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

victoriandreamApril 20, 2009

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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Here are some photos of our home, http://s646.photobucket.com/albums/uu185/victoriandream/

Here is a link that might be useful: Victoriandream Photos

    Bookmark   April 20, 2009 at 6:04PM
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To me with a house of that size that is quite a bargin. And what you have done so far is just wonderful! I don't necessarily look at my house with what I can recoop on my invested money, more I look at as what it would cost to build what I have (and still want to do). I'm sure it would be close to double. We are in our forever home. We are close to both parents, the school district is good and we like the view of the apple orchard across the road. It is along a somewhat busy road, but we have a big back yard and lots of woods and a pond. The kids don't venture into the front yard. We do have to go through training any kittens or puppies that come into our home, but so far so good. We have 5 great big maple trees that shade our yard and house, (can't get that with a new build). We don't have an attached garage, but we do have a very large garage where DH has room for three cars, workshop, his music studio, and a few of his "toys". It's also safer to have the garage separate. We also don't have a master bath. We have two full baths one upstairs with the bedrooms and one on the main floor. Not a big deal to me because, I've never had a master bath and I don't spend much time in it anyway. Actually to me it's one less bathroom I have to clean since I really don't like cleaning bathrooms, ick! Our renovations have taken a long time (14 years and still going) for a few reasons. 1) We want to pay as we go so we don't go into debt. 2) We want to have some fun with the kids and allow for plenty of activities like soccer, dancing, swimming, fishing, skiing. 3) In an attempt to keep costs under control we've tried to take on what we can which takes A LOT longer than if we hire out. 4) I like to look for salvage items to use which takes time to search for just the right item. AC would be nice, but just not financially feesible at this time because we are doing the kitchen, dining room and enclosed back porch area. I don't know if we will ever be "done", but I'm not getting too worked up about it.

I'm not sure what you plan on having done to the exterior, but 200-300k seems like a lot of money to go into siding and window trim. I would have expected about half of that (about 100k - 150k), but again I don't know the scope of the work nor what labor prices are in your area.

    Bookmark   April 21, 2009 at 11:26AM
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You are the only one who can answer that question, I think. It's going to depend on so many very subjective factors, like your income, your idea of the ideal place to live, how much of your budget you want to dedicate to your home, and whether you can hang a price tag on the happiness your present house can give you.

To some people a 680K house is not out of reason. To others, it's a pipe dream. That also means it depends on what realty is going for in YOUR market, whether you intend to stay in this house for the long term, or are using it as a stepping stone to house you feel better suits your needs.

I don't think there is a magic or generic formula for when to step out of a renovation unless you have a crystal ball to determine what your home will be worth in the long term.

First off, I don't think kids are harmed by being brought up in a 'renovation' atmosphere if it isn't all consuming. My children have lived in numerous houses being renovated a good part of their childhood. They look back on it now as 'fun' and it was a wonderful learning experience and taught them things they are using as adults now. It's all in how you handle it.

Secondly, yes.......regardless of how much or little you put into your house, you will have to find the right buyer for it because it is a very special house. I have looked at one or two over the years I would have loved to have bitten on but for the immense size. The one we have now is very large compared to new builds of when we bought it. However, even though 6K sq feet is immense, it's not any larger than many of the new builds these days.

No matter what you do in a house that size will be expensive like heating systems or a roof or exterior paint or siding. That has stopped me from buying a couple over the years I'd have loved to have owned. I don't know your locality, but heating costs alone would have probably stopped it.

But, that being said, you have one of the most beautiful old Victorians I have ever seen. It is literally a mansion and sitting on an urban acre would make it even more desirable for a person who wants land but also wants to be in or near a city.

I am sure, certain, that a lot of people laughed at us in the early days of fixing up this house. They aren't laughing now. It's paid off, and although it isn't 'finished' it's comfortable. You never really get finished renovating historical age houses. When you almost get there, it's time to go back and start again. LOL.

Yes, we've sunk a lot of money on our house, but it didn't go high in the condition it was in. We could have bought a new one, and a nice one for what we've put in this one. But, this one will be here for another hundred or two years, if taken care of and new ones aren't built to last a century or two. They just aren't. We had to ask ourselves the same question you are asking yourself now..........Do we want to commit to this????? before the more expensive fixes came up. We made the decision yes........we do......and then we did. I don't know if we'll ever get back our investment and frankly they'll carry me out of this house feet first, so I don't care if we do or not. LOL again.

Good luck on whatever you decide to do.

    Bookmark   April 21, 2009 at 9:30PM
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I have to agree with C up there above my post :) the question is so particular to YOU that it can't be answered by anyone else.

What can you afford? Obviously you love the place (who wouldn't) so what do you want to put into it? Is this the home you plan to continue to live in for many years? Or just a stop along the way?

The busy street wouldn't be a concern to me, and I'm a family looking for a 6000 sq ft plus victorian with a three year old and a dog. You're so far off the street it's easy to add a nice fence and give the family plenty of safe room to play. And not being the the register yet, you can do so without restrictions most likely (the place we want we have to have it approved). I can just see a fabulous iron fence surrounding the property :) So fitting for your house!

What is the TAV and the appraised value? Your tax assessor was somewhat right...sometimes sq ft is a down grade in value. In the town we're looking at buying in none of the big homes has sold for a couple of years. There are absolutely no comps to get a value from because it's basically a retirement community, with those with cash being retired (and not wanting the huge house) and those with kids not being able to afford the big houses typcially. So we know if we do buy the place we want that we'll probably pump half a mill into it that we won't recoup any time soon...but to us it's worth it because we want to raise our child there.

From the pics I'd say I'd give you 800 now! heh heh so umm where are you? LOL

    Bookmark   April 21, 2009 at 10:15PM
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Wow...I love garden web and all of the great people who respond to my quandries. It's really been encouraging so far. Thank you!

A few follow-ups from above.

We live in the the Central Wisconsin area along the Wisconsin River. So, igloochic you could either make us an offer or come live with us. We have an entire attic you could finish :-). We've offered this to a few people and no takers, yet. If we're in your demographic area - let's talk...hehe.

Our home is definitely one of those that has a difficulty being appraised because of the lack of comparisons. I believe for purposes of our bank - it's at $390,000. The tax roll has us at much, much less - more in line with what we purchased it for. They haven't been back to check on our kitchen/bath upgrades, yet. Which raises a question...how do restorations impact property taxes? Any first hand experiences?

We do love our yard and there is a 10 mile bike/walking path right across the street that is a definite bonus for us. There once was an iron fence but it was donated for war efforts. We would love to put one up again.

Glad to hear that kids can actually benefit from growing up learning about restoring an historic home. I also appreciate the comments about not having a master bath. We have realized that lots of quality, family time happens in our upstairs bathroom. For this I am grateful. I also love that our kitchen is its own separate area - the place where we cook - and there is no TV in sight. I think that the way the old homes were designed lends themself to great way of raising a family.

I'm curious if there is anyone lurking that was in a similar situation and decided to go another path and not continue with the old home. What are your thoughts?

And I would love to hear from anyone else who wants to send more encouragement our way. Thanks!

    Bookmark   April 22, 2009 at 11:46AM
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We did lots of work on a tiny cute 1949 cape cod house - just over 1000 square feet. Our upgrades were a bathroom addition, carpet removal and oak floor refinish, and energy upgrades (attic insulation which cut the heating and AC costs in half.) I loved that house, but a job change meant we had to move and we did. The pain of loosing the tiny very cute home was greatly offset by making lots of money on the sale. (We sold in 2004, a good year to sell.) Our house is much larger now but the 1974 layout is not something I appreciate. And the size is "too big." We also have aluminum siding - guess I should pray for hail. We won't be replacing it anytime soon as the "payback" is not there.

Your house is a stunning and irreplaceable jewel. The yard and bike path are great. I think you will risk substantial regret if you sell and build a "new home" in the suburbs. (or move to almost any existing home) The thing to put money into (IMHO) is energy efficiency improvements to lower future cost of living. (Though a sound roof is important too! If you put enough insulation on when you replace the roof, you may be able to avoid most of the summer AC use.) Kitchens can go out of style, wallpaper becomes tacky, attic bedroom additions can be muddled up, but energy efficiency will always be "in".

If the busy street is a problem right now, install the fence and enjoy your yard. Overall I think you should do the upgrades which will help you *enjoy* the house. Living in a large Victorian is a lifestyle choice not an investment.

    Bookmark   April 22, 2009 at 12:14PM
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Victorian Dream, the fact that you're asking the questions reveals more about your present situation than all the objective information you provide. You must be having doubts about your home and your commitment to it to be asking others about "healthy" investments and the "next steward". If you want out, just come out a say it, and take your lumps.

I know there are plenty of people who develop sentimental attachments to homes of yesteryear, especially ones as beautiful as yours. But the reality of living in such homes in modern times (when energy is expensive, prime materials are either unavailable or very expensive, and the plentiful cheap labor of yesterday is long gone) can erode those sentimental feelings. In fact, one look at the exterior pictures makes me cringe at the amount of labor involved in your exterior refurbishing plans.

I guess in the end it comes down to your economic situation. A super wealthy person wouldn't mind the cost because of the unique nature of the experience of living there would be worth the fraction of his income required to maintain it. A less wealthy person who have to make trade-offs of other desired uses for his money, might be less willing to pay for the thrill of living there.

I guess what I'm saying is you need some prayer, or soul searching, or (inter-family) meditation to figure out how you REALLY feel about this place, and where you want to go... It's not just about the money.

    Bookmark   April 22, 2009 at 1:37PM
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Well said, tryinbrian.

    Bookmark   April 22, 2009 at 4:44PM
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Everyone has shared beautiful insights and challenging questions so far. I'm a life and business coach which means I'm usually on the other end of the conversation (P.S this home lends itself so nicely to my home business - office upstairs and coaching parlor for those that meet in person).

One of my intentions for posting this to garden web was to explore it and gain some clarity. I've had my vision so focussed on the details of various upcoming projects for some time and I didn't want my judgement to get completely clouded or go in a direction that spins out of control. I thought it would be helpful to do a check-in with the garden web world and hear some outside perspective to reground myself. Though my husband and I have owned 3 other older homes, we've never embarked on restorations the way that this house requires. We're younger folk and have learned so much through this process. We also realize how important it is for both of us to be on the same page and moving the same direction. So, my husband is enjoying reading these posts, too. It is one of the tools that we're using to "meditate and soul search" with this. It really does come down to the lifestyle we want to create in the future.

I totally admire those of you who love and care for your homes no matter the age or size :-)

As far as economic situation, we definitely aren't the super wealthy. We do like to make sound personal and business decisions. We've realized that without the insurance contribution from the hailstorm it would put many of our dreams for this home out of reach. It has offered us an opportunity.

    Bookmark   April 22, 2009 at 5:46PM
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The other people have added some good insight -- maybe mine will help as well. We have restored two old houses (1918, 1906) that we lived in until we outgrew them and are now in a Victorian as well. We were fortunate to have remodeled the other ones during better real estate markets and always with an eye toward resale, even though we loved each house, we were never sure it was "it." We did a lot of work ourselves and made a lot of money on each one. This one is vastly different, as it has the potential to be similar to yours -- will take much more to fix up than we would get for it, one of the biggest on the block, and would take a special buyer if we ever did sell. All that said, you have to really look at whether you love it enough to stay and put in the investment (by the way...$200 to $300 K sounds very high for the exterior work...and I'm used to Chicago prices..I wonder if they are pricing it because they assume you can pay...)I'm also wondering if you're a little burned out. Could you take some time off from the rehabbing -- leave town if that's what it takes to get away from it---and just think through what you like and don't like. Assume you'll never get back what you paid -- do you love it enough to keep going? Can you scale back on some work (except the exterior work) and live with it as is for awhile to give yourself some breathing room?

It's a tough call, as we are in a situation with few "quick" fixes, so we have to really think -- do we add a master bathroom and eat up all the bedroom space or will we sell in 5 years? So, we end up not doing anything for now. I think we'll be here a long time, but I have a hard time throwing caution to the wind and saying we'll live here forever, who cares about resale. Hope that helps and doesn't confuse the issue...keep us posted.

    Bookmark   April 22, 2009 at 9:56PM
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Square footage is a good comparison tool. How much is the purchase price per sq ft? How much does a house in restored condition go for, per sq ft? That's one way of finding a safe range for added improvements. Adding square footage can sometimes be a good investment, if you are adding a room that would be capacity-growing. An addition of a third BR to a 2 BR house is very helpful and likely to be recouped. Adding a huge kitchen to a house the already has an adequate kitchen would be less helpful.

    Bookmark   April 22, 2009 at 10:37PM
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Very interesting discussion. But what hit me first was the "replacement cost from insurance $100,000." How would you feel if a fire riped through this gorgeous lovingly restored property? Would your homeowner's insurance fully cover roof and water damage? Is there asbestos in the basement?

Young people feel invincable and never think some major injury could happen to them.....auto accident, sudden serious illness of child. Do you have 8 months of living expenses in savings? Could you live on one salary?

I know this is not what you are asking, but perhaps it is time for a reality check before you embark on any more restorations. I agree that many children have been raised in similar environments and have learned many life lessons as a result. Some people make restoration a life-long hobby and enjoy seeing the results of their labor.

What works for one person, may be lousey for another - that's life. Think back onto why you purchased this property in the first place.

Look into energy conservation federal, state, local programs that you might qualify for to ease the cost of upgrades.

Perhaps it is time for a mental break and all the mental gymnastics you are experiencing. Enjoy what you have now and then develope short and long range goals. All IMHO

    Bookmark   April 23, 2009 at 6:30AM
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Wisconsin was on the list, but I'm sorry dear...I need the entire 6000 sq ft :oP I want a big sewing room and DH insists on adequate wine storage...we have a 3 year old so that's a LOT of wine. Speaking of wine...do you drink? I think taking up drinking always helps with old house restoration issues :oP

You know, we've taken this question of yours and applied it to all of the homes we've looked at throughout the country, mostly in Wisconsin, Minnesota and Washington. These big old beauties in particular are rather daunting when it comes to the sheer magnatude of work required to do the basic stuff that has to be done regularly, let alone the every so often stuff like new roofs. The one we had agreed to go ahead on had a serious need for an immediate paint job outside. $30,000!!! Ouch and you get to do that how many times in a lifetime?

But if you can afford to love the joint, without being rediculous (we have looked at a couple of houses that were just too far gone to make it a wise investment) it is a rewarding task, especially with a beauty like yours. One of the houses we seriously considered was Starrett House (in port townsend wa, google it...it's gorgeous) ok it's gorgeous on the outside, and superficially on the inside, but when you start poking around you realize the serious needs. That gorgeous home, for sale for about a million, needs about a million put into it to bring it back to the show house it as when I was a little girl. It's an amazing home, and I absolutely would love to do it, but at that amount it's a rediculous purchase. I guess that would be the definative "unhealthy investment" although you'd be buying one of the nicest and most distinct homes in the pacific NW so I can see how someone could be talked into believing it was worthwhile...we even caught ourselves trying to justify the purchase LOL

I hope your beauty has many many years ahead of her. She's amazing and if you stay or sell, I'm sure she's the type of home that will find the right people...homes like that normally do!

    Bookmark   April 24, 2009 at 10:42PM
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I purposely read all of the responses to your posting before looking at the pics. I really have to tell you that you have one of the most gorgeous victorian homes I have seen in a very long time. After looking at you pics, I must say that living this way is not just a temporary situation for you. (You may correct me if I'm wrong.) You have made it a lifestyle.

I personally couldn't imagine leaving such a gorgeous home and I think you are having a hard time with that as well due to the fact that you were so concerned with "future stewards". You wouldn't be as worried about that if you were ready to move on. I know that something as rich as the history of a home is almost addictive and can't be replaced no matter how fancy of a newer home you may choose or build.

We all have to make trade offs for what we want. That being said, it really just sounds to me like you need a break from all of the craziness of remodeling. You need to simply enjoy what you have for a while. I'm not saying quit! Anyone who lives in an old house will tell you - it doesn't work. Just a breather and maybe you will see things clearly when you step back for a better view.

And just one more thought- you really need to get a few other estimates on the outside work. That sounds insanely high, especially now that so many really good contractors are looking for work. You should be able to use that to your advantage.

Good luck and maybe a prayer wouldn't hurt either.

    Bookmark   April 25, 2009 at 4:50PM
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In my area, the Hamptons, your Victorian would be a multimillion dollar property. It's lovely.

    Bookmark   July 23, 2009 at 5:00PM
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"Replacement cost from insurance $100,000 or so"

They used the wrong repair/replacement schedule.

You do not want replacement with modern materials like drywall, but 'like kind' materials like plaster and solid wood wainscoting.

It is more expensive insurance, but will restore things to their original condition.

    Bookmark   July 24, 2009 at 10:03AM
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I know this is an old thread, but Oh. My. Gosh what an amazing house. The situation of the house alone - large property, near a river, near city makes it incredibly valuable and worthwhile, IMO. If, of course, you can afford it's maintenance. And do remember that it doesn't end, there will always be something to fix.

I am full of envy, it's just stunning!

We live in a renovation zone with our 3 yr old, and she's perfectly happy. I grew up in a house undergoing renovations for the better part of my childhood, and I'm doing the same as an adult, so I guess it didn't damage me too much ;) (I do have siblings though who only prefer brand new, others like me who like old).

FWIW on taxes - our taxes have tripled during renovations but that has nothing to do with the renovations themselves, the location went from urban ghetto-drug infested blight to hip, urban revitalizing community (fortunately we bought during the former, with low interest rates and cheap property). So the tax increase is really only the value of the land.

I agree you need additional estimates. And how long can it wait before you replace it all? Are you in a position to do it?

Re: the value - honestly that only matters if you're going to sell. If you plan to stay, it doesn't matter as long as you can afford it.

re: busier street - with that much property, the kids don't need to be near the street.

Did I say I loved your house?!

    Bookmark   July 24, 2009 at 3:22PM
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