Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 04-01-2013, 11:35 PM   #21
Thinks s/he gets paid by the post
walkinwood's Avatar
 
Join Date: Jul 2006
Location: Denver
Posts: 2,676
Based on your first two answers above, I think you're taking a financial risk of having to sell too soon (in case you move) and/or not being able to find a buyer who likes the property since it is far from the norm for the area.

However, no one (that I know) buys/builds a home from purely a financial viewpoint.

All the best.
__________________

__________________
walkinwood is online now   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 04-02-2013, 12:08 AM   #22
Full time employment: Posting here.
 
Join Date: Jun 2006
Posts: 926
As others have said it looks like you are going to build a house. It does seem to me that today it is cheaper to buy an already built home than to build an equivalent one. OTOH, with so few people building their dream homes compared to the number of people who were building them ten years ago there must be a very large number of people who are just waiting for the housing market to recover so the $$ numbers can more easily justify the decision to build.
__________________

__________________
CW4, USA-(ret)
RN, BSN-(ret)
jclarksnakes is offline   Reply With Quote
Old 04-02-2013, 03:14 AM   #23
Thinks s/he gets paid by the post
 
Join Date: Apr 2006
Location: North Bay
Posts: 1,026
Quote:
Originally Posted by someguy
Anyone legitimately think this is a bad idea?
No. I think it's a good idea, but not necessarily from a strictly economic point of view. But we don't take vacations or have kids for strictly economic reasons either. Enjoy the process as well as the result, and realize that stress is just a normal part of the process. I've found the building process stressful but very satisfying. Raising kids, too!
__________________
scrinch is offline   Reply With Quote
Old 04-02-2013, 04:10 AM   #24
Thinks s/he gets paid by the post
obgyn65's Avatar
 
Join Date: Sep 2010
Location: midwestern city
Posts: 4,061
From what I have read in your posts above, I would not do it.
Quote:
Originally Posted by someguy View Post
Anyone legitimately think this is a bad idea?
__________________
Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
obgyn65 is offline   Reply With Quote
Old 04-02-2013, 06:20 AM   #25
Moderator
Walt34's Avatar
 
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 16,501
"If she ain't happy, ain't nobody happy."

When we moved to WV there were some similarities. I had bought the house we lived in before we were married and she liked it, had a hand in furnishing/decorating and such, but she played no role in picking the house.

While not completely custom built, the WV house had pages of options top pick from and DW thoroughly enjoyed the process of going through that and had pretty much free rein. The only point of disagreement was the color of the cabinets (she wanted light, I wanted dark, we got a medium) but the important point was that now it was hers too, much more so than the other one.

So build the house.
__________________
I heard the call to do nothing. So I answered it.
Walt34 is offline   Reply With Quote
Old 04-02-2013, 07:34 AM   #26
Thinks s/he gets paid by the post
DFW_M5's Avatar
 
Join Date: Sep 2003
Posts: 4,980
Our first home was an older pre-existing home that essentially became a custom rebuilt home. Sometimes there is a lot to be said about getting it exactly the way you want from the get go. While I would probably enjoy the process of doing a custom build, I doubt the timeframe, cost and construction headaches would make this something I would want to entertain at this point in my life.
__________________
Doing things today that others won't, to do things tomorrow that others can't. Of course I'm referring to workouts, not robbing banks.
DFW_M5 is offline   Reply With Quote
Old 04-02-2013, 07:43 AM   #27
Recycles dryer sheets
 
Join Date: Jun 2012
Posts: 489
Thanks to everyone for the thoughts and advice. It's very helpful.

If I had instead posted that the DW loves cars and would like a brand-new, custom-ordered [insert BMW/Jag/Mercedes/Porsche], I imagine the majority (or even every) reply would have been "don't do it--waste of money". To those who said "do it" to the custom house but would say "don't" to the car...what's different? It would be a lot more feasible to sell the fancy car (taking a hit for both new car depreciation and for the expensive custom order) if priorities or finances changed.
__________________
someguy is offline   Reply With Quote
Old 04-02-2013, 07:48 AM   #28
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,074
Quote:
Originally Posted by someguy View Post
To those who said "do it" to the custom house but would say "don't" to the car...what's different?
Houses usually appreciate, new cars usually don't.

Oh, and you can't live in your car until you sell...at least not comfortably.
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 04-02-2013, 07:52 AM   #29
Moderator Emeritus
Bestwifeever's Avatar
 
Join Date: Sep 2007
Posts: 16,372
Quote:
Originally Posted by Semiretired2008 View Post
Once we get fully into retirement mode (kind of taking a test sabbatical for now from project work) we plan on moving to a final location and building a final home. ...
Quote:
Originally Posted by someguy View Post

We are hoping/planning on 8-10 years until retirement. As far as how long we'll stay, it's hard to say. DW also periodically (although not as frequently) talks about moving to CA, or HI, or southern Spain, or LAM. She tends to get tired of something and want a change -- sometimes any change....
Okay, given these comments, I vote against building. You expect to relocate in retirement in 8 to 10 year, so subtracting at least a year for the building as you're still figuring this out, you'll be building and then selling a new house that would appeal to limited buyers (vs the homes more in keeping with your neighborhood) so possibly you would lose money on it--and then you would build again at your retirement locale? I think I'd just try to wait this out.

And your spouse "tends to get tired of something and wants a change -- sometimes any change." Which maybe is what this new house would be, just satisfying her need for a change. Can you just distract her with repainting and new bathroom vanities, or new landscaping with a fountain, or something until she gets over this idea?

Good luck--if you build, I'm sure it will be awesome, but I'm voting no just based on your own comments.
__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
Bestwifeever is offline   Reply With Quote
Old 04-02-2013, 08:14 AM   #30
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 5,164
Quote:
Originally Posted by someguy View Post
To those who said "do it" to the custom house but would say "don't" to the car...what's different?
That's a good question. Part of my answer is that I view a car as a way to get from one place to another, so beyond reliability, a certain level of comfort, and the capacity to carry the people and cargo I transport, it doesn't matter that much. If someone is really into the driving experience, I wouldn't criticize what they choose. Too often a car is a status symbol, and that's where I think it becomes a waste.

Another big reason for me is the ability to tailor a house for particular needs. If I want a room for trains, a pool table, a grand piano, or an indoor lap pool, for example, I can splurge on that. If I don't want to pay for formal rooms or a home theater (not standard, but sometimes comes these days with houses that have other extras(), I can omit those. I can design it in mind for the type of entertaining I do (large crowds, smaller parties, or little at all) and get the right number of bedrooms based on family needs. My property has a great view, and I was able to maximize it with my plan.

In short, you can build a house with a few luxuries you want without paying for luxuries you don't. Or at a different level, you can build an economy house but with a few extra comforts or needs that are important to you.

The appreciation aspect is debatable. It's true that houses appreciate, but a specialized house may not appreciate as much, or may be tougher to sell, because you have to find a buyer who appreciates the extras you did add without missing the ones you skipped. To protect against this you may still want to keep smaller formal areas, and even if it's just the two of you and a rare overnight guest you should have more than 2 bedrooms unless its a small cottage or cabin.
__________________
RunningBum is offline   Reply With Quote
car and house
Old 04-02-2013, 08:52 AM   #31
Recycles dryer sheets
 
Join Date: Jun 2012
Posts: 489
car and house

Quote:
Originally Posted by REWahoo View Post
Houses usually appreciate, new cars usually don't.
I think you may be applying traditional wisdom to a non-traditional situation. At least in this part of the country, 99 times out of 100, a "typical" (cookie cutter in planned community) brand-new house will see an immediate depreciation hit, much like a new car. Except in this case, the depreciation hits as soon as the house is mostly completed, not when someone first buys it. I don't know this, but I suspect the two main reasons for this depreciation are 1) the advantage of getting exactly what you want is lost and 2) the new home builder pads the build-to-order price to cover contingencies. Any way, a cookie-cutter house that a local volume builder here will build you today for $250K would immediately resell for perhaps $225-$235K.

This depreciation is further an issue when you get into full custom builds in less cookie-cutter/planned communities. The builder probably loses any economies of scale, and they can't reuse plans like a copy machine. And, buyers' expectations to get exactly what THEY want goes up.

As a more specific example, one area we're looking at is mostly built out, but has one lot that someone bought to build on later, but ended up not being able to. The average resell price in the area (lot + house) is approximately $150/square foot. I estimate our cost just to build the house will be around that mark. So out of the gate, we're down anywhere from $60-$120K (i.e. cost of lot). There may be a modest premium to be gained by having a newer roof/HVAC/etc than all the surrounding homes, but there is also the somewhat deviant style and significantly smaller size cutting the other way.

As far as appreciation goes, RunningBum has hit the nail on the head. As we all know, history is no predicter of the future, but cookie-cutter homes built in our neck of the woods 10-15 years ago are selling for about what the original buyer paid to have them built. And they typically are going to have had money put into them in the meantime -- new kitchens, finished basement, landscaping, etc. Higher-end semi-custom and full custom are selling below what was originally paid.

PErsonally, I don't consider a primary residence as an investment. So I think my car-house analogy holds water. Most of us need a house and most of us need a car. In my hypo, we are considering spending more than necessary to move from a need to a want. Purchasers of both items pay a premium for brand-new in the form of an immediate depreciation hit. Purchasers also take a hit for going more custom, too. Depreciation is pretty much guaranteed for the car and has been the case for houses here, too. Admittedly, during other periods, modest (e.g., 3% annual) appreciation of houses is possible.
__________________
someguy is offline   Reply With Quote
Old 04-02-2013, 08:54 AM   #32
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,964
Quote:
Originally Posted by someguy View Post
We are hoping/planning on 8-10 years until retirement. As far as how long we'll stay, it's hard to say. DW also periodically (although not as frequently) talks about moving to CA, or HI, or southern Spain, or LAM. She tends to get tired of something and want a change -- sometimes any change.
Yeah, that changes my earlier reply...best of luck.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 04-02-2013, 09:11 AM   #33
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
travelover's Avatar
 
Join Date: Mar 2007
Posts: 9,874
Sounds like your wife wants it, so you don't have a choice. I've never had a house built, but my observation of those that did convinced me that I never want to. YMMV
__________________
Yes, I have achieved work / life balance.
travelover is online now   Reply With Quote
Old 04-02-2013, 09:18 AM   #34
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,074
Quote:
Originally Posted by someguy View Post
I think you may be applying traditional wisdom to a non-traditional situation.
Quote:
Originally Posted by someguy View Post
She tends to get tired of something and want a change -- sometimes any change.
You're wasting your time asking for our advice - you're doomed.
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 04-02-2013, 08:50 PM   #35
Full time employment: Posting here.
 
Join Date: Jun 2006
Posts: 926
From a purely financial standpoint the expensive luxury car and the custom built home are both poor choices. But there is more to life than money. If you have the money spend it on whatever it is that makes you, and perhaps more importantly your wife happy. In your case I do think the relatively short length of time you will be in the house makes it a poor choice.
__________________
CW4, USA-(ret)
RN, BSN-(ret)
jclarksnakes is offline   Reply With Quote
Old 04-02-2013, 10:30 PM   #36
gone traveling
 
Join Date: Oct 2012
Posts: 329
If you got the money and will take great pleasure in living in a house that you designed and built, then go for it.
__________________
UserRequested is offline   Reply With Quote
Old 04-02-2013, 10:34 PM   #37
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 5,326
Personally, I would not have a house built again, but my husband agrees with that so for us it is an easy decision. We'd rather live light, small and be free to travel. Having a house built is really time consuming.

But since this is something important to your wife and you do not seem all that opposed and can afford it, going ahead with the house might make her happy enough that you should consider going along with it.
__________________
daylatedollarshort is offline   Reply With Quote
Old 04-02-2013, 11:13 PM   #38
Dryer sheet wannabe
 
Join Date: Mar 2013
Location: Pine
Posts: 18
I recently did a major rennovation and addition to make our house our dream home and i can tell you that if you can find a nice home in inventory somewhere you'll get a much better deal than building one. Existing homes are all pretty much "on sale" everywhere, but builders and contractors want top dollar for their services these days. You can find a much better value in a pre-owned home.
__________________
Dave_S is offline   Reply With Quote
Old 04-03-2013, 06:44 AM   #39
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Amethyst's Avatar
 
Join Date: Dec 2008
Posts: 5,874
I wouldn't build a house unless both parties very much want to.

Would all the "DW always win" and "if the wife wants it, you must get it to have peace" answers change if the male spouse was the one who wants to build?

Amethyst
__________________
If you understood everything I say, you'd be me ~ Miles Davis
'There is only one success – to be able to spend your life in your own way.’ Christopher Morley.
Amethyst is offline   Reply With Quote
Old 04-03-2013, 09:39 AM   #40
Full time employment: Posting here.
Badger's Avatar
 
Join Date: Nov 2008
Posts: 825
I went through the same thing a few years ago. I was already in the house when we married and my wife didn't feel it was really "ours". She also tends to like change frequently and although it doesn't always work out well she has a good attitude and rolls with it. On the other hand I research and plan more to avoid "buyers remorse".

I researched places all over the country where we might want to retire to when the time came as well as we visited numerous homes being built in developments with lots of amenities.

The bottom line was it would be very expensive for us to build due to HOA, tax increases, etc. We also couldn't find a better location than where we are at the beach, a few blocks from fire and police dept., 2 miles from a military base, 20 minute drive to a large college and a large University, and in what has become a very nice neighborhood in a small town near a large city. Our house is now about 1700 sqft. All the other houses on our street have been torn down and replaced with McMansions (no tax increase for us but property value has gone up tremendously).

Our solution has been to do some remodeling and landscaping during the past 10 years that include total kitchen remodel, total bathroom remodel, 20'x10' sunroom addition with tile floor, new driveway that curves around to the back yard, landscaped backyard with 24'x32' patio, 3 tiered pergola and hot tub, citrus, fig trees, and blueberry bushes, and an organic raised bed garden. Plans are being made for a large paved walkway and front patio as we complete landscaping of the front yard. Some changes I did myself and others were hired out. Total cost will have been about 60k. She had total say in what and how it was to be done. So now, in addition to having the title changed into both our names, she feels better about the house being ours.

Now we will spend our retirement money on playing, travel, entertainment, and good food.

Cheers!
__________________

__________________
Badger is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 11:06 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.