Last time we looked at PITIU (Principle, Interest, Taxes, Insurance, and Utilities) as a truer definition of total monthly housing costs. But if you’re also considering a resale home, there are other costs that need to be figured in.
Replacements. How would we expect the resale and new homes to compare, replacement cost-wise, over the next 10 years? A May 24, 2019, article in U.S. News & World Report identified the life expectancy of several key products in the home. We’ve added average quality product pricing to come up with the following:
Replacement product costs for the resale home come in at $22,500 higher, which equates to $187.50 per month on average more. Now, not every one of those items may need to be replaced on the resale home within the next 10 years, but the likelihood of needed replacement is much higher for the older home.
Maintenance costs are likely to be higher for the resale home. From repainting a few rooms to having the carpets and air ducts cleaned, there may be costs you incur soon after moving in. More expensive projects will probably occur much sooner as well, such as exterior painting or cleaning/sealing/staining the deck. Maintenance ignored will hasten even more expensive repairs, such as redoing concrete driveways and sidewalks or rebuilding a wood deck. Of course, you can save some of the cost by doing these things yourself – if you have the expertise, tools, and time.
Sherwin-Williams' Harmony® paint contributes to cleaner indoor air quality by reducing VOC levels from potential sources like carpet, cabinets and fabrics. Harmony paint also works to help rooms stay fresher, longer, with odor eliminating technology that breaks down unwanted household odors. Photo courtesy: Sherwin-Williams
Your style. Then there’s the combination of your tastes coupled with the obsolescence inherent with a resale home. The previous owners may have loved those trendy light fixtures. You think they’re gaudy. Same goes for the bathroom mirrors. That big, deep, built-in entertainment center may have been perfect 20 years ago. Now it’s wasted space. The interior was repainted just before putting the home on the market – but mauve just isn’t your color. Yes, you can put up with these shortcomings for a while but compared to selecting what you want and having everything brand new, there are very real costs to settling for someone else’s choices. Plus, while something like changing out bathroom mirrors may be a project you can tackle, other projects may necessitate hiring professionals. You want to open the kitchen to the eating area and family room, but is that a load-bearing wall? Worse yet, it may be pretty much impossible to accomplish some tasks. So much for the 8-foot high basement ceiling you wanted.
Most of us need to be budget-wise when considering buying a home. When looking at the monthly housing budget, we start with PITIU. But if you are considering new construction and resale homes, product replacements, maintenance and repairs, and updates that correspond with your preferences, have to be included when calculating the monthly housing budget for pre-owned homes.
Next time we look at resale considerations when building new.
Bathroom Photo: Courtesy of Artistic Tile
Ceiling Fan and Bedroom Photos by Renee D. Calvin Photography.
Cover photo: <a href='https://www.freepik.com/photos/people'>People photo created by freepik - www.freepik.com</a>