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Why Buying An Old Home Is A Bad Investment

By noshow follow noshow   2013 Feb 13, 1:37am 12,974 views   49 comments   watch   nsfw   quote   share    


http://www.businessinsider.com/homes-30-bigger-consume-2-more-energy-2013-2

Typically, homes undergo costly renovations to keep them up-to-par with newer homes, which employ the latest technologies to make them, among other things, more energy efficient.

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10   FortWayne   ignore (4)   2013 Feb 14, 2:51am     ↓ dislike (0)   quote   flag      

CaptainShuddup says

It's a shame that things had to be moved around, because you can't buy cabinets today, built as well as those that I threw out.

Prettier and newer perhaps, but I doubt any cabinets that you buy today, would still look brand new in 60 years.

Have you tried making them yourself? It's a fun DIY project and wifey appreciates.

We looked around for new cabinets when we got our place, everything they were selling these days has real flimsy material that is prone to deterioration.

11   Tenpoundbass   ignore (14)   2013 Feb 14, 3:05am     ↓ dislike (0)   quote   flag      

NO but I suspect I will be replacing them in the near future anyway.

Actually we have a 800sqft patio just out of the kitchen door.
The Kitchen is nice but not as large as we would like. The LR is not a big as we would like either. Of this due to the fact the current 2000sqft house, used to be a 900-1200sqft house. I would like to rip out the kitchen, and incorporate that floor space into the living room. Then move the kitchen out to the patio area someday.

The biggest challenges are, the septic tank(we're not on Sewer here) is under part of the patio space, and the other problem would be. Tying the existing main Barrel tile roof and the two addition wings on each side of the patio, that are now flat roofs, into the new kitchen space, if we made that improvement. It would probably require redesigning and building a complete new roof, over the entire house.

We're waiting to see what happens. When the real recovery happens, if it would be cheaper to just buy a new bigger house somewhere, and convert this house back to a, 1-1 and 31 and rent it out. Or we get sewer to come through, which doesn't seem to be planed by the city yet.
Here in Hollywood only houses with Alley access got sewer systems put in. I know I wouldn't want to decommission the existing septic tank and build a another one out further out in the yard.

12   curious2   ignore (0)   2013 Feb 14, 3:11am     ↓ dislike (0)   quote   flag      

If the house isn't on a concrete pad, the cost of installing a full basement can be surprisingly reasonable. Basements are naturally cooler so they don't need a/c, and food lasts much longer, some items can last years past the expiration date. Beware of flooding during hurricanes though - use materials that can be replaced easily.

13   Tenpoundbass   ignore (14)   2013 Feb 14, 3:13am     ↓ dislike (0)   quote   flag      

Dig two feet in South Florida and you've got your self the beginnings of a good Bass fishing pond.

14   thomaswong.1986   ignore (5)   2013 Feb 14, 5:15am     ↓ dislike (1)   quote   flag      

noshow says

which employ the latest technologies to make them,

bullshit ! its no different regarding raw materials, labor and equipment than decades ago.

you need to pull that Ipod/iphone/ipad out of your ass...

15   Tenpoundbass   ignore (14)   2013 Feb 14, 5:29am     ↓ dislike (0)   quote   flag      

thomaswong.1986 says

bullshit ! its no different regarding raw materials, labor and equipment than decades ago.

I don't know about that...

walls
Decades ago lathe plaster
Decade ago wood 2x4's and dry wall and joint compound
now Sheet metal studs toxic Chinese drywall.

tile floors
Decades ago Portland Cement Tile grout
Decade ago latex additive thin set, latex additive grout
now tile mastic three part grouts

16   anonymous   ignore (null)   2013 Feb 14, 6:22am     ↓ dislike (1)   quote   flag      

The bad thing about buying an old house is you have to pay for all the appreciation the structure has borne over time, where as when you buy a new house, it hasn't had a chance to appreciate yet. So say you spend 250k on newly constructed house today, figure in 20 years it will be worth 500k, 40 years it will be worth 1M, than 60 years from now, its worth 2 million dollars, 80 years from now its worth 4 million dollars, and in 2113 your barely ripened house will be worth 8,000,000$ !! You can beat a return like that, 250k into 8 mill in a century, just by letting your house weather away in the elements,,,,,

17   dublin hillz   ignore (0)   2013 Feb 14, 6:33am     ↓ dislike (0)   quote   flag      

SFace says

Old home is bad, then explain this for $1,350,000. So old homes are indeed the best investment. There is no technology here, just rats. It's not the acres, it's just 2495 square feet.



And if you think this is a bad investment for the 1.35M buyer, wait to you see the price in two years.

I wouldn't make this dump my primary residence for even $150,000!!!

18   REpro   ignore (0)   2013 Feb 14, 7:15am     ↓ dislike (0)   quote   flag      

I bought several SFH for rental. None of them was older than 10 years. Actually, some as a brand new. This is just my way of investing. Trouble free.

19   Mobi   ignore (0)   2013 Feb 14, 11:25am     ↓ dislike (0)   quote   flag      

REpro says

I bought several SFH for rental. None of them was older than 10 years. Actually, some as a brand new. This is just my way of investing. Trouble free.

This is true and I appreciate this fact. But the maintanence fee for an updated old house is probably less than the price difference between newer houses and older houses (esp. for rentals). Newer houses are more appealing to renters though.

20   inflection point   ignore (0)   2013 Feb 14, 12:10pm     ↓ dislike (0)   quote   flag      

the bars on the door tell the whole story.

21   REpro   ignore (0)   2013 Feb 14, 1:14pm     ↓ dislike (0)   quote   flag      

Mobi says

But the maintanence fee for an updated old house is probably less than the price difference between newer houses and older houses (esp. for rentals)

Happens only when you personally managed/done all updates with rental reliability in mind. When is done by flipper, cross your fingers.

22   Buster   ignore (0)   2013 Feb 14, 2:10pm     ↓ dislike (0)   quote   flag      

I have seen old and new houses that are pure crap, and old and new that are both awesome. Simply depends on how they were built to begin with and in the case of old homes if they were maintained properly. I now live in a 90 year old home. It is built out of redwood. All new windows, reclaimed 100 year old douglass fir floors, new kitchen with viking appliances and new wiring/plumbing. Best house I have ever owned......even better than the ultra modern masterpiece I had built 10+ years ago.

23   Waitingtobuy   ignore (0)   2013 Feb 14, 2:52pm     ↓ dislike (0)   quote   flag      

I don't know if I believe this article. We live in So Cal near the beach. 2000 sq foot two-on-a-lot townhouse. Built in 2000. Double pane glass windows and sliding doors, back unit, which means we get little sun.

It's always cold in our place in the winter. Running the heater at 71-75. My daughters' room is always freezing cold, and we run space heaters in the bedrooms. Our heat is natural gas, and we spend $60/month in winter. Electricity is $200/month year round.

I'm from the Midwest and I don't remember being cold in any of our houses. Come out here, lived in three townhouses, all of which are cold. I think the construction quality, especially insulation, sucks here.

On a positive side, no AC. Don't need it 6 blocks from the water. Never gets above 85 in summer, and the place, even on the warmest of days is....cool.

24   seaside   ignore (0)   2013 Feb 14, 2:57pm     ↓ dislike (0)   quote   flag      

Mobi says

If you read the article, space heating is the main difference. I suspect it will help a lot by improving the insulation in the attic (put a 2nd layer, you can DIY.) Several of the old houses I bought had thin, broken insulation layers. As a renter, you may be screwed.

This is my problem. This old pos apartment has nothing in the wall or on the ceiling. Walls are icy cold to touch. I am having my jacket on in my room, and my feet are freezing. If I jack up the dial on the thermostat... :(

25   JodyChunder   ignore (3)   2013 Feb 14, 3:10pm     ↓ dislike (0)   quote   flag      

I predict that in the future, there will be a solution people can take which will allow them to live in any climate almost totally free of discomfort. Discussions about energy efficiency and insulation will be like discussing buggy whips or the most efficient way to crank the tin Lizzy.

26   Mobi   ignore (0)   2013 Feb 15, 12:56am     ↓ dislike (0)   quote   flag      

REpro says

Mobi says



But the maintanence fee for an updated old house is probably less than the price difference between newer houses and older houses (esp. for rentals)


Happens only when you personally managed/done all updates with rental reliability in mind. When is done by flipper, cross your fingers.

Not really. In my area, during the past few years, so many foreclosrues flooded the market and some of them are in prettey good shape (i.e., it does not need a whole lot of rehab for a rental.) I don't buy a fixed-up flipper since I rather do that myself.

27   Mobi   ignore (0)   2013 Feb 15, 1:01am     ↓ dislike (0)   quote   flag      

Waitingtobuy says

I'm from the Midwest and I don't remember being cold in any of our houses.
Come out here, lived in three townhouses, all of which are cold. I think the
construction quality, especially insulation, sucks here.

I suspect the construction quality in your case, too. Gas $60/month in So Cal, is that normal (are your water heater and dryer gas or electrical)? Not to mentaion it is townhouse, not SFH. This is why I avoid cheap, cookie cutter new houses. They were built in a hurry just to profit the constructers.

28   Mobi   ignore (0)   2013 Feb 15, 1:03am     ↓ dislike (0)   quote   flag      

seaside says

Mobi says



If you read the article, space heating is the main difference. I suspect it will help a lot by improving the insulation in the attic (put a 2nd layer, you can DIY.) Several of the old houses I bought had thin, broken insulation layers. As a renter, you may be screwed.


This is my problem. This old pos apartment has nothing in the wall or on the ceiling. Walls are icy cold to touch. I am having my jacket on in my room, and my feet are freezing. If I jack up the dial on the thermostat... :(

You should move away. No insulation in the wall is not acceptable (even in So Cal.)

29   Dan8267   ignore (3)   2013 Feb 15, 2:58am     ↓ dislike (0)   quote   flag      

SFace says

Old home is bad, then explain this for $1,350,000

Another fool buyer who thinks he can flip it for a profit but will end up walking away and taking a credit score hit.

30   Waitingtobuy   ignore (0)   2013 Feb 15, 3:02am     ↓ dislike (0)   quote   flag      

Mobi says

Waitingtobuy says

I'm from the Midwest and I don't remember being cold in any of our houses.

Come out here, lived in three townhouses, all of which are cold. I think the

construction quality, especially insulation, sucks here.

I suspect the construction quality in your case, too. Gas $60/month in So Cal, is that normal (are your water heater and dryer gas or electrical)? Not to mentaion it is townhouse, not SFH. This is why I avoid cheap, cookie cutter new houses. They were built in a hurry just to profit the constructers.

Normally, my gas is $45 or less a month, but winter it jumps a bit. The gas is pretty reasonable. We have a gas stove, water heater, and dryer too.

31   NDrLoR   ignore (1)   2013 Feb 15, 3:32am     ↓ dislike (0)   quote   flag      

everything says

If you buy a house from the mid 70's, keep in mind that was during an oil crisis, it could be built cheaply.

And also used aluminum wiring in many applications since it was cheaper than copper. In January, 1975, I moved into a brand new small one bedroom apartment that wasn't even finished out inside so I got a couple of months "construction rent" discount. One day in the summer of 1977, I turned on the bedroom light switch and a plume of smoke issued from it! Scared the hell out of me and I called maintenance immediately. I don't know what they did in that circumstance, but it seemed to work until I moved to my condo in '81. I think it was at the switch boxes where the problems occurred and they may have been all changed out.

32   NDrLoR   ignore (1)   2013 Feb 15, 3:45am     ↓ dislike (0)   quote   flag      

The house I live in now is frame and was built in 1949. It had one bathroom and two bedrooms, used space heaters connected to city gas line. It had a den and another full bath added in 1962, as well as central heating, and my mother bought it from the original owner in May, '63--I think it's about 1,700 sq. ft. now. She added AC to the central unit which was completely replaced in 1996 while still working perfectly, but was leaking freon. She installed storm windows and doors in the early 70's. I don't run either the AC or heat at night, but it warms up quickly in even the coldest weather--I keep the vents in the living room and dining room closed off. I keep the thermostat on 80 in the summer and the unit will probably run in cycles of 15 minutes on, 20-25 minutes off on a 100 deg. day.

I saw in an obit a couple of weeks ago where the wife of the couple my mother bought it from passed away in her early 90's--they had moved away, but come back about a year and a half ago. After about a week, I called the man, now in his mid-90's and told him who I was and was living in the house he sold 50 years ago. He told me how he lined up a builder, then went to get a mortgage. He went to Pioneer S&L first and the loan officer told him "young man, you can't even afford rent on that house". He told the builder to go ahead and start, then went to First Federal S&L where they approved him and he paid it off in less than ten years. He said he and some of his family had driven by during the weekend of the funeral and I told him he and either of his now grown sons were welcome to come by anytime and he said he might just do it.

33   REpro   ignore (0)   2013 Feb 15, 7:07am     ↓ dislike (0)   quote   flag      

Historically houses built during hot real estate market have so called “fast track”. Built fast, inspectors also were very busy, buyers had no time to look into detail, and price only matters. Just drop this granite on the top, add SS appliances and is sold. It’s always the same pattern.
As opposite, houses built during slow years have more attention to details; more features implemented, better materials used, better finish, all pointed by builders to convince buyers.

34   zzyzzx   ignore (2)   2013 Feb 15, 7:18am     ↓ dislike (0)   quote   flag      

FortWayne says

new houses aren't structurally better out here

I'm thinking that generally speaking, newer houses are structurally much worse than old houses.

35   dublin hillz   ignore (0)   2013 Feb 15, 7:53am     ↓ dislike (0)   quote   flag      

The pad that we bought is new construction. The last rental that I lived in was only 3 years old when we moved in. Having this experience, I hope I never have to live in an "old" place again. Sometimes it seems like older dwellings have a certain odor about them, not to mention that they are way less energy efficient and way less comfortable.

36   curious2   ignore (0)   2013 Feb 15, 7:58am     ↓ dislike (0)   quote   flag      

Older houses tend to require more maintenance costs and labor, not only because things wear out but also because they were designed in an era of cheap labor and labor-intensive technology. Newer houses can be better or worse: better if they use new technology for heating and cooling and windows, worse if they use bad materials (e.g. toxic Chinese drywall, radioactive granite) and "Flip This House" fashion styling.

robertoaribas says

withstanding a hurricane....

When new buildings are damaged in hurricanes, it's usually because it became fashionable to build too near the water. Previous generations tended to build farther back, on higher ground.

Much has been learned about how to build for a wide range of environments. For example, using metal soffits instead of wood, and keeping wood fences away from the house, reduces the risk of wildfire damage. Putting the living area above flood level makes a huge difference when flooding occurs. These lessons have been learned from disastrous losses, and yet they are often ignored, so newer can be better but might not be.

37   REpro   ignore (0)   2013 Feb 15, 8:04am     ↓ dislike (0)   quote   flag      

zzyzzx says

FortWayne says

new houses aren't structurally better out here

I'm thinking that generally speaking, newer houses are structurally much worse than old houses.

More No than Yes. Sure, big builders tend to explore every possible loophole what is not prohibited by constantly increased in local building codes, to maximize profit. Yesterdays “proud from his work” small builders are almost vanished by national developers.

38   REpro   ignore (0)   2013 Feb 15, 8:08am     ↓ dislike (0)   quote   flag      

curious2 says

Previous generations tended to build farther back, on higher ground.

Really…, ask “Sandy” victims.

39   curious2   ignore (0)   2013 Feb 15, 8:25am     ↓ dislike (0)   quote   flag      

REpro says

ask “Sandy” victims.

Yes, and ask survivors too. Low lying areas flooded, while higher elevations didn't. In the flood zones, taller buildings fared better because the living area is above flood level. The bathtub shape of the NJ-NY-CT coastline creates an inherent risk of flooding during large storms; it has happened before and will again.

40   zzyzzx   ignore (2)   2013 Feb 15, 10:05am     ↓ dislike (0)   quote   flag      

curious2 says

If the house isn't on a concrete pad, the cost of installing a full basement can be surprisingly reasonable. Basements are naturally cooler so they don't need a/c,

Exactly how does one do this?

41   Philistine   ignore (0)   2013 Feb 15, 3:59pm     ↓ dislike (0)   quote   flag      

dublin hillz says

I hope I never have to live in an "old" place again. Sometimes it seems like older dwellings have a certain odor about them

Depends. Our place was built in 1928, but the LL refinished the floors, replastered the walls, redid the baseboards (period appropriate moldings), and painted the entire joint top to bottom. It has no musty smell as a result, and it has all the polish of a new house but with the sincerity and charm of real architecture from 85 years ago.

42   curious2   ignore (0)   2013 Feb 15, 4:34pm     ↓ dislike (0)   quote   flag      

zzyzzx says

Exactly how does one do this?

One calls a company that specializes in it. They jack up the house, slide it to one side, dig the hole, pour concrete basement walls and foundation, then slide the house back into position on top of the basement. Surprisingly, it can cheaper to add a concrete basement than to raise the height of an attic in a wood frame house. Jacking up a house and moving it requires specialized expertise though; I would never recommend it as a DIY project.

43   Kevin   ignore (2)   2013 Feb 16, 2:06am     ↓ dislike (0)   quote   flag      

zzyzzx says

FortWayne says

new houses aren't structurally better out here

I'm thinking that generally speaking, newer houses are structurally much worse than old houses.

Not even remotely true.

New houses are plywood sheathed to provide better shear strength, making them stand up to earthquakes and wind damage much better.

New houses use thicker Sheetrock, providing better fire protection, noise insulation, and protection against dings.

New houses usually use 2x6 studs while older houses used 2x4. 2x6 means more room for insulation and more structural support.

New houses use engineered I beams, OSB subfloors, etc.

A properly built new home will have much better structure than any old home.

44   bob2356   ignore (4)   2013 Feb 16, 2:25am     ↓ dislike (0)   quote   flag      

REpro says

curious2 says

Previous generations tended to build farther back, on higher ground.

Really…, ask “Sandy” victims.

Many "Sandy" victims houses wouldn't have been there without federal flood insurance. Most of the buildings in the old days on those barrier islands were summer shacks, not nice houses. No way in the days before federal flood insurance average people could have afforded private flood insurance (if it could be bought at all) in those area's.

45   NDrLoR   ignore (1)   2013 Feb 16, 3:30am     ↓ dislike (0)   quote   flag      

curious2 says

Older houses tend to require more maintenance costs and labor

Boy I found that out! Last year I had to replace my sewer line from the back of the house out to the city line. I noticed the same kind of work going on last week at a house about the same age as mine on the corner down the block from me--at least they lasted 63 years!

46   REpro   ignore (0)   2013 Feb 16, 6:19am     ↓ dislike (0)   quote   flag      

P N Dr Lo R says

curious2 says

Older houses tend to require more maintenance costs and labor

Boy I found that out! Last year I had to replace my sewer line from the back of the house out to the city line. I noticed the same kind of work going on last week at a house about the same age as mine on the corner down the block from me--at least they lasted 63 years!

Not only had your part connection to city sewer got old. The city sewer and water line on your street is getting old as well. Have you seen street sewer back-up?
From another perspective: when rent go south, tenant are living old properties for favor of newer once, because they simply can afford it now (only superb location can retain tenants).

47   zzyzzx   ignore (2)   2013 Mar 21, 2:12am     ↓ dislike (0)   quote   flag      

curious2 says

zzyzzx says

Exactly how does one do this?

One calls a company that specializes in it. They jack up the house, slide it to one side, dig the hole, pour concrete basement walls and foundation, then slide the house back into position on top of the basement. Surprisingly, it can cheaper to add a concrete basement than to raise the height of an attic in a wood frame house. Jacking up a house and moving it requires specialized expertise though; I would never recommend it as a DIY project.

I was thinking more along the lines of this:
https://www.youtube.com/watch?v=blDyrmNtxwA

48   Y   ignore (3)   2013 Mar 21, 2:34am     ↓ dislike (0)   quote   flag      

cheap efficient solar panels with high efficiency battery technology.
maybe 20+ years out to reach the 'cheap' stage...?

JodyChunder says

I predict that in the future, there will be a solution people can take which will allow them to live in any climate almost totally free of discomfort. Discussions about energy efficiency and insulation will be like discussing buggy whips or the most efficient way to crank the tin Lizzy.

49   BoomAndBustCycle   ignore (0)   2013 Mar 21, 2:46am     ↓ dislike (0)   quote   flag      

robertoaribas says

I end up living in older homes, because they are in the convenient neighborhoods I like, but there are tradeoffs.

In big cities... you simply don't have the option to buy a newer home.. Unless you want to tear down the existing home and build a new one from scratch... That stands out like a sore thumb in the neighborhood of 1950s tract housing. I see this in my neighborhood of 50s tract homes... There's a couple extravagant early 2000s Spanish style homes sandwiched between 1950s cape cods and Eichler's. Looks odd.

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