What's a 'healthy' investment into an old home?

victoriandreamApril 20, 2009

I posted this message on the old houses forum and thought I would run it past some of the financial mindsets. Thanks!

The journey continues. Our family (myself, husband, 4 year old daughter, 6 month old son, Jazzy our dog) has lived in our 1892 victorian home for 6 years. A long enough time for us to know the facts and figures for what restoring history entails and to also have become intimitately involved in the details and learning that it's provided along the way.

We're at another crossroads and I'm looking for guidance from this wonderful resource. I guess I have two questions to toss into this conversation.

1. How much of an investment is "healthy" to put into an old home?

2. What determines when it's time to turn the care and restoring of an old home onto the next steward?

It seems like the universe keeps realigning so that we can embark on preserving our home. We purchased it in 2003 when interest rates where at a an all time low. We since have done many projects to bring new life to our home and invested a great deal into a complete kitchen, bathroom, back pantry and butler pantry restoration. We had hail damage to our exterior (it is currently aluminum and the siding and details underneath have been removed) almost 2 years ago and have received replacement costs for new roofs, siding and window trim. With all that being said, it is requiring a tremendous amount of time, energy, and financial resources. One contractor told us that $200-300K would be realistic for the exterior. My husband and I have ongoing conversations about making the right choice for our family and our home. We live less than 2 miles from my husband's business on an acre lot in the city that over looks a river. The neighborhood is nice but has some disadvantages for younger children - busier street. We have one of the largest and oldest homes and it's considered a "mansion" on the taxrole. A realtor did a market analysis and told us that no matter what we do to the home...we won't ever get out of it what we put in because of square footage (over 6,000) and location.

A few disadvantages of our home:

No master bathroom (have 2 full baths - one on each floor)

Unattached 3 stall garage

Not the most efficient heating and cooling systems

We love our home and have our heart in all the right places to do what's right for this historic property. We would love to see it be state and nationally registered and to allow this home to be continue to be an icon for our comunity. However, it would be reassuring to hear what other's have invested into their homes, how long they've lived there, what happens financially when it gets sold, and how they make the unknowns of restoration feel "comfortable" in their heart and in their pocket book.

Contractors who come from neighboring towns to look at our project think that we're sitting on a pretty sweet home and have told us that in time we will certainly recoup what we've invested. Most of our extended family with the exception of my mom are not involved in the process and probably tend to think that we're a bit crazy for pursuing this.

We also wonder about the impact all our planning meetings and projects will have on our kids. So far they seem to be holding up and we frame them in a way that hopefully they are learning a lot of real life, practical things. Any feedback for the aspect of keeping a peaceful family experience would be helpful, too.

We have looked at other homes in the past 6 years - new and old - and always come to the same conclusion...let's stay here and keep going forward. We talk about building but feel that it would be very difficult to sacrifice the quality, character and craftmanship that our old home has. As part of our steps in this process, we plan to meet with our bank, lay the original, linen paper blueprints on the table and see what their response is when we tell them that this is what we'd like to do.

To allow for free discussion here are some numbers:

Purchased for $230,000

Investments so far $150,000 or so

Future investments $200-300,000 or so

Possible total investment $680,000

Replacement cost from insurance $100,000 or so

We also have historic tax credits available but really doesn't amount to much in our situation.

I'll post some photos shortly.

So, anyone out there been standing in a similar place that can guide us? Gratitude to all of you in advance. Let the conversation begin :-)

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We've done the historic home thing twice.

First was an 1848 colonial with 7 fireplaces. When we moved in you couldn't heat the kitchen over 48 degrees..Brrrrr. The house was in New Hampshire! It's a wonderful house (with its very own ghost...yep, I kid you not!).

The second was an 1887 New Englander/Victorian also in NH. Quirky house. I loved it. DH & DS - not so much. lol

The house will tell you when your conservatorship has ended. Remember, you NEVER own an historic home. They OWN you. It's an emotional relationship. It's not logical or even rational.

We are boaters. On our porch hangs a sign that says, "Enjoy Boating. Stand in a cold shower & rip up $100 bills!" It's the same concept with an historic home except the pile of $100 bills is larger. :)

I would say that if you are questioning whether it's "worth it" to continue renovations...it's time to sell. Renovating these period homes is an act of love. Same as any romantic relationship...once you start questioning it's viability...it's already over.

We owned our historic New England homes between 1987 & 2003 when period homes were hot. Now, since Pottery Barn has become a leading source of interior design inspirations these homes have slipped out of favor. That's only temporary though. Over the decades & even centuries these houses remain reminders of our past & cycle through periods of great admiration & other times of disdain with people lamenting the high utility costs & upkeep. (Whatever is it about OLD wood that the paint just won't stay put??!!)

I'd love to see pictures of your home. We are also antique lovers. Our furniture reflects our fascination of a romantized 18th & early 19th century mostly being circa 1750-1835. We once had an entire house full of Victorian furnishings. Being overcome with insanity, we auctioned the entire household (literally) & began collecting what we now own. It's a disease, I tell you...a disease! :) We pitifully say they are "investments". Hogwash. To be an investment you must purchase with the intent of someday selling. Well, that eliminates our collections as "investments" with that one sentence. lol Like I said, it's a disease.

We can't help ourselves. We have a wonderful home. Yet, we continue to wax poetic over a period home we spotted 2-1/2 years ago now of which we can't locate the owner. It's an 1825 colonial that is an unfortunate victim of the current foreclosure debacle. It's mortgage ended up in one of those now infamous "pools", was foreclosed, and nobody seems to want to claim ownership. We have a copy of the foreclosure deed yet the grantee denies ownership. C'est la vie!


    Bookmark   April 20, 2009 at 5:32PM
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Oh my goodness! Did I ever appreciate your post and the laughter that it produced. Here is a link to my photobucket,

I wish I could have gone to your auction or be able to find one like it.

I can totally relate to the cold kitchen. We have a radiator in there that's HUGE. We put it on it's own zone and now we can make it as toasty as we want.
I'm going to reflect on your commment about my questioning if it's worth it and see what shows up for me. I know it's worth it and I think we have the "disease" as you call it.

This hopefully will be an interesting post.

Here is a link that might be useful: Victoriandream Photos

    Bookmark   April 20, 2009 at 6:02PM
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How does a home tell you that your conservatorship has ended and/or should continue? What have been your signs?

Also, has the financial investment in your homes been similar to what I stated? What percentage of the work did you do yourself and hire?


    Bookmark   April 20, 2009 at 6:13PM
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Okay, one more question for you:
Did you have children in the mix of these restorations?

It's encouraging to know that you can boat and also own an old house. That's the one thing we'd like to do, too - a simple pontoon will do for us.

    Bookmark   April 20, 2009 at 6:36PM
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I'd say that if you are starting to think of of a historic house as an investment, you are on the wrong path. I've lived in an older house (not as old as yours but 100 yrs old) and it drove me crazy. Every little job turned into a much larger job because of the age of the house (plaster and lathe boards, knob and tube wring, "octopus" configured heater, dimensional lumber and on and on and on ...)

I think of it as a lifestyle. If you enjoy that lifestyle, then it could work for you. But if you start looking at in terms of an investment, it will never work out.

Also you mentioned hiring contractors to do major portions of work. I would think that if you were going to make something like this work you would either need to be a contractor or be very close to a contractor (i.e. parent or sibling). If you have to pay retail for a contractor to make all repairs and upgrades, it probably isn't going to work out for you.

    Bookmark   April 21, 2009 at 8:31AM
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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! :)


    Bookmark   April 21, 2009 at 11:36AM
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Thanks for all the follow-up!

Yes, the word "investment" isn't really accurate in terms of old houses. I do understand that and we do see the value of preserving history for future generations.

My husband is a chiropractor and owns his own business. So, we've determined that his time is better spent doing that (and it keeps his hands and body safe, too). Although we have mastered many projects so far.

We didn't have to strip any of the wooodwork. Nuns once occupied our home while their church was being built and supposedly they painted the woodwork which another owner restored. Our upstairs bedrooms have painted woodwork that appears to always have been painted (old photos). One of the only quirky things in the house when we bought it was an old kneeler. Both my husband and I are recovering catholics. I suppose we could give it a try and see if any of our wishes would be granted :-)

B&B has been mentioned a few times during our conversations - by me but not my husband. Maybe someday that might be a consideration.

Yes, we are continuing to work on pulling the details together for the exterior restoration. Thanks for the encouragement!

Any other thoughts from people? Would love to hear.

Our family has already made some very precious, beautiful memories in this home. Josie's tree and both of our children were born at home. It really has potential to be the place for us for a long time.

    Bookmark   April 22, 2009 at 11:04AM
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That house is magnificent! What a beauty and I can only imagine how it pulls at your heart-strings.

Are you, by chance in NY? We have many beautiful victorians in the town I work which are on a busy road. As I wait at the red light, I look in wonder as they are being restored. Wonder how they look inside.

I have no advice for you, being too much of a romantic myself,


    Bookmark   April 22, 2009 at 1:45PM
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You have a beautiful home. Triciae, as always, has great points and presents them so clearly.

How much is healthy to put into a house? It depends. If there was even a small chance of a forced move (ie. job relocation), I wouldn't put much more into it than I could recoup. It sounds as if you won't have that problem. I wouldn't put money into a house at the expense of other important financial considerations (life insurance, college expenses, retirement, and so on). Putting money into a house generally involves contractors. Is this something that you are comfortable with and able to do? I'm going to assume that your husband (like mine) will just focus on work and his free time will be "family time."
Now that those few conditions are out of the way, what is healthy is what you are comfortable with. We all choose to spend our discretionary money differently and no one ever seems to have enough :) so we must prioritize. Only you know your priorities and your financial situation.

When is it time to turn the house onto a new steward? You can only decide when you are going to sell - you will have no control over how the new owners treat the house.

As for my own situation, I've been in the same house for 20 years and it's not my "forever" house. It's okay, but I have four kids, and I am very financially conservative. When my kids complain that they have to share bedrooms, I tell them that their complaints will stop when they leave college and have no debt. (Sometimes I think that I don't want them to be too comfortable because I don't want 40 year old children still living at home :) ) I always feel a twinge of envy when I see such beautiful homes (when I looked at your pictures, they had such a relaxing effect on me), but our finances couldn't simultaneously support such a grand house and four kids.

I wish you many more happy memories in this house or any other that you choose.

    Bookmark   April 22, 2009 at 2:46PM
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So true. So true. Really agree with what you wise souls are speaking.

We live in central wisconsin. Jane, you're welcome to come visit anytime :-).

Ruffian1, you're pretty right on with your thoughts in paragraph 2.

Also, our kids will be sharing rooms, too. My daughter tells me she's lonely at naptime. At nighttime we're all snuggled up in one bedroom. So even though we live in this big old house that everyone thinks we should fill up with 10 kiddos, we attempt to stay grounded and enjoy the truly simple things in life. Last fall when I was 8 months pregnant, we had a staycation in our yard. We slept in the tent, played in our grass, kayaked past our house, made food in our kitchen and showered in our bathroom. It was one of the best weekends ever!

    Bookmark   April 22, 2009 at 6:02PM
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Victoriandream, What can you afford to cover if God Forbid a fire happens or a tornado?

You said "Replacement cost from insurance $100,000 or so"

You already have $380 into this house. If you add what you are thinking to "Possible total investment $680,000" What would the insurance replacement be then?

You need to figure out how far you are willing to go before a disaster hits AND before you get Historic status.

I live next to a neighborhood of old gorgeous Victorians in a historic disctrict. A tornado came through and not all of the homes have been repaired because the history people put too many demands on the owners.

    Bookmark   April 22, 2009 at 6:03PM
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Thank you for shedding light on this. I had that same thought this morning in my closet. Seriously.

We have had a horrible time dealing with our insurance company for our hail damage claims - we're on our 4th revision. It's been a major about of time and energy on our part because "it's not your average ranch home."

I would be sick if something were to happen to this property and then to have the insurance to deal with on top of it.

I have heard of a company who has a niche insuring older, historic homes. Anyone have resources? I wonder what the premiums would be and how this works.

    Bookmark   April 22, 2009 at 6:21PM
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We bought a 9 room Dutch colonial that was built in 1930. It was our first home after living in NYC. We didn't want a typical suburban house; we wanted something distinctive. It had a lot of charm, 2 fireplaces, an old fashoned root cellar where we stored wine, etc. etc. But the oldness and the impossibility of centrally air conditioning it at a reasonable cost, caught up with me after a while.

Years later, when we had already moved for job reasons and were relocating again for job reasons, we looked at an old house that reminded me of that first one, and I rejected it out of hand. My attitude was, "Been there; done that."

I think the emotional attachment to an old house can be both enriching and draining. Aside from the expense,which is a very real consideration, you need to consider the total amount of time and energy you devote to the place, and what other things you would do with your life if you weren't tied down by the house.

What you decide in the end with never be straightforward, and you will miss the place if/when you leave it behind. But you might find your way forward if you take a look at alternatives. It's a buyer's market right now, so this might be a good time to explore alternatives. If you can bring yourself to relinguish that cozy alcove that you lavished so much loving attention on, or whatever, and look forward to something of a different style in a different setting, you might surprise yourself by how easily you can make the transition.

    Bookmark   April 22, 2009 at 10:13PM
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The fact that it is on a busy street alone would really turn me off. I have friends that have an older home (and not nearly as nice as your house that you've described) and they live on a busy street in a not-good neighborhood. But they sure let that woodwork and craftsmanship seduce them! They keep talking about the neighborhood "turning around" but I doubt seriously that it ever will in their lifetime. I realize you didn't say you live in a bad neighborhood and I'm not trying to put words into your mouth.

There are other alternatives to victorian homes that are not strictly suburban tract style homes.

I fell in love with my current home (custom ranch on 5 rolling acres) while looking for an older home. My husband convinced me to look at it and darned if I didn't see a great opportunity! So while our friends talk about old world craftsmanship and shiver in their big old house, I have some pretty nice craftsmanship and lots of other bonuses like a kitchen to die for and luxury baths in my newer home.

If you're happy, stay! Different strokes for different folks after all.

    Bookmark   May 14, 2009 at 3:42PM
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