Optimization

In the last few months, we have been consistently receiving a new real estate paper in our mailbox. I enjoy the paper in the summer, because they’re good firestarter for my charcoal barbecue, otherwise I have to buy a print newspaper every few weeks. Last weekend while we were on a road-trip, my wife grabbed the paper out of the mailbox and was reading it to me while I was driving to a friend’s place.

Beyond having an idea of what our own townhouse is worth by looking up listings when we notice new “For Sale” signs in our condo complex, we’ve tried to avoid shopping around for houses. The main thing that would make us avoid even thinking about buying a new place is the hassle of moving. We try our hardest to reduce the amount of crap we have in our house, but somehow we just keep accumulating it. Rather than move, in the last couple of months, we’ve attempted to optimize the house we do own (at a whopping 1,050 square feet + a basement).

Last month, I completed a backyard “renovation”, which mainly meant giving away a bunch of heaving patio stones (incorrectly installed), building a big cedar planter box over a weekend and laying some new sod and cedar mulch. We now have an outdoor space that we hadn’t really used in the 5 years that we’d lived here because it was kind of gross to sit around. Total cost was under $150.

Our next project (which we hope to complete by next spring) is to convert our basement from a catch-all storage area, into a place we can actually use if we have people over. For the cost of a couch, some paint and trim, as well as a few trips to the Salvation Army and city dump, we’ll gain about 400 square feet to (maybe) use.

I can’t see us needing more space, and it always amazes me when I hear people talking about “upgrading” their house – moving from their current 1,200 square feet to 2,000 square feet, something that usually more than doubles their debt levels. When we were house shopping 5 years ago, something as simple as a garage added on to a similar townhouse was going to cost us an average of $25,000. Adding a single bedroom in our townhouse complex (still no garage) of identically built houses was going to add around $35,000. The marginal cost for this extra space seems excessive, and this is on about as low as “low-end” gets on housing in the city I live in.

We don’t really need two separate areas to sit in (a “new” basement and current living room), but we have the space available and it would be nice to sit in the much cooler basement in the summer. For very little work it might allow us to use more of our house – optimizing available space rather than even contemplating a costly upgrade.

Would you consider “upgrading” your house? What would make you do it? How would this impact your financial plans?

9 thoughts on “Optimization”

  1. Just DW and myself in one of those 2000+ square foot homes. Rediculous. Property tax is ~7K/year and of course must have a housekeeper to come and clean. Plus association fees=~14K pissed down the toilet every year.

  2. My wife and I just did a “reno” on our house as we have a brand new baby on the way. Our 1912 house (remodeled in 2006) did not have a railing installed because it was a fancy open concept remodel when we purchased it. Not having a railing is not to code in Alberta, and having a slippery hardwood staircase only made it worse. So we just had a carpet runner installed – $280 for carpet, $200 installed. Then got a deal on materials for the railing because we know the owner for $1,200 and then hired an expert to do the installation (which is extremely difficult work) for $1,100. So all in this month it cost us $2,780 for the work. I think that it really looks nice and probably contributes $0.50 to the dollar in increased equity in our home (never know though). It definitely hurts the savings as we won’t be able to contribute as much this month, but definitely necessary.

  3. “Upgraded” in 2012 by buying a house we didn’t need, but we that we will soon retire to. Real estate prices were very depressed at the time, so it was a definite bargain.

    It’s slightly smaller than our current home, has salmon & steelhead “river” frontage (glorified creek), and 4+ acres instead of our current junior acre.

    Problem is that it is not within commuting distance, so I must definitely retire and sell the current house before we can fully enjoy it.

    Short term financial effect has been less money in the bank and lower cashflow. However, compared with waiting until now to buy it, we’ve saved $50k.

  4. My house is 900 sqft and has 2 bedrooms for 2 adults and a baby. I figured that it will be ample space for 2 adults and 2 young kids.

    There is a lot of junk that can be gotten rid of and we can make a better effort of effectively using all the space before we move into a bigger house (if ever).

  5. We have a 3000 sq ft house with 2 kids, 2 adults. And yes, there is wasted space. Wish we had gone smaller. However, we purchased due to the unique lot on a mountain with space for chickens, dogs, wildlife etc and I love it. Its an indulgence. In the US, especially in the south, larger homes are pretty common, although I find it rather wasteful. In our area finding an 1800 sq ft house which is well built(and in the area we like), and on a nice lot is difficult.

  6. Wife and I are perfectly happy in our 900 sq ft. space. If we had chosen to have kids, it probably wouldn’t work.

    When we start to feel squeezed for space, we catch a ferry and head to our island acreage (10 acres). If we didn’t have this land, we might have had to buy a bigger place with a yard of some sort. But as it stands right now, our city place costs us a mere $1100 a year in property tax – very cheap in my expensive city. Makes incredible sense to stay exactly where we are. We are in such a sweet spot in terms of housing costs, that it is a HUGE reason I’m ER’ing in 2014. 🙂

  7. We have the same size condo as you though it has 3 BR and I assume you have 2. 2 of the bedrooms are quite small. But generally it’s plenty of room. I can’t imagine needing more for two adults. When we were house/condo shopping adding a garage to a similar condo would have cost us $50,000 extra, and adding a garage with a house would have been $100,000 extra to get the same quality of actual dwelling. We originally planned on a house with a garage, but when we realized we were basically paying $100,000 plus the higher utilities and property tax just to get a garage, we decided we’d do without.

  8. We bought a partially finished foreclosure 12 years ago on 7 acres for $80k when we didnt know a thing about ER. If hubby wasnt such a handy guy I’d never gone for it. Since then we’ve nearly finished the basement, replaced most of the windows, installed different flooring, replaced the shingle roof with metal, landscaped and built my husband’s automotive business and shop on the property. We paid off the 30 year mortgage in 10. We are 15 miles out of town and the only home in our neighborhood NOT bound by subdivision regulations. While I miss living in town where everything is within walking distance-especially during hard Wisconsin winters- my husband reminds me what we save in commuting costs by his working from home. The utilities and property taxes would be lower with a smaller place where every space is utilized, but I also think we would loose the opportunity to put our house to work for us the way we have been able to.

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