Realistic expenses over the long haul rant

[Sarah in SC]

I love the design features of the tiny houses but wouldn't think the trailerable ones would be worth the effort for the size. I priced out a Deltec house (they are the octagonal ones with a ring truss system) and for a 520 sqft one, delivered, it was less than $50k. Not bad for a guest house.

A friend is working on a Quonset hut design, around 1500 sqft, that will cost him around the same.

Our house is 1500 sqft and cost a good bit more than that, even with the many salvaged parts that went into it.

I have always been interested in smaller homes, but the sub 300 sqft just isn't practical. If you like the clever use of space, check out Marilyn Cusato's cottages. Se originally designed them for post Katrina housing, but very few were ever built. The 576 is my dream guest cottage.

 

[JoeWras]

The biggest problem with the tiny home movement that I can see is that most of the homes seem very impractical for older people. They're almost never a single story, beds are often in a lofted space that requires climbing a ladder, etc. I'm 42, and could certainly climb a ladder, but that doesn't mean I want to if I have to get up to use the facilities in the middle of the night.

Well, actually, someone above mentioned the Vermont episode of Tiny House Nation. I just caught that episode. One of the things that they said they needed to fix was reaching to high storage areas. I don't know about you all, but as I age, I'm finding I have shoulder issues and reaching up can be a challenge some days. This is what they discovered. There are all sorts of tricks they use in the tiny house to store stuff or to live. You have to be nimble.

In any case, I think the discipline of thinking of living in 500 sq. ft. is fine. It helps you visualize how to declutter. I grew up in an apt. home of 1000 sq. ft. for a family of 4. But it was tough, especially with 1 bathroom. I don't want to go back there. A lot of these tiny homes have some real compromises like curtains for the bathroom door, etc. No thanks.

 

[haha]

But it was tough, especially with 1 bathroom. I don't want to go back there. A lot of these tiny homes have some real compromises like curtains for the bathroom door, etc. No thanks.

Amen. Tiny homes prove that some Americans will fall for anything, as long as they think it is new or cool and a coming thing.

Ha

 

[Mulligan]

Amen. Tiny homes prove that some Americans will fall for anything, as long as they think it is new or cool and a coming thing.

Ha

I can imagine how quickly a "neighborhood" of those places could easily turn into a slum area.


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[Sue J]

I enjoy the Tiny House show. I like how so many things are multipurpose and how many of the owners are trying for a fresh start, getting rid of houses and mortgages that are a burden or just looking to simplify. Good luck to them, I could not go that small although DH and I were blissfully happy for the first 8 years of our marriage in a 437 sq ft 1 bedroom apt.

I read this article this morning. It's a review by a woman who rented one with her mom for a few nights-
http://finance.yahoo.com/news/i-spe...what-micro-living-is-all-about-173756547.html

Their rental is one of the smaller ones. Interesting.


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[Walt34]

Their rental is one of the smaller ones. Interesting.

Interesting indeed. I could maybe make a go of it for a year alone if I had to. With DW or anyone else? No way.

 

[Sarah in SC]

I get tiny house stuff on my flipboard feed and read that article as well.
Thought it was hilarious about the toilet and having to go outside while her mom was using it and vice versa.

We lived on a 28 foot sailboat for a (VERY) long summer in the Bahamas and had to do the same thing! Don't miss that at all!

 

[BellBarbara]

Maybe the tiny house is not something to live in forever, but as part of the (hopefully) long period of retirement. Totally agree you can't live then when much older.

I like the "installed" small houses better than the ones on trailers.

 

[photoguy]

Has anyone been watching that series "Tiny House" or seen the documentary with the same name? I am fascinated by it. I could live in a tiny house, but only ALONE - no dogs or people.

I haven't seen this show but my wife is the step-brother of one the "founders" of the tiny home movement.

Although the houses are cool I think they are somewhat impractical and not very realistic for most. I understand that many of them have to be on trailers due to zoning requirements. What I would like to see is a whole lot more of this design creativity going into modest size homes/condos (say between 600-800 sq ft).

 

[JoeWras]

I haven't seen this show but my wife is the step-brother of one the "founders" of the tiny home movement.

Although the houses are cool I think they are somewhat impractical and not very realistic for most. I understand that many of them have to be on trailers due to zoning requirements. What I would like to see is a whole lot more of this design creativity going into modest size homes/condos (say between 600-800 sq ft).

Now you're talking. The VT house was on a foundation with real plumbing and electric. That's a start.

I grew up in 1000 sf, and I think some of the innovations this may bring would lend itself spectacularly to a condo of that size.

 

[powerplay]

I enjoy the Tiny House show. I like how so many things are multipurpose and how many of the owners are trying for a fresh start, getting rid of houses and mortgages that are a burden or just looking to simplify. Good luck to them, I could not go that small although DH and I were blissfully happy for the first 8 years of our marriage in a 437 sq ft 1 bedroom apt.

I read this article this morning. It's a review by a woman who rented one with her mom for a few nights-
http://finance.yahoo.com/news/i-spe...what-micro-living-is-all-about-173756547.html

Their rental is one of the smaller ones. Interesting.




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Evacuating the tiny house when someone uses the bathroom really sounds like fun in the cold winter! No mention of any shower facilities so I guess you just don't? Some of these tiny trailers which really are not houses are pretty extreme and could be a fad that will fade over time. I will happily stay in my 1500 sq ft sfh as long as I can.

 

[rodi]

My husband grew up in a 1200sf row house - one of 6 kids. So 8 people shared a bathroom. One of his brothers got into the "long shower" phase... When my husband needed a shower, and his brother was occupying, my husband learned the self defense technique of going to the basement and slowly turning the hot water valve off... so it seemed like the hot water ran out. When he heard the water turn off... he'd turn the hot water back on...

 

[dallas27]

Tiny houses are fine, the key is extending the outdoor space to be an extension of the indoor space. So 1000 sq foot home is still 2000 of living. Very common in florida, places with decent weather. Up north, you are stuck inside 6 months a year.


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[BellBarbara]

Seems like most of them are built in areas with loose to no building codes. I saw one in our state, Charleton MA, was on a trailer. The guy was young, and a missionary. He wanted to take his home with him - so his solution was pretty smart.

 

[JoeWras]

Seems like most of them are built in areas with loose to no building codes. I saw one in our state, Charleton MA, was on a trailer. The guy was young, and a missionary. He wanted to take his home with him - so his solution was pretty smart.

If it is on a trailer, it goes down a different code path which is much looser.

Some of them are built on foundations, but they risk running into some issues in certain jurisdictions which actually have certain requirements which may push the sq. footage up. For example, having "x" bedrooms may require certain amounts of egress space, windows, and so on. It gets tricky.

 

[FUEGO]

I'll skip the tiny houses, but I do continue to fantasize about buying one of the $35,000 condos a block down the street from me. "The neighbors" is probably the reason it's so cheap and the fact that most of the units are 30 years old and have original kitchens and interior furnishing.

1 bedroom, 1 full bath. 512 s.f. The real estate listing says it has a 16x14 living room, 8x8 kitchen, 8x8 dining room, 3x8 entryway, and if you add all that up it means the bedroom is probably smallish at 10x11. This would obviously be a better fit without our 3 kids. It's about 1/3 the size of our current house but probably about what we need sans kids. The kitchen might be a bit small but it would do.

Lakefront with patio or balcony, shopping and restaurants immediately across the street. I'd probably go for something like this if I wanted a smaller living space. HOA dues are $100/mo but probably covers most of the insurance, exterior maintenance and lawn maintenance, and maybe common utilities like water, sewer, trash (those costs currently run me well over $100/mo).

$35k all in for a 512 sf condo is a better value proposition (to me) than the $26k that the guy in the linked article (above) spent building his 168 sf tiny house. And you'd have to have land or rent a lot somewhere. I'd personally prefer city conveniences like being near everything, and I don't know if you can permanently live in a trailer like that in the city (unless you bribed your neighbors).

 

[JoeWras]

I'll skip the tiny houses, but I do continue to fantasize about buying one of the $35,000 condos a block down the street from me. "The neighbors" is probably the reason it's so cheap and the fact that most of the units are 30 years old and have original kitchens and interior furnishing.

1 bedroom, 1 full bath. 512 s.f. The real estate listing says it has a 16x14 living room, 8x8 kitchen, 8x8 dining room, 3x8 entryway, and if you add all that up it means the bedroom is probably smallish at 10x11. This would obviously be a better fit without our 3 kids. It's about 1/3 the size of our current house but probably about what we need sans kids. The kitchen might be a bit small but it would do.

Lakefront with patio or balcony, shopping and restaurants immediately across the street. I'd probably go for something like this if I wanted a smaller living space. HOA dues are $100/mo but probably covers most of the insurance, exterior maintenance and lawn maintenance, and maybe common utilities like water, sewer, trash (those costs currently run me well over $100/mo).

$35k all in for a 512 sf condo is a better value proposition (to me) than the $26k that the guy in the linked article (above) spent building his 168 sf tiny house. And you'd have to have land or rent a lot somewhere. I'd personally prefer city conveniences like being near everything, and I don't know if you can permanently live in a trailer like that in the city (unless you bribed your neighbors).

So, on the topic of "realistic expenses", I'm wondering if there are not some looming assessments on that condo, Fuego? That's the one thing that concerns me about condos. It is hard to plan for, but out of the blue, you can get hammered by some serious assessments.

I don't know if this applies the condo you see, but across NC, there are a lot of small private lakes that are getting notices from the municipality that their dams are not up to standard and have to be rebuilt. Think of it as a small version of the mess going on down in Hope Mills, NC.

 

[BellBarbara]

I warned my son when I helped him buy a condo that they had little reserves. One year later huge assessment to reside the buildings and repave the parking lot. When I owned a condo in California - it was super well run. No special assessments.

 

[FUEGO]

So, on the topic of "realistic expenses", I'm wondering if there are not some looming assessments on that condo, Fuego? That's the one thing that concerns me about condos. It is hard to plan for, but out of the blue, you can get hammered by some serious assessments.

I don't know if this applies the condo you see, but across NC, there are a lot of small private lakes that are getting notices from the municipality that their dams are not up to standard and have to be rebuilt. Think of it as a small version of the mess going on down in Hope Mills, NC.

That's a definite possibility. I haven't looked at their reserves or books since I'm not actually planning on buying it any time soon. They recently fixed up the exterior and painted, repaved the lot and reroofed IIRC (withing last 5 years). Also fixed exterior walkways, steps and railing. I imagine that was a special assessment.

The lake isn't an issue. I live on the same lake just up the street. The lake is city owned and in theory city maintained. The dam and spillway was just installed in 2004-05 so it should have many years of remaining life (good design, no scouring at the toe of the dam, spillway riprap in place, concrete in excellent condition to my former civil engineer eyes).

We have had a special assessment at a condo we owned in Chapel Hill. A few thousand dollars to replace all the exterior siding and the roof. 4-5% of the property value. No big deal for us even though we were in college, but for those with inadequate capital, a big problem (we heard other owners whining about it).

 

[seraphim]

Well, summer is over and I have enjoyed my time with the kids. I try and read a little each day on this forum and few others (MMM, etc) as I have learned a lot from my peers and gained perspective in my new normal. However, one thing that has me perplexed is reading about what others proclaim are their budgets and expenses, especially the ERE and MMM folks who proclaim to live on less than 40K per year. It is my opinion that a lot of these people do not factor in capital expenditures with their typical annual expenses. Let me give a simple example. A small family (3 kids or less) in America is going to have housing, transportation and maybe college expenses. As such, they need to have reserves for replacement for housing components, cars and some college costs. In my case, I have banked enough in college funds for my kids already, but I put about 5k a year in there for over 15 years. As to housing, I assume around 4K per year as a reserve which covers Roofing, Paint, HVAC, Water heater, Appliances and Maintenance equipment (lawn mower, etc) for a 20 yr cycle. Lastly, I buy a new car to me every 4 to 5 years (We drive our cars for 8 to 10 years). This means I need around 25K (today's dollars) each 5 years, so 5k per year.

Thus, if one is being realistic, this small family needs around 14k for cap ex or in my case at least 10K. My insurance costs are running around 24K and my housing costs (taxes, utilities, etc) less insurance and cap ex is running around 6K.

So, what I am saying is I find it hard to believe people are being realistic when they say they can live on less than 40k per year "all in" when I need at least 40K to cover insurance, housing and cap expenditures for large ticket items. My current budget is 70k net and it's tight. Remember, I have no mortgage, college funds banked and no other debt.

I feel compelled to drop in on the MMM and ERE crowd and point out that they may not be realistically factoring in all of life's costs. However, I brought this up here because most of you in the Early Retirement forum are the more experienced group and would like your thoughts and comments.

Just walking into this conversation, which I've not read in its entirety - so forgive me if I'm repetitious. Bear in mind, I normally don't feel compelled to point out anything to anybody - the effort is generally wasted lol.

Each person's situation is different - to attempt to group everyone generically is a fool's exercise. There are too many independent factors. I feel no need to explore other forums; this one has a large and varied base of experiences people whose insights I appreciate. That being said, we get a certain of new members who immediately ask, "Can I afford to retire with 'x' income and 'x' expenses." Normally, the answer is a conditional 'yes' - assuming they have provided accurate information, and provided they have no future emergencies. That is their responsibility, not ours, though members often ask if they've considered every possibility, which is often what the OP is wanting to find out. Hopefully, they make modifications to their budgets based on responses. I generally suggest they redefine their retirement budgets in terms of 'living' rather than 'surviving'.

You have a $70k net budget and call it it tight. We have a similar budget, which permits us to do pretty much whatever we want. We live in an area with an average COL, occasionally assist a starving artist son lol ( a lifestyle he chooses), and are in a near state of constant travel. I'm a DYI fanatic. Currently remodeling kitchen and master bath. All necessities are paid for. Other than a zero percent loan on a new truck ($656 a month) to pull our paid off RV, we have no debt. No student loans either. Our pension income is about $48,000 - we could easily live on that ,even with the truck loan, and have money (I estimate about $800 a month) to spare to set aside for emergencies - should we curtail our travel. That would also include us ignoring a 7 digit investment portfolio. I see no difficulty in surviving on $40k a year; surviving being the key word.

So what's the difference between you and I? Why is your $70k budget tight and ours generous? That's the important question. How do our lifestyles differ?




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[Rushmore]

"Surviving" is also a matter of perspective. I personally have never had more than $40k/yr to spend(gross was never more than 40k). So, I look at things like a new car or a trip as blessings rather than givens. I now live on under 20k/year as a retired person with no car payment and a paid for small(1300sq foot house). I stay busy with pleasant, to me anyway, things to do. Usually go on a trip once and sometimes twice a year.

 

[W2R]

"Surviving" is also a matter of perspective. I personally have never had more than $40k/yr to spend(gross was never more than 40k). So, I look at things like a new car or a trip as blessings rather than givens. I now live on under 20k/year as a retired person with no car payment and a paid for small(1300sq foot house). I stay busy with pleasant, to me anyway, things to do. Usually go on a trip once and sometimes twice a year.

That sounds like a great retired life to me. It is so nice to read about someone enjoying retirement without having to spend a lot.

I notice on your public profile that you live in South Dakota. Are the heating expenses high, there? I hope you don't have to suffer from the cold during the wintertime.

 

[daylatedollarshort]

How to live well without spending much money has become a hobby for me. Not because we are broke but just because I'd rather invest my money for now and eventually leave some to the kids and some to charity rather than see it go to a Maserati dealer or even the utility company.

My hero these days is Juliet Schor, the person who wrote the Overworked American and Overspent American. She also has a book called Plentitude that is how we try to live - work less, spend less, buy used, lower our ecological footprint, have multiple sources of income, focus on increasing free time, social relationships, and use high tech self provisioning to live well without spending a lot or working dawn to dusk like the Amish -

Synopsis | Juliet Schor

 

[Corporateburnout]

"Surviving" is also a matter of perspective. I personally have never had more than $40k/yr to spend(gross was never more than 40k). So, I look at things like a new car or a trip as blessings rather than givens. I now live on under 20k/year as a retired person with no car payment and a paid for small(1300sq foot house). I stay busy with pleasant, to me anyway, things to do. Usually go on a trip once and sometimes twice a year.

Congrats on being able to live on less than 20k/year while being content and happy in retirement. Each person's lifestyle, location, family size, family support, hobbies and wants are so different it makes it impossible to have a universal ER budget/spending.

Our retirement budget for two is 80K before taxes with an additional 5K accrual for unforeseen expenses and we have no debt. We could "survive" on 60K but it would negatively affect our quality of life. DW retired two years ago but I delayed my retirement until last June to insure we sustain this level of spending.

 

[Rushmore]

W2R, My heat bills are probably higher than yours, lol. I have always lived in colder climates,(I grew up in eastern SD, lived a while in Minnesota, lived almost 30 years in Montana and then moved to Western SD) and am one of those odd people who doesn't like heat. This summer was pretty mild but I suffer from the heat much more than from the cold. We broke an all time record yesterday and had snow. It was all gone this morning,lol

Daylatedollarshort, I just checked out that web site and bookmarked it for more reading. I will have to see if I can get the book from the library. I too find it a game to see how low I can comfortably go.

Corporateburnout, how I see it is someone whose retirement budget is `160k for 2 could see your 80k budget as barely surviving. It is how you look at it.