What would you do?

[LarryJewell]

Lately we've been discuessing just adding on to our house. I've heard stories that after adding on, it would have been better off building new and vice versa. Its just another one of those things that I wanna do right the first time. I still havnt gotten an answer as to wether or not building supplies are still high or if they are coming down in price yet? It seems to me that all commodities seem to keep getting higher and higher in price.....

You probably didn't get an answer to your question because there are too many variable involved. Adding on to a house will increase the value and marketability, if done right. It will not always increase value in proportion to the money spent, right away at least. As far as building materials/labor coming down or going up, that depends on where you live. Its different all over the country. I built my house in 1998, its more than doubled in value since then. My house is just under 2500 s/f, comparable quality houses that are only 1700 s/f are now selling for a third more than what I paid for mine.

Best advise I can give you is talk to an appraiser in the area you live about whether to add on or build new. I do have to warn you, our time and expertise is what we get paid for, so free advise may not be available, except here

One little tip........over build certain things, whether you add-on or build a new home, closets should be much larger than anticipated, kitchen and baths can use some extra space and dont skimp on the garage, go large. This will definitely help when you decide to sell it later.

 

[MaxFarmer]

Thanks Larry. I doubt we will be selling anytime, if at all. The retaining value isnt much of an issue with me. We own the whole 1/4 section that my house is on and do not plan on selling ever if we dont have to. Its just more of which is "smarter" if that makes any sense. We are actually in a very nice location, it used to be a town (even though there were only 2 houses) b/c it had a post office and a store. Its kind of nice having a sign on the highway 5 miles away that tells everyone how to find your house out in the sticks.
I hear you on values also! I bought my grandma's home place (160 acres also) 5 years ago for $1700/acre. Land 1/2 mile away sold this fall for $5000/acre! Its absolutely nuts!
Its funny you mention the bathroom....I should get a pic up for you guys to laugh at. We still have the PINK 4" square tile half way up the wall all the way around. I cant stand it! Nothing screams 70's like our bathroom!

 

[fordt]

Free up cash, invest. Rates are low, pull money out if you can. Just my $.02, but what do I know.

 

[mvnvltn]

I have as much money available already as I do in cash. thats my issue. Whatto do with what.

 

[fordt]

Wow, good thread. I actually asked about this last week I think in the tell us about yourself thread (hijacked, I know). Our house is gettin small with the 2 kids and the wife wants 2 more We were going to build a new house, but I was trying to find the right time also. Lately we've been discuessing just adding on to our house. I've heard stories that after adding on, it would have been better off building new and vice versa. Its just another one of those things that I wanna do right the first time. I still havnt gotten an answer as to wether or not building supplies are still high or if they are coming down in price yet? It seems to me that all commodities seem to keep getting higher and higher in price.....

Anyone talking about building prices going up or down is pure speculation, you can argue either way, and both sides have valid points. Nobody knows for certain, nobody....except for the guy with the pricing gun at Home Depot

 

[fordt]

I have as much money available already as I do in cash. thats my issue. Whatto do with what.

Do you work for yourself?

 

[mvnvltn]

Yes

 

[fordt]

What type of business?...

On Edit, I see the pic now.


There are many ways to invest, although it's not for everyone. Personally we don't play the stockmarket game, not even a little, just not what we are good at. Real-Estate and commercial properties/business is what we are good at, so we invest there. You may want to think about throwing some cash into a long term CD, a little in the market, etc. Money is cheap right now, invest, what you invest in is up to you and you alone, everyone will have different opinions. Rightfully so, it's what they are use to.

 

[MaxFarmer]

I woudnt invest in long term CD's with the interest rates dropping as much as they have. Interest rates havnt been this low in years, why lock money up long term on a low rate? There has to be some other way to invest. Commodites (oil, soybeans, wheat, steel) have been going higher and higher as the global economy keeps growing. Thats about all the input I can help you with. From an ag perspective, the reasoning we are given for the higher prices in commodites is b/c people are pullin their money out of the stock market and investing in commodities.
I hope I didnt just run a circle and confuse anyone.

 

[Lonnie]

I just paid mine off as I did not like the worry of having a montly bill just to keep my house. I then took the equivalent of my mortgage payment & maxed out my 401K. This way my contribution lessens my taxable income & I can save more money this way.

For example, lets say 1/3 of your income goes to taxes (federal/state/local). You have to make $15K gross to get $10K in your hands to pay an $800/month mortgage. You can save the same $15K in a 401K (where it is still yours & all of it gains interest) & it only reduces your take home pay by about $11K. This is a crude ballpark estimate, but you get the general idea.

You can contribute $15,500 per/year, but it is not intended for use before 59.5 years old without penalty. My average interest was over 15% last year, meaning that $15K would have also made over $2250/yr in interest.

I figure if I'm doing OK at work, I'll save a lot of money & if my work goes bad, I do not have to worry about any bills to pay. The fact that the monthly bill is not hanging over my head is a big relief now.


On the other hand, if I was to add on to my house, I would have kept the mortgage, & spend my savings on the remodel. This way there are no refinancing charges. You will probably get a higher rate for a remodeling loan than your present mortgage... unless your rate is not that good now.

 

[MaxFarmer]

15% is a helluva lot better than the 3% you could get on a CD. Thats what my bank is at for anything from 6 months to 4 years. My money tree will grow faster........

 

[Lonnie]

Besides, money in the bank is too easy to get to.... the urge to buy another toy always happens when I look at the bank statement.