3 questions: Buying a house, adding onto a house, and building a garage (and costs)

First question: What do I need to know about buying a house? I'm looking for more info on the actual house stuff than the financial bit of it, but feel free to share that as well. What do I need to be looking for going through it? I want to do more than kick the proverbial tires--so what should I be looking for as big problem areas?

Second part, how much would it cost to add on a bedroom/office to a house? There is one for sale that is in a great neighborhood, with a 2 car garage, but it looks like the living space is only about 700 sq. feet or so (listing says 1500 sq. feet, but that cannot be right--looking at it on Thursday to confirm). If an addition could be done for $15,000, it would still be a viable option depending on the condition of the rest of the house. Figure the addition to be anywhere from 10x10 to 20x20. Also, how much for another bathroom with that?

Last question, it seems that the garage adds about 40k to the price--this is just my observations, no actual facts there. How much does it cost to add a build a 2 car garage? Assume nothing fancy in it, even insulation is not necessary.

Going through the process of selling my house at the moment and will be looking at getting another one (with a much larger garage...) shortly. To get into many of the real kickers, you'll probably have a home inspector crawling around in the crawlspace, attic, and everywhere else and noting everthing they see. They know what the codes are for electrical, plumbing, etc. and will flag things that are potential problems that you should either have the seller fix or can use to try and get the price down further. Obvious things though would be looking for signs of water damage since anything obvious may well be hiding much worse damage out of sight.

Don't know for certain how much either the addition or garage would cost/add- it really is a crap shoot here in central KY where I am. One important thing to consider though in looking at building an addition or a garage is what the prices in the rest of the neighborhood are and where your house sits relative to those. I've always heard that you almost never make your money back on additions or garages, but if your house is already one of the larger/more expensive ones in the area then you're even less likely to see any real benefit from it when you go to sell. If you're planning on being there for a good while and figure you're going to get your money's worth out of it while you're there, it's a bit different.

Ashyukun wrote: Don't know for certain how much either the addition or garage would cost/add- it really is a crap shoot here in central KY where I am. One important thing to consider though in looking at building an addition or a garage is what the prices in the rest of the neighborhood are and where your house sits relative to those. I've always heard that you almost never make your money back on additions or garages, but if your house is already one of the larger/more expensive ones in the area then you're even less likely to see any real benefit from it when you go to sell. If you're planning on being there for a good while and figure you're going to get your money's worth out of it while you're there, it's a bit different.

FYI to everyone--an addition to a house that I'm only looking at with moderate interest was just a brain storming effort sitting on the toilet this morning.

The addition, depending on the cost, might be a good idea financially because of 3 reasons:

1: This is the smallest (or near it) house in the neighborhood. It is in a decent school district and walking distance to both Elementary and Middles schools. An additional bedroom would make it possible for a family to live there. I see cost go up considerably comparing it to houses in the area.

2: This is also in a college town. I would consider renting it out (after I lived there for a few years), and if I had a 2nd bedroom, I could increase the rent by at least $300 a month.

3: Even if the addition costs $25k, the purchase price+addition is still well under other comparable houses in the area (again, the 1 bedroom thing is just killing it)

Good information though, thanks!

And the garage question was for hypothetical houses that I haven't found yet. This one has a 2 car garage already

dont end up with the most expensive house in your hood....sounds like you would be better off moving.

Before purchasing anything, check local zoning laws/building codes. Make sure you can add that garage/ extra room what ever before signing that mortgage! Township, village, city etc 2 miles down the road can be very different. This is useful info when shopping. Some communities are much more "garage friendly" than others.

The wrote: dont end up with the most expensive house in your hood....sounds like you would be better off moving.

I will be moving... The question is, buy or rent, and if it is buy, which house? And no way that the house would ever be the most expensive house in the neighborhood, unless every other house just spontaneously combusted.

Gearheadotaku wrote: Before purchasing anything, check local zoning laws/building codes. Make sure you can add that garage/ extra room what ever before signing that mortgage! Township, village, city etc 2 miles down the road can be very different. This is useful info when shopping. Some communities are much more "garage friendly" than others.

Good point on the zoning. I don't think there are much issues in this area, but I haven't looked into it. There are a lot of old homes in the area, so a lot of additions and garages are added from what I can see.

I would much rather purchase a small house with a large garage than a large house with no garage. Especially in a neighborhood where you might not currently have off street parking or tight lots between houses.

A house with 1 bedroom?

I wouldn't even be interested in renting it. Seriously, just pass.

sorry i did not read it all, but i can say i am 53 years old and in the last 28 years i have bought (to live in) 12 different houses and never had everything i wanted, our current house (which i would move out of today)does not allow car trailers junk cars, we have been in this house 3 years and looked at 104 (no joke) houses before we bought this one, i would not buy another one, i would rent...but i am a old berkeleyer.

Rent. I bought a house almost year ago. Relatively new and problem free.

Home projects and assorted bullE36 M3 is going to consume your life. I have a kickass garage for a starter home. I was excited to get in and start building my exocet and do some other fun projects.

I haven't played with cars more than a couple of oil changes.
My Miata is buried under scrap home improvement crap.
My mountain bikes hang on the wall, collecting dust.
I haven't made it to a crossfit class in over 3 weeks.

The berkeleying projects will. not. end. And not in a good way like the ever-evolving race car.

GPS said in another thread that moving home is "how deams die". Owning a home is how dreams die.

z31maniac wrote: A house with 1 bedroom? I wouldn't even be interested in renting it. Seriously, just pass.

Out of curiosity, what are your reasons for this? I don't disagree, but when I had one I loved having a second bedroom simply for storage. I never used it as a bedroom or an office. So with the house, I'd have a basement and garage to solve that issue.

On the rental front, I agree with you--that is why I'm asking about cost to put on an addition.

In reply to ProDarwin:

I can agree with this to a certain extent. I've lived in my house for almost 22 years. During that time, I've done little to it and now all of that neglect is coming to a head. Pretty much everything needs to be fixed, replaced or remodeled. On the good side, it was paid off a few months ago, so at least money is less of an issue.

As far as your price disparity, it may have to do with land - houses with decent sized garages tend to be on larger lots than those without one. Larger lots are more money.

In a perfect world, I'd have a small house with a huge garage/shop. In the real world, that's rarely the case and especially the closer you are to urban areas. In rural (farming) areas, nobody will bat an eye to an out-building that is considerably larger than the main house. In the suburbs this is generally frowned upon, unless you're lucky enough to find (and afford) the original farm house and outbuilding(s) in the middle of a newer developement (somewhat common here in NJ & eastern PA).

IMHO, your $15K addition estimate is very low by a factor of at least 3. My ex-g/f added a bedroom w/ bath and closet (~400 sqr ft master bedroom suite) above her existing living room/kitchen/dining area. The weather-proof enclosure alone (exterior framing, roof, siding & minimal foundation work) was about $45K. That was with us doing all of the mechanical, electrical and plumbing as well as all interior walls ourselves. She still isn't finished with no idea when she'll be actually moving into the bedroom. She has spent a lot more, but she also remodeled the kitchen and changed the layout to an open plan (required due to the way the lower floor rooms were originally built).

Hopefully, SVrX will chime in with more/better info.

mtn wrote:

z31maniac wrote: A house with 1 bedroom? I wouldn't even be interested in renting it. Seriously, just pass.

Out of curiosity, what are your reasons for this? I don't disagree, but when I had one I loved having a second bedroom simply for storage. I never used it as a bedroom or an office. So with the house, I'd have a basement and garage to solve that issue. On the rental front, I agree with you--that is why I'm asking about cost to put on an addition.

Future value.

If it was cheap enough to warrant the ROI, it would already be done. I'd keep looking.

Also, hasn't there been some musings about possibly moving? If that's a possibility, I'd keep renting.

A little more info:

I was all on board with the "rent for now" folks until I actually really put pencil to paper and factored it out. At this price point, I'd be breaking even in a little under 3 years if I buy vs rent, and the house I'm curious about is priced less than anything else in the area with a garage, because the kitchen and bathroom are out of date and it "needs" new carpet. I've included the cost for that in my analysis.

Hopefully that is all it is. I guess I'm really just looking to start somewhere--don't know what is good and bad until you see a lot of them.

z31maniac wrote:

mtn wrote:

z31maniac wrote: A house with 1 bedroom? I wouldn't even be interested in renting it. Seriously, just pass.

Out of curiosity, what are your reasons for this? I don't disagree, but when I had one I loved having a second bedroom simply for storage. I never used it as a bedroom or an office. So with the house, I'd have a basement and garage to solve that issue. On the rental front, I agree with you--that is why I'm asking about cost to put on an addition.

Future value. If it was cheap enough to warrant the ROI, it would already be done. I'd keep looking. Also, hasn't there been some musings about possibly moving? If that's a possibility, I'd keep renting.

Probably right on the future value, but that is not always the case--my grandparents house, for instance, the value could be increased by about 50k if they put in a new kitchen. But they aren't going to do it, and we aren't either.

Moving has been quashed by the fiance. She decided she wants to be back where I work (35 miles apart) rather than where she works. And since we both have good jobs, we've decided that we're staying in the area for now as I pursue further "schooling". If everything goes to plan, we'll be moving back to Chicagoland in 5-7 years. 5 years is typically the break even point on the house thing.

mtn wrote: A little more info: I was all on board with the "rent for now" folks until I actually really put pencil to paper and factored it out. At this price point, I'd be breaking even in a little under 3 years if I buy vs rent

What kind of returns is the real-estate market there showing? What zip or town?

Its hard to make any calls without knowing that market, but good luck selling that 1 bedroom house down the road. That is exactly the reason I ended up with the house I did vs. building my own garage/dream home. The closer you are to the average 4 bed/3bath/2 car garage generic american home (or whatever the rest of the neighborhood is composed of), the better.

ProDarwin wrote:

mtn wrote: A little more info: I was all on board with the "rent for now" folks until I actually really put pencil to paper and factored it out. At this price point, I'd be breaking even in a little under 3 years if I buy vs rent

What kind of returns is the real-estate market there showing? What zip or town? Its hard to make any calls without knowing that market, but good luck selling that 1 bedroom house down the road. That is exactly the reason I ended up with the house I did vs. building my own garage/dream home. The closer you are to the average 4 bed/3bath/2 car garage generic american home (or whatever the rest of the neighborhood is composed of), the better.

Zip 61761. I did the calculations assuming $60,000 purchase price, $5,000 down, and assuming that it would LOSE value at 1% a year, as compared to $750 a month rent.

To a certain extent, this area is in a little bubble and is relatively immune to the ups and downs of the economy--we're home to State Farm and Illinois State University, so the local economy and housing market typically will stay steady. According to Zillow, the market dropped about 7% from 2010 to 2012, and since then recovered most of that. There was basically no decline in 2008. http://www.zillow.com/towanda-il-61761/home-values/

But I'm taking note of the issues with a 1 bedroom being difficult to sell (or rent) down the road. Really wouldn't have thought of that on my own.

mtn wrote: First question: What do I need to know about buying a house?

That's so broad as to be almost as meaningless as asking "what do I need to know about cars to go buy one"?

So, you need to cogitate and think what your plans are, what your desires are, what your abilities are, and what reality is.

If you'd be happy in a 10' trailer with a 100' garage, go for it. Beware that you will be living alone. No woman will accept that.

Lousy schools might not matter to you, but what if you do decide to have kiddies?

Planning to do all sorts of renovations yourself is great, if you really are good at it and really will do it. Reality can intrude. For example, I found out I'm not nearly as interested in it as I thought I was. What was going to be cute renovated farmhouse is now a rather dilapidated old farmhouse.

Second part, how much would it cost...

Depends depends depends. My father had a 6 car garage built for about $35k. He lives in a poorish area of PA. Less than 100 miles away, in the remarkably expensive area known as Columbia Maryland a friend added on a kitchen and screen porch, cost him around $250k.

Do not discount the cost of permit and inspection fees. The family clan's plans of us building a second house on the family farm are just about dead because of the fees. $80-120k for the development rights. $20k for the building permit. $14-20k for the impact fees. $20-60k for the septic. $10-20k for the well. All before we get to the cost of building the house. I could easily be over $200k before anyone even bothers to dig a foundation.

mtn wrote:

z31maniac wrote:

mtn wrote:

z31maniac wrote: A house with 1 bedroom? I wouldn't even be interested in renting it. Seriously, just pass.

Out of curiosity, what are your reasons for this? I don't disagree, but when I had one I loved having a second bedroom simply for storage. I never used it as a bedroom or an office. So with the house, I'd have a basement and garage to solve that issue. On the rental front, I agree with you--that is why I'm asking about cost to put on an addition.

Future value. If it was cheap enough to warrant the ROI, it would already be done. I'd keep looking. Also, hasn't there been some musings about possibly moving? If that's a possibility, I'd keep renting.

Probably right on the future value, but that is not always the case--my grandparents house, for instance, the value could be increased by about 50k if they put in a new kitchen. But they aren't going to do it, and we aren't either. Moving has been quashed by the fiance. She decided she wants to be back where I work (35 miles apart) rather than where she works. And since we both have good jobs, we've decided that we're staying in the area for now as I pursue further "schooling". If everything goes to plan, we'll be moving back to Chicagoland in 5-7 years. 5 years is typically the break even point on the house thing.

Well, as someone who has owned his home for what will be 5 years in September.....I can tell you it's not so simple that "Adding X to the house will automatically in X number of years pay for itself"

We refinanced last year:

• New tile in kitchen on countertops and backsplash
• Bathroom completely remodeled, down to the studs, all nice appliances and tile
• Pella doors front and rear with a Larson security door up front as well
• Planted approx. 40 large shrubs in the back yard around the perimeter to serve as privacy fence as it grows and cover up the chain link fence

These are just the big things. In 4 years our "above-average" condition house, decreased in value by $5k dollar with all the things added I just mentioned. Tulsa does not have a particularly weak market, it doesn't get the booms/busts that really nail other parts of the country.

I'm not trying to be a downer/hater/etc. Just know many "sure things" rarely are. Unless you put a substantial chunk of money down, it's going to be VERY difficult to break even on a home in 3 years unless there is an explosion in your local market. Closing costs, time, etc.

^that.

Then again, carrying a $55k mortgage with you when you leave isn't the end of the world. If you can rent it and hold on to it for a very long time, it may be a worthwhile invesment. But investments you can manage with a few mouse-clicks every so often are a lot easier to deal with

z31maniac wrote: I'm not trying to be a downer/hater/etc. Just know many "sure things" rarely are. Unless you put a substantial chunk of money down, it's going to be VERY difficult to break even on a home in 3 years unless there is an explosion in your local market. Closing costs, time, etc.

I know you're not, and I appreciate the feedback.

This is the caluclator I'm using, does it look like it is missing anything? The only thing I can see missing is PMI.

The values I used were $60,000, 10% down, 5.5% interest, and 2.5% property taxes. I also put that the home will lose 1% in value annually, and that rent would stay the same, just to play it safe.

http://www.nytimes.com/interactive/business/buy-rent-calculator.html?_r=0

If you know you're going to move in 5 years, why take the risk of buying a house?

My partner and I have agreed that we won't buy a house until we find a place we don't want to leave.

Now, if your interested in renting, buy a property based on that. I've often thought that if I liked a place but wasn't sure how long I'd be there, that I might buy a two unit house and rent one unit for the price of my monthly mortgage.

PHeller wrote: If you know you're going to move in 5 years, why take the risk of buying a house?

1: It is a relatively small risk, as far as a house goes

2: We don't know that we are going to move. We think we are. But we don't know; if our careers are at a point that it would be a poor decision to move, we won't.

3: $450-$650 a month in mortgage, insurance, and taxes is a whole lot more appealing than $750-$1200 a month for rent.

I had some friends who bought a place for 101k in Erie, PA, had it for 3 years and sold it for 110k. The house wasn't great, but it was the cheapest place in the area and they did some cheap improvements like appliances and paint.