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June 9, 2008
first time home buyer
We are buying a small wood-frame house, have had an inspection and a couple contractors in to evaluate potential renovations/ They all say the house is in pretty good shape for the age (circa 1850) and it has a new roof, new boiler, fairly new plumbing/electric. I am still terrified about potential costs of home ownership. Can anyone either talk me down or give me a realistic assessement? We currently live ina co-op and pay 1K/mo. in maint. fees. If we set this amount into a savings acct to deal with home stuff should we be okay? Thanks for any insight!
Comments
I think you'll be fine. I assume its a 1-family, so you won't be dealing with renters. If you can afford to put 1k/mo away as a rainy day fund - even just for a year - and the building is in pretty good shape, I don't think you'll have any problem. I mean, even a brand new water heater installed would only be about one month of your current maintenance. After a year, you could remodel the bathroom really nicely with that money. If you are really nervous, just make sure you get the best homeowners insurance you can find. And remember you'll be paying heating bills in the winter, which are a huge bummer. All in all, I'll be you come out way, way ahead.
Posted by: slopenick at June 9, 2008 3:04 PM
We've owned a couple of old properties (1870s and 1900s), as well as a brand-new condo. I know it's cliche, but the old ones were built to last, and we've had no more problems with the old than we've had with the new.
Take the leap, and find a good handy man (or become one yourself).
Posted by: curiositykilledthecat at June 9, 2008 3:24 PM
If the foundation and siding are good and there's no termite problem, you've got a new roof and new plumbing/electric/heating. You've got the major money suckers covered. The rest is pretty much optional and pay-as-you-go.
Posted by: Steve at June 9, 2008 3:37 PM
Some things you didn't mention:
Lead or copper water main? If its lead you should get it replaced- the lead main will fail when you don't want it to. (around $3000)
Modern windows- you'll want something to provide decent insulation and noise reduction. ($500+ per window)
Nogging wall- a lot of the old frame houses have the exterior walls stuffed with bricks= not very good insulation. Combined with old windows this can cost a lot in heating. (not sure what this would cost to fix)
All in all your 1K/ mo is well more than it will cost to keep an old frame rowhouse running.
Posted by: Karka at June 9, 2008 5:02 PM
Thanks everyone -
It is a copper water main and there are modern windows. I don't know about the nogging wall - I've never heard that term. There is a crawlspace where you can see dirt (kind of a sub-basement) and that space is only about 4 ft wide, but I was going to try to add insulation there. Siding is good, there is one piece of wood that needs replacing (directly under a/c unit and I assume has water damage, inspection didn't show termites).
We are somewhat handy and plan to get more so - I'll probably be posting back again looking for more tips soon!
Posted by: WTbound at June 9, 2008 7:04 PM
You should be ok. You need to keep an emergency fund for things that you didn't mention and may break, like water or sewer main. Maintaining an old house, even a small one family house, is expensive. I know it may seem scary, but if you compare to what you are currently spending on your coop, it will probably not be significantly more expensive, and maybe even less. And it will be very satysfying that you are the one deciding how the money is spent and the building is yours.
Posted by: Ibis at June 9, 2008 7:16 PM
Hi, speaking from experience-old frames cost a lot to get up to par but once there you should not be spending $1k per month on maintenance. I've been there and am here now and can verify, it will be no where near that figure. Good luck!
Posted by: guest at June 9, 2008 10:01 PM
Look, you aren't comparing apples and oranges here. That 1K maintenance isn't all some sort of slush fund of the coop - in addition to repairs to the building, it covers your (1) property taxes, (2) water and sewer charges, (3) your heat and hot water (oil, gas, etc.) if you are in an older building with common boiler and hot water heaters, not your own for your unit, and (4) hallway and exterior (common area) electricity charges. Presumably you will still have those expenses, and you need to find out from the owner you are buying from what they are per month now. Then deduct that from your 1K. Obvious. If you haven't figured that out yet, I question whether you have truly done the math on your situation to figure this out. And you need to do the math - not post to some anonymous board.
No one here can tell you what you can afford. It depends too much on the (1) quality of your house, (2) how much maintenance has been deferred, i.e., how much stuff is falling apart, (3) how good you are at sourcing and sniffing out contractors who will do a good job and not cost too much (as hiring too cheap for shoddy work will cost you more in the long run), (4) how much is left in your bank account after closing, (5) your taste - whether you have to have the fanciest work done, (6) how much easy access to credit you have when you need it, (7) whether you can handle getting a $3500 - $5000 bill at once for repairs (on my four unit coop brownstone building, everything we needed to have done seemed to cost around $5000 or so), (8) the stability of your income, and (9) random chance.
Only your gut can tell you if you can handle it - there is always some risk involved - that's why people do lose their homes. Do the math.
Posted by: guest at June 10, 2008 9:55 AM
Oh, and I meant to say your maintenance also covers insurance on the building, which is expensive. (Your coop insurance is basically renters insurance - it covers your stuff only, and any fixtures (like kitchen cabinets) that have been added since conversion to coop - if you were smart enough to add that coverage when you bought insurance, if you even have it - many coop owners don't.) In any event, that coop coverage, whatever you have, is damn cheap compared to what you will pay to insure your new home from fire, etc.
Posted by: guest at June 11, 2008 11:41 AM
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