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Housing: Buy vs Build?
- Thread starter Ave8tor
- Start date
MasterBates
Well-Known Member
I did a custom house in JAX. Mine was partially built when I bought it, but we did get to choose the interior door locations and such. Made decisions that made sense to me and the ex, for example the cabinets are up high and tall, we're both over 6' tall, and hated whacking our heads on the cabinets when leaning over counters and stuff. Counters are 6" higher than a normal house, the breakfast bar is a foot higher than normal, tall toilets, etc.
Floors are tile in every room (for dog/cat freindlyness). We did away with the hallway going to the back door and just made the master bedroom and 2nd bedroom that much bigger. This stuff was all great for us when we built it, but now going to sell it, it's not helping us. The tile is nice if it was going to be rented like the original plan was, but now where it's being sold as part of the divorce, we get bad feedback from showings from it being ALL tile. (the area rugs have been removed by her, I don't know why).
That's just a couple examples, but it's coming back to bite me in the ass trying to sell the house.
Floors are tile in every room (for dog/cat freindlyness). We did away with the hallway going to the back door and just made the master bedroom and 2nd bedroom that much bigger. This stuff was all great for us when we built it, but now going to sell it, it's not helping us. The tile is nice if it was going to be rented like the original plan was, but now where it's being sold as part of the divorce, we get bad feedback from showings from it being ALL tile. (the area rugs have been removed by her, I don't know why).
That's just a couple examples, but it's coming back to bite me in the ass trying to sell the house.
Absolutely! We intentionally went with fewer "builder" upgrades for this specific reason. We did some pricing on our own after a couple of options seemed unusually high. Between the builder pushing them and the nitwit site agent for their realty trying to talk us into everything under the sun, we said "no thanks." We'll take the basic items on some stuff and upgrade later at our convenience and at a significantly lower cost. Site agent wants more commission, builder wants a bigger share for work he won't actually be doing himself... In the end it's all done by subcontractors who you could have do the work independently and save a ton of money (we've already used some of the builder's subs for things).
Did you get west coast Hornets? Neither Harrier base has been described as a garden spot.
If you are assigned to Cherry Point and you buy in the right location, you have the potential to remain in the same house for a longer period. Second tour orders to Lejeune followed by orders back to Cherry Point have allowed more than one Harrier Bubba to remain in the same house for a number of years. It's a bit of a drive to both bases, but you will have to make that sacrifice if you want to stay in the same house. If that interests you, look for homes near Bogue, Morehead City, Cape Carteret, or Emerald Isle.
I would buy vice build. It's a buyer's market on existing homes, and you won't have as much time as you think you'll have to install that sprinkler system or finish the landscaping for that brand new house. 10-12 hour days and deployments have a funny way of taking your free time.
Having just moved from Yuma, I would say the market is a little softer as compared to the Cherry Point/Lejeune area. Housing prices in Yuma are forecasted to finally stabilize next summer, while housing prices in the Cherry Point/Lejuene area have been stable (i.e. flat) for a while.
Whether you buy or build there is a good chance you will sell or rent the house in ~3 years. As you make your decision, you should take that into consideration.
Good luck. Feel free to PM me with any questions on a particular area in either Yuma or CP.
Best Regards,
Waldo
This is awesome advice that I'm going to have to sit on for a while. I noticed the second I bought my house, HGTV and the DIY Network immediately became more attractive! I have no idea how long we'll stay in our house, but I love upgrading but I'm going to hold off on your advice. I have to put the rest of the fence up, get guttering put on, bury some guttering runoff lines in the ground myself....and of course make the wife plant some flowers, but I guess I'll hold off after that. I don't think we plan on selling it if/when we leave, renting more likely. We think we bought at the perfect time and plan on letting our house increase in value vice sell after 3 years. Anyways, luckily it came with all the ammenities you mentioned earlier, so I'm hoping vice some paint the wife will be happy for a while.
stgcst
New Member
Same here, of all the places I've lived, Austin is the top! I could do without the insane property taxes (compared to Florida) and massive electric bills but as far as quality of life goes you can't beat it here....BTW I think we're at day 33 or so of triple digit heat.
I hear you. I've lived in south Tejas about a year so far, and the heat is relentless... At least in Florida you had that sea breeze to mitigate things.
Power bill is through the roof... I keep the place at 75 (warmer than I'd like), have my water heater turned down and keep the curtains all closed up and I'm still paying in the high $200s a month for power. This place is only 900 or so square feet too.
Thought I was getting a good deal with this place with low rent... Turns out I'm paying out the a$$ on the back end because I have an outdated AC unit and poor insulation. Live and learn.
stgcst
New Member
Try keeping it at 79 and $600 plus, bigger place though, with two A/C units but the summer kills me...they just put us on "water hours" now as well..
I can't wait to move to Jax and get an actual yard. I find yard work relaxing and love the smell of fresh cut grass. I am so sick of Padre Island rocks!
stgcst
New Member
I don't know...that St. Augustine grass is a pain to keep up...at least you can paint the rocks green.
I live in Central Texas and the wife keeps our thermostat at 80. So far the largest electric bill this year was $235. The last month it's been over 100° every day but a handful, I'm really not looking forward to the next bill.
On a side note; I just finished painting the kitchen walls. Looks like repainting the cabinets is next weekend’s task.
helo_wifey
Well-Known Member
We're finding that out first hand. The house we bought had always been a rental and the yard was the least of their worries. Between the cinch bugs and weeds we're slowing getting the yard back under control. It's definitely a lot of work.
Ken-if you like yard work so much you can come over to our house and work
Not that I disagree, but here are a few points to consider.
First off, in any housing upgrade situation, you don't want to customize your home beyond the value of comparable sized homes in your locale. Whether the market is red hot or stale, the appraiser is going to find similar sized homes that moved recently and if you're expecting a sales price above that, you've put yourself in tough situation and may have priced the value beyond what VA or other mortgage companies will finance. Just because you can (upgrade) doesn't always mean you should.
When in situation of getting into a new build and being able to make choices on appliances, flooring, etc., it is wise to compare what the builder is going to charge, but make sure you realize that you are financing those options and it isn't an apples to apples comparison. Look at what each dollar you're going to invest in monthly payments cost you per $1000 versus what the total value of the home will be. In a military market, moving into new build situations is risky because unless you're last home available, the next round of new buyers won't want your custom house when they can opportunity to do what you did with a new home and likely get help with closing costs from a motivated builder. You cannot hope to compete in that situation...and like MB attests, what makes sense for you may be a turn-off for potential buyers.
If you know you're moving in a few years and can reasonably assess strength of market for a few years hence (NOBODY has a crystal ball for that so there is an inherent risk regardless of past trends), it may be better for your cash flow to use opportunity to finance your upgrades in the mortagage vice out of your pocket. Say cost to you is $7 per 1,000 financed and you go for $20,000 of upgrades. That would equate to boosting your mortgage payment $140 a month, but wait....out of that $140, you're getting opportunity to write off a percentage on your taxes. If you are dual income, or in tax bracket that outs you in ~ 20+% of your adjusted gross, that equates to only paying for 80 cents on a dollar when it's all said and done so it's really an expense of $112 per month until you sell the house (note: as long as the market is stable or increasing in value). Adjust that up or down depending on your final tax bracket calculation. So if your upgrades are at that number ($112/month for likely no more than 3 years), you're only tapping your monthly cash flow for roughly $4000 spread evenly over that time span and you had benefit of $20,000 of upgrades from the start. It doesn't matter if you are Bob Villa, Jr and have seen every HGTV show so labor isn't in your calculation, the cost of materials alone are going to tap your monthly cash flow and you should not be considering (other) financing or tapping your savings/ready cash either. So even if you want to do tile or countertops yourself, do you have that much extra cashflow monthly to do $10,000 (assuming your cost is materials alone) worth of upgrades even spread over, say, 12 months? And, if you do, is there something else you want to do with it (ie upgrading your wheels)? And remember, it is difficult to recoup cost of additions and/or upgrades to your home as any realtor will tell you.
Some upgrades improve attractiveness to buyers so they are good bets, others only give you satisfaction of having a customized home so you may end up paying a penalty so-to-speak. A priority should be curbside appeal since most potential buyers (or renters for that matter) get hooked as they pull up to an attractive home. What's inside seals the deal they're already predisposed to make. You can't hardly go wrong with doing landscaping yourself especially low maintenance type efforts that you do yourself and shop smartly for attractive plants and trees. A lot of buyers aren't the do-it-yourself types so they don't want to see the potential of a home inside or out (unless they're looking for a steal, which is counter to your objectives), they want a turn-key situation that they can impress frineds and enjoy. HGTV has lots of great ideas for quick fixes and low cost upgrades for exterior and interiors so watching and heeding their advice is a smart move.
I'll throw out a third option for those who are handy with tools. Find an undervalued home in an established neighborhood that isn't getting much attention from the owners or buyers and get in cheap. Don't do too much that will put you above market for nicest homes in neighborhood, but get after the lanscaping and simpler interior upgrades. Your neighbors will appreciate the transformation and when it comes time to sell, you'll have no problem finding a buyer wanting to take advantage of the sum of your efforts. You still have a cashflow challenge/decision to make, but a second mortgage is an option with prevailing low interest rates IF you don't overstep the loan to value ratio (the mortgage companies wouldn't let you anyway). It's like the Flip this House episodes on HGTV only you're living in the house. This strategy works extremely well in an increasing warm to hot market. A cold market does offer opportunity to get in cheap, but unless it improves, you're only setting yourself up to owe more than you can sell the house for when it comes time to move. Renting it is an option at that point and your upgrades can make a difference in a cold renter's market. Last thing you want is to get into renting out your home after you depart area and have it sit unrented especially between tenants as your cashflow will really be impacted.
Good luck in whatever you decide to do. Remember that the temptation to improve your nest has to make sense for rolling out of the house when your tour ends. If you can wrangle shore duty close to your sea duty and back to sea duty in same locale, you're in best situation to get some return on investment, but you can't count on that happening.
I don't have any experience in regards to the markets your considering, but I do have a bit in the Buy vs Build. My family has done real estate in WI for 60+ years, so I've grown up with it as a family thing. We did "Flips" before HGTV even existed.
I'd start by asking yourself and the wife what you want location wise: Schools/Shopping/Recreation/Boating/Dining/Nightlife/etc/etc? Go from there and pick the area you want to live in first. If you love the place, but you're 20 minutes away from the nearest non-Mexican grocery store, that's bad. Buy vs build will be in better perspective then I'd think.
Most building is occuring in new subdivisions/developments. I'd say all but 95% are carbon copy track housing. My friend built with a builder (simple plan, no upgrades to save $$) in a new subdivision that has exactly 4 house designs (McMansions), no trees taller than 15ft, and a subdivision association president with more authority than some Rear Adms. Want to build a shed for your mower and some toys? Nope, GTFO. On a plus side, they have a playground with hot MILFs.
So that's your standard build today. On the other side, my brother just bought his dream house. Only it was the dream lot on a lake with a tiny little cottage. We essentially stripped it down to 4 walls and rebuilt with an addition, doubling sq footage. We subbed out some construction work (excavation, foundation wall pour, main electrical hookup) but did a ton of it ourselves. My sister in law was a bit angry for most of the winter and it definitely was a stress factor, as they were in and out of hotels during the project to save from having to rent a place. Worth it? Totally. Easily got $3 back in value for every $1 we spent. Con? 6 months after we "finished" there's still a bunch of little stuff not done. A wife and 2 kids tends to sap up your free time.
Third option is straight up buying. Get your free $8k from the govt. If it's exactly in move in condition, expect to pay a premium based on the area. Places that need some work (maybe a new bathroom/kitchen, open up a wall, etc) are where you should focus. If you do hire a contractor, most I know will take 10-20% off the top if you pay cash. Local NARI, BBB, or Angie's List are great places to find a reputable contractor. Craigslist is not.
Things 90% of adult males should be able to do: Basic interior framing, rough electric (aka pulling lines), rough plumbing, roof tearoff, hardwood flooring, basic tiling, painting. Most of the people who do this work are college kids/transient labor with little to no actual skill.
Things you need special tools/skills and should probably hire out: Excavation, foundation work, load bearing wall work, some advanced HVAC, hooking up to street power, things on tall ladders. Mostly because mistakes here will either kill you or someone you love.
Some interior finishes like casework and drywall I personally prefer to hire out because I can do it right, it would just take way too long. Little finish mistakes like that are killers you'll always see.
I'd start by asking yourself and the wife what you want location wise: Schools/Shopping/Recreation/Boating/Dining/Nightlife/etc/etc? Go from there and pick the area you want to live in first. If you love the place, but you're 20 minutes away from the nearest non-Mexican grocery store, that's bad. Buy vs build will be in better perspective then I'd think.
Most building is occuring in new subdivisions/developments. I'd say all but 95% are carbon copy track housing. My friend built with a builder (simple plan, no upgrades to save $$) in a new subdivision that has exactly 4 house designs (McMansions), no trees taller than 15ft, and a subdivision association president with more authority than some Rear Adms. Want to build a shed for your mower and some toys? Nope, GTFO. On a plus side, they have a playground with hot MILFs.
So that's your standard build today. On the other side, my brother just bought his dream house. Only it was the dream lot on a lake with a tiny little cottage. We essentially stripped it down to 4 walls and rebuilt with an addition, doubling sq footage. We subbed out some construction work (excavation, foundation wall pour, main electrical hookup) but did a ton of it ourselves. My sister in law was a bit angry for most of the winter and it definitely was a stress factor, as they were in and out of hotels during the project to save from having to rent a place. Worth it? Totally. Easily got $3 back in value for every $1 we spent. Con? 6 months after we "finished" there's still a bunch of little stuff not done. A wife and 2 kids tends to sap up your free time.
Third option is straight up buying. Get your free $8k from the govt. If it's exactly in move in condition, expect to pay a premium based on the area. Places that need some work (maybe a new bathroom/kitchen, open up a wall, etc) are where you should focus. If you do hire a contractor, most I know will take 10-20% off the top if you pay cash. Local NARI, BBB, or Angie's List are great places to find a reputable contractor. Craigslist is not.
Things 90% of adult males should be able to do: Basic interior framing, rough electric (aka pulling lines), rough plumbing, roof tearoff, hardwood flooring, basic tiling, painting. Most of the people who do this work are college kids/transient labor with little to no actual skill.
Things you need special tools/skills and should probably hire out: Excavation, foundation work, load bearing wall work, some advanced HVAC, hooking up to street power, things on tall ladders. Mostly because mistakes here will either kill you or someone you love.
Some interior finishes like casework and drywall I personally prefer to hire out because I can do it right, it would just take way too long. Little finish mistakes like that are killers you'll always see.