Re: REPLIES 100K: mISSiON iMPoSSiBLE tHREAd
I can see the logic in that with everything being new so no depreciation. Sellers want to get their money back out of it.
It's a bit more than that.
First off, a house where everything is newly done is just more aesthetically pleasing to potential buyers. They look at it and think "wow, I can see my sofa there, I can picture myself getting read in that bathroom, etc, etc" That alone makes it much easier to sell and therefore people can justify in their minds paying a higher price for it. There is a whole 'staging' industry that makes houses appear livable when they are put on the market.
The thing is, if you can be patient and buy a busted down house and hire someone to fix it to your 'standards' its cheaper. If you are handy and can do it yourself, MUCH cheaper. Even in the horrible economy right now for houses in my area (down probably 30% from peak) my dad's construction biz has work for the next 2 years booked just from 2 guys who buy beat down houses, do a cheap remodel to get them to look up to standards based on the city/area/price range and make a KILLING. 10s of millions a year.
The other part is, there is a measurable way to tell you ~ how much value certain things will add to the value of the home. For example adding a bathroom or updating a kitchen will almost always add a higher % increase in value to an existing home vs adding a new living room or bedroom.
On the other hand, if you don't know a contractor you can trust, and you can't do some or all the work you want to do yourself, thread carefully as most of your saving can be sucked out from under you if you make a few mistakes.
I would also take the time to build an amortization chart based on the loan you'll need to buy your house (if you're taking one). It can tell you the amount of interest you'll be paying on your loan each month/year/life of the loan. Take that, then figure out the amount you'll save on taxes. After you do that, figure out how much the house will have to increase in value over time to make it 'worth it' to you to actually own said house. (I can help you with this if you need)
Either way, GL, young Bronie.
:cheers
