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It’s time to rewatch the 1986 Tom Hanks/Shelley Long cautionary tale about their dream house gone wrong.
After spending last year’s home improvement efforts on my newly-acquired tin can casita, my used car of a fishing cabin in the Sonoran Desert, I’m back in the city for some long-pondered home renovation. It ain’t been pretty, at least when I review the hit to my portfolio. Everything from a piece of lumber to a square foot of cement is more expensive than I’d imagined. Plus, it’s all taken much longer than expected, and the planned summertime work will stretch into late fall. The primary goal here is to improve the property so it’s in good condition for my older years, should I stay in it rather than move elsewhere. The secondary goal is to increase its appeal to younger homebuyers, should I downsize or leave it behind altogether.
I’m also listening to long podcast discussions on “rent v. buy”. I’m renting the spot where my retirement experiment, my owned park unit sits (it came to rest there 40 years ago, been through many owners before me) so I’m actually on both sides of the discussion for the first time in decades.
The thing is, as is the case for many other homeowners, the house I’ve lived in for over 30 years has become a sizable element in my portfolio. A 401k only requires an occasional rebalance, a small pension is completely on autopilot. But like most homes, mine benefits from ongoing maintenance and occasional improvement.
Instead of selling the big house and living full-time in my remote 370-square-foot unit, I may downsize into a smaller house nearby. At least for a few years, I’d like to retain regular contact with my kids, old friends and neighbors, enjoy city life on occasion, cook with the finest fresh foods in the country, eat at my favorite restaurants, and take breaks from savage climate and rattlesnakes. One or another of my kids has been sharing the house with me the last few years, which means I have someone to tend to it when I’m in my bliss at the edge of the universe.
But smaller homes on the market here are almost as expensive as what I’d list my “big house” for. The less expensive ones are in very worn condition, as this is a century-old neighborhood, or at the more dodgy ends of the neighborhood, not especially safe for an older person on their own.
So that leaves me to work on my current house, and if I find a nicer smaller place, I can sell it. To the next starry eyed couple looking for their “forever home”.
No one goes shopping for a money pit, right?
We waited too long to sell our home of 40 years because I was reluctant to give up the house and face the work and stress of moving. Big mistake.
But it worked out. We sold the house (built in 1929) and bought a 2,000 sf condo in a 55+ community 7/10 of a mile from the house. The sale paid for the condo. We haven’t saved much if anything on home living expenses, but are relieved of maintenance work and worry.
Since moving in 2018 our condo investment has grown from $580,000 to about $900.000 in value. But the move was not about money, rather no stairs, no worries about outside maintenance or major repairs or a damp basement, etc.
We all, I am sure, you see the homeless beggars with their cardboard signs on busy street corners. While they don’t have a place to live, they avoid the hassle of owning stuff. Whether your property is a “candominium”, or singlewide, or condo, RV, van, or home, all create a burden that takes both time and $$ to continue to be livable. Just like a PC, smart phone or tablet, you must keep updating the operating system and apps to get the value. I call this additional investment of time/cost, the “Futz Factor”.
So far this year, our primary residence has needed a new refrigerator, washer, 2 new garage door openers, and I am about to order 9 new window blinds to replace 40+ year old versions. Additionally, I have replaced 3 46 year-old toilets. Every year, I have such a list. It is easy to brag about what a great investment this house has been with its taxable value increasing 11X over our 46 year ownership. When you factor in the cost of the Futz Factor it ain’t so wonderful…..
Early next month I will be headed your way to my other home in Oro Valley. The purpose of this visit is to clear the place out so that it can be sold. After 12 years of coming down for a five month Winter stay, we can’t continue to go. I have to check my spouse into a Memory Care Respite facility so that I can make the trip to Tucson for two weeks.
Our house in OV has appreciated but who can predict how we will do with the sale. I have two weeks to get the job done and arrange for it to go on the market.
Two weeks in a respite facility is going to cost around $5k…..But the fact that such care is available is pretty wonderful. Later on, I may author an article on my travails of the last couple of years…
Making an annual list in January and reviewing what got done (and why) in December is an helpful in assessing the cost and personal value of owning any major item. Culling excess from my life is part (not my favorite part) of retirement. But once something is gone, I no longer need to tend to it. (Anything replaced almost immediately starts its own cycle of decay, a cautionary warning for adding back in.)
One thing about an over-55 community… I’m constantly reminded that “now” is a good time to get things done. One neighbor sold their unit last spring for the same reason you are selling. I’m wishing you and your spouse “the best” of a difficult situation and time.
Oro Valley, indeed most of the south of Arizona, is beautiful country. When I’m away from the desert (like I am now, tending the old house) I hold fond images and memories close. And am grateful for them.
Yes, it does take time and $$$ to keep a residence in a livable condition. Some people simply don’t have the funds, or prefer to spend their money elsewhere. In our resort we have more than a few handymen who do everything from change light bulbs to roof repairs and install patios. They trim trees and do landscaping, too. Some are more skillful than others. I have a long list of cautionary tales.
The challenge is doing it properly. There is a tendency to avoid required permitting. That can result in unsafe or questionable practices.
When considering a purchase it is prudent to hire professional inspectors to look for problems. That’s an optional step that some consider unnecessary.
When we sold our 3-BR condo in 2022 the inspector couldn’t find a single problem. That wasn’t an accide