Is your home an investment? (debate question)
c9pilot
10 years ago
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jewelisfabulous
10 years agolast modified: 9 years agoAcadiafun
10 years agolast modified: 9 years agoRelated Discussions
What's a 'healthy' investment into an old home?
Comments (14)victoriandream, My DH is an attorney & banker. He is NOT a handyman although he tries...Bless his heart. We are both gardeners &, if I do say so myself, accomplished gardeners. So, we've done the garden restoration & hired 95% of the home renovations. It took us about 15 minutes with a heat gun to realize that we were never going to be able to strip all that paint off the millwork ourselves. And, if we did we would ruin the woodwork! :) There are times in economic & societal cycles when historic homes ARE a good investment. We are not now nor have we been in that type of cycle for, maybe, the past 8 years thereabouts. Will it again turn in favor of historic homes? Sure, but who knows when? Just like...if one had such a desire...avacado-green carpet is again available. (Ugh!) Everything is cyclical. You should, IMO, never purchase an historic home with the intention of making a bundle. That's not realistic. Facts are that it costs considerably more to restore these homes than it would to bulldoze & build new on the site. Those pesky appraisers & lenders don't share our emotional attachments so they often block our dreams of grandeur. In many cases, they save us from ourselves! Yes, we had kids. The ranged in age from 8 to 13 when we purchased that 1848 colonial. Our son is a pro at stripping wallpaper! During their teen years they had great ghost stories to entertain their friends! They may have suffered from things we did as parents (?); but I don't believe living in a period home did them any lasting damage. LOL You will know your stewardship is over when you hesitate before starting the next project. Or, you'll know when the checkbook is running on fumes because you can't even stay in a period home, much less restore it, without being bankrolled. They suck money like a vacuum from your wallet. Your daughter is precious! And, what a grand lady your home is! Wonderful that you've got old pictures for a guide. Did you have to strip ALL that millwork? OMG! I think you've done a lovely job of maintaining the 'feel' for the kitchen while still bringing to a 21st century functionality. I love the windows. The windows in our 1848 home were narrow & tall. Window treatments were like trying to dress spaghetti! Yes, our East Lake, Brilliant Period Cut Glass, & tapestries would have worked wonderfully in your home. The auction was sorta fun...we've actually done that thing twice (auctioning off our entire household...that's how we've managed to upgrade our collections...buy, sell & then re-purchase fewer but higher quality pieces). I've got a cupboard that would be lovely in your kitchen...it's c. 1865 so very appropriate to your home. Here's its official description: A circa 1860-1870 step-back cupboard having pie shelf beneath shaped apron beneath a top case consisting of pair of paneled doors with tombstone and molded design with applied cornice molding. Top case rests on bottom case; double drawers above conforming paneled doors having recessed tombstone and molded design matching doors in top case; side panels of lower case also with inset tombstone shaped panels; side of bottom case terminates with successful "cupids bow" base cutout; front apron and feet conform to shaping above pie shelf. This cupboard retains desirable original chrome yellow surface with red highlights; faux birds eye decoration. (84-inches tall X 45-inches wide X 19 1/8-inches deep.) That's funny about you wanting to become boaters! We started with a small 21' sport lobster boat & quickly got a bad case of "Two-footitis". That's a common disease amongst boaters & it's contagious. We ended up with this...she's a Nordic Tug outfitted for long-distance cruising...the Bahamas to Maine. Stay away from boat shows. They are dangerous places! rofl I can really understand why you fell in love with your home & I'm sure she's grateful for your efforts. I know this may sound like blasphemy; but, have you considered a B&B? If not your heart, at least your tax returns would thank you. :) Your family will make many wonderful memories living in that house. If it were me, I'd sigh & start on that siding before the season gets away! :) /tricia...See MoreHome Investments in Tennessee via Tax Lien Certificates
Comments (24)"Tax lien sales can be quite a good investment. Just think, where are you getting 10% return on your investments today. Your return is guaranteed, plus there is a possibility, if you want to pursue it, that you could end up owning the property." No your return is not guaranteed. If the owner does not pay you, you have to foreclose (and never get the taxes you paid back). You have to pay the price you bid, and the owner gets the difference between your purchase price and the balance of the taxes. I have given up on tax auctions because the prices get bid up to or over market price. Years ago (before the auctions were crazy) I bid on what was listed as 5 acres of vacant land. After we did the title search it turned out there was nothing there. It was listed as "the remainder" of a farm that was divided up between children. They started with X amount of acres surveyed over 100 years ago, and gave X amount to one son, X amount to another, X amount to another, and there was 5 acres difference as "the remainder" The old survey was probably wrong. The treasurer said that was not unusual, and she would love to clean them up. I could get a refund if I could get the assessment office to agree. But to do that I would have to get a survey done. The survey cost was more that what I paid for the taxes. My lawyer said just walk away which I did....See MoreDo you spend more on your house or your home?
Comments (34)In this house, we've spent a lot more on the house than furniture & decor. I bought it as a starter house four years ago, then after we got married (two years ago) and started looking for another house, we realized we were in love with the neighborhood and our street in particular, and decided to stay. It will not be a forever house, but realistically we should be here for the next 3-5 years or so, maybe longer. There are still many more expensive 'house' projects to be done. I replaced most of the flooring before I moved in, and all of the appliances. The heart of pine floors in the living room need repairs which require an antique floor specialist and I fear will be very costly. And we plan to remodel/expand the second story within the next year, which will be a huge expense. So we could put all of our extra money into the house indefinitely. But late last year I started working more on the 'home' aspect, because I was tired of feeling ambivalent about the decor, and tired of having so many rooms that are about 80% 'done.' Of course with the economy, my timing couldn't be worse! Since I thought I'd trade up in a few years, and had spent so much money on flooring, etc., I only purchased a few essential pieces of furniture, and otherwise used things that I'd had in prior rentals. So there are still quite a few gaps to fill, although several of my friends who do not care about decorating think the house looks quite 'done' and don't understand why I'm dissatisfied (and I suspect that DH agrees with them to some extent!). One thing I've learned with some of my recent purchases is that furniture can solve some of the functionality problems that the house has. Storage pieces can be very expensive, but they're worth it. And even the scale of our non-storage furniture can change the way that the rooms function, not to mention layout & furniture placement. So that makes me feel more comfortable spending money on the 'home' aspect, because some of these changes have really made the house much more comfortable to live & entertain in....See MoreInvesting for your Future
Comments (22)@ azmom - I am going to answer your questions somewhat out of order, and this is going to be a long post. Sorry. First we need to establish that everyone knows what a stock price is. Many people think that a stock price is a representation of the value of a company. It is not. A stock price is the present value of expected future cash in-flows. As a hypothetical, if a company were started that said from the beginning they will never pay a dividend nor will they cease operations until bankruptcy, then the stock value, regardless of the company's balance sheet, would be zero. The second thing to establish is the idea of risk and reward. There is no such thing as an investment that is too risky. There are just investments that are too risky for the return they offer. An investment with a 90% chance of total loss may still be good if the upside is 20 times your original investment. If you could get enough similar investments then ideally you could make great returns. And finally - the great equalizer - the market can stay irrational a lot longer than you can stay solvent. This happened in the mortgage crisis, everyone knew we were on a real estate bubble and we just stayed there. For years and years and years parts of this country sat on a real estate bubble and a lot of people who bet against it too early lost a lot of money. Now on to answers and opinions. I have been blindly investing in companies/products I personally like ( mistakes such as I like gizmos and hate bonds). - I am a big fan of something called efficient market hypothesis, which you can google for a more detailed explanation. I have some peers who swear by it, while others don't like it, but one apparent truth is, investing as if it is true leads to more successful investing. It basically says that you can't beat the market without some type of insider information. Given this I avoid investing in specific companies whenever possible, I personally identify my risk appetite and invest in different segments that meet the criteria. Even though I have a healthy risk appetite I mitigate losses through diversification in sectors and among sectors. Over the years I have built an aggressive equity portfolio, I know I need to dial down to moderate and balanced one, but I am not sure how to change that. - You simply move your risk appetite down a little. I am personally not a big fan of bonds either, so I avoid them, but there is nothing wrong with moving from emerging markets and small cap to mid and large cap. If one has a paid for home, and living expense (tax, insurance, property maintenance and tax..etc.) would be fully covered by pension and SS, why a 60ish person could not invest as a 30ish? - A risk appetite is a personal thing, but generally if yours doesn't change you probably were a little too conservative early. As you age your risk appetite generally shifts from generation to protection. Sometimes, because people have more money than needed, they will develop a split strategy, where asset protection is a goal for a portion of their portfolio and significant asset generation is a goal for the portion. But, when investing, there is no substitute for time in the market, the cumulative returns of an additional 3% reward over 40 years is just more powerful than the 3% reward over 10. Sometimes the extra money is just not worth the extra risk to get it. I am interested in the "several safe options" you mentioned. - So to be honest, I am not the best person to ask about safe options. I can and will find some for you if you would like, but send me a message and I can ask you some particulars about your situation. As a professor the people I usually give financial advice to are 20 years old. And my personal portfolio has so much risk that even my students cringe at my investing. I have a significant amount of money in the ForEx, mostly because I like doing the work that staying on top of the forex requires. I also play around with Profunds - I am specifically in Asian markets right now (not for the faint of heart. Everyday I am surprised when I haven't lost it all.) But, in general I am a huge fan of the Vanguard funds and have been pushing people to them for as long as I can remember....See MoreUser
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