rake free poker is -EV for everyone, just because it is for most.

in my original post, I asserted that you can have the opportunity to make +EV investments in property you own, not that all of said investments would necessarily be +EV. if I am wrong on this, and metetron seems to think I am, then I'd like to hear why.

elus2 · #78 05-30-2007, 04:44 PM

tm,

here's some data for you
http://www.remodeling.hw.net/industr...;sectionID=173

John T Reed had an article up on his website where he outlines his strategy for fixer uppers. His basic premise was that if you're doing it for money, the house needs to be an absolute disaster to begin with. Fix it up to the level of being a 'fixer upper' so that you can sell it to your regular joe blow who tends to overpay for those types of homes with the intention of fixing it up for a profit.

DesertCat · #79 05-30-2007, 04:45 PM

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in my original post, I asserted that you can have the opportunity to make +EV investments in property you own, not that all of said investments would necessarily be +EV. if I am wrong on this, and metetron seems to think I am, then I'd like to hear why.

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If you do the work your self, and count your time as worth zero, then you should be able to make +EV investments. But honestly, your time is worth something, probably more than the contractors billing rate if you have a good paying job (or play +EV poker).

Here is an article on the issue.

vilemerchant · #80 05-30-2007, 04:46 PM

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This is a huge misconception and is entirely untrue.

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definitely interested on hearing why this is untrue. the quality of life part is obviously intangible, so your assertion must be that if I buy my apt today at X, spend Y on upgrading it then I won't be able to sell it tomorrow for >= X + Y, assuming X is a fair market rate.

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It's pretty widely held that you almost never get back 100% of what you invest in improvements, in some cases much less than half of what you invest. You do benefit from a better quality of life, and that can make improvements very worthwhile. But don't think of them as financially great investments.

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Possibly a great way to launder poker winnings tho.