Author Topic: As a new and inexperienced homeowner, how do I avoid wasting money?  (Read 4683 times)

mulescent

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Dear Mustachians,

I'm looking for some advice and your thoughts.  In many ways, I'm a very frugal person.  I currently save about 40% of my post-tax income.  I have no debt other than a mortgage on my house.  I bike to work every day and don't buy a bunch of crap.  I just started my first real job, so I don't have a ton of savings (~80k).  So, I'm on course to save quite a bit over the next few decades, but because I make lots of money (~100k USD), I know I can do much better.  Two things really hold me back:  food and housing.  I have a clear plan for dealing with the food excesses (I cook a lot, but just don't focus on cooking frugally).  The housing situation is where I am having trouble.  There are two issues:

1)  First, I bought a way-too-expensive house a few months ago (~400k, so my monthly payment including PITI is ~2,100).  I live in an expensive city, so my isn't a McMansion.  At 1000 sqft, I think it's is the right size for me and my partner.  Furthermore it would rent for approximately the same as my mortgage payment.  So the problem isn't that the house was a bad investment, just that it eats up a sizable fraction of my take-home pay.  This makes it hard to hit Mustachian levels of savings.  I'm not sure I can do anything about this but ride it out.

2)  Second, I had NO idea how much knowledge/work goes into dealing with a home.  The house is ~100 years old, but thankfully is in pretty good shape overall.  However, there are a bunch of maintenance items that will need to be dealt with in the next five years.  The major ones include an ageing furnace, roof, exterior paint, fences/deck and landscaping. I budgeted for outsourcing these maintenance items (~12k/yr), but I would love to recapture some of that budget by avoiding outsourcing.  However, two factors are against me.  First, I have limited time because I work a demanding job (60+ hr/week).  That means I can probably only contribute ~10 hr/week to working on my house.  Second, I have lived in apartments my whole life and have little skill in building/painting/mowing/growing/etc.  So, how I can invest the hours I do have most effectively?  What can I safely experiment with and what should I stay away from because of the potential cost of screwing things up? What big mistakes loom on the DIY vs outsourcing horizon?

Any thoughts or pointers to resources would be most welcome.

olivia

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I think you can definitely do lawn mowing and landscaping yourself. Do you need to plant stuff for curb appeal? Or just mow?  If it's curb appeal, do you have any neighbors with nice landscaping? And are your neighbors' houses a similar style to yours?  If so I would talk to them about what plants they have, or even just snap a pic and take it to a nursery.  And only get plants that thrive in your area, and would do well in the sun/shade depending on location.

For mowing, I would try out a basic push mower.  The non-mechanical kind, provided your lawn isn't incredibly huge.  (I'm picturing rowhouse based on age but could be wrong!). Mowing is as easy as it gets, especially if you don't use a mower with an engine. You just push it up and down the lawn in rows! I actually like mowing, it was one of my chores growing up.

As far as roofing, painting and deck building, if you have zero experience I'd probably contract it out. Painting would be easy enough for you but you'd probably need to scrape paint and use scaffolding unless you want to stand on a ladder, which wouldn't be my idea of a good time, and I'm not that afraid of heights! 

The good thing is that a lot of these items are only necessary once every 5-20 years so once you pay for them, you won't need to pay for them again for a long time!

Arbor33

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1)  First, I bought a way-too-expensive house a few months ago (~400k, so my monthly payment including PITI is ~2,100).  I live in an expensive city, so my isn't a McMansion.  At 1000 sqft, I think it's is the right size for me and my partner.  Furthermore it would rent for approximately the same as my mortgage payment.  So the problem isn't that the house was a bad investment, just that it eats up a sizable fraction of my take-home pay.  This makes it hard to hit Mustachian levels of savings.  I'm not sure I can do anything about this but ride it out.

I wouldn't justify an investment on whether it can hypothetically support itself financially. If you bought the property to rent out, it probably wouldn't make you much money (if any) but the fact is it's not a rental. You've purchased a liability and that's perfectly okay. Just know that owning this home is optional and you CAN do things about it should you choose to. I'm not sure where you live, but in my area it's acceptable to write an offer on another home contingent upon the sale of yours. It's not as likely to be accepted, but you do have options my friend.

2)  Second, I had NO idea how much knowledge/work goes into dealing with a home.  The house is ~100 years old, but thankfully is in pretty good shape overall.  However, there are a bunch of maintenance items that will need to be dealt with in the next five years.  The major ones include an ageing furnace, roof, exterior paint, fences/deck and landscaping. I budgeted for outsourcing these maintenance items (~12k/yr), but I would love to recapture some of that budget by avoiding outsourcing.  However, two factors are against me.  First, I have limited time because I work a demanding job (60+ hr/week).  That means I can probably only contribute ~10 hr/week to working on my house.  Second, I have lived in apartments my whole life and have little skill in building/painting/mowing/growing/etc.  So, how I can invest the hours I do have most effectively?  What can I safely experiment with and what should I stay away from because of the potential cost of screwing things up? What big mistakes loom on the DIY vs outsourcing horizon?

This is a perfect opportunity for you to learn about home repair and construction in general. Most people are capable of more than they give themselves credit for in this area. Tackle things in small chunks when you have time. The roof work and deck might be better left to a professional, but if you have any friends who do this sort of work, ask if you can help/ask questions as they do the work. Learn as much as you can from the people you hire and eventually, you may not need to hire them. Some older furnaces are far easier to troubleshoot than new ones. Some problem solving skills and a multimeter can get you far. Fences aren't too hard either. You just need to keep everything true and do a lot of planning. Often lumber yards can quote a job for you and help you plan a bit. Don't be afraid to make mistakes. It might cost you a little more money if you have to do something over again but it's one of the best ways to learn IMO.

Youtube can be an awesome resource for doing small things around the house. Just dust off your bull-shit-O-meter and don't hesitate to verify some questionable methods with other sources.

Also, use this forum. Plenty of DIYers here.

Lans Holman

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I didn't know much about home maintenance when we bought our home either, so I sympathize. One thing I've learned when it comes to outsourcing the stuff that's over your head is that it's really worth it to spend some time finding the right person and then cultivating your relationship with that person.  Don't just flip open the yellow pages, ask around to all your friends if they have a plumber, electrician, or whatever who they really like and trust. Once you've hired somebody, treat them nicely.  Find out if there is any grunt work you can do in advance so they can focus on the important stuff.  (When we were renovating our garage I dug a ditch between the house and the garage to bury the new conduit in.  You don't want to pay an electrician by the hour to dig a ditch).  Make sure they understand that you may be calling them in the future if you have other problems.  Heck, you could even bring them coffee and muffins or something if they're going to be there a while.  Don't treat them as a disposable peon, treat them as someone who has an important skill who you are fortunate to have helping you.  This probably should all be obvious but I get the feeling that for a lot of people it isn't.

Arbor33

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I didn't know much about home maintenance when we bought our home either, so I sympathize. One thing I've learned when it comes to outsourcing the stuff that's over your head is that it's really worth it to spend some time finding the right person and then cultivating your relationship with that person.  Don't just flip open the yellow pages, ask around to all your friends if they have a plumber, electrician, or whatever who they really like and trust. Once you've hired somebody, treat them nicely.  Find out if there is any grunt work you can do in advance so they can focus on the important stuff.  (When we were renovating our garage I dug a ditch between the house and the garage to bury the new conduit in.  You don't want to pay an electrician by the hour to dig a ditch).  Make sure they understand that you may be calling them in the future if you have other problems.  Heck, you could even bring them coffee and muffins or something if they're going to be there a while.  Don't treat them as a disposable peon, treat them as someone who has an important skill who you are fortunate to have helping you.  This probably should all be obvious but I get the feeling that for a lot of people it isn't.

That's fantastic advice! Should be common knowledge, but of course, it somehow isn't.

jrhampt

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Good advice above, and I would add that you should approach trips to Home Depot etc. as you would grocery shopping -- otherwise it's too easy to get overwhelmed and spend a ton of money unnecessarily.  Always make a list, and prioritize chores/spending.  We have an ongoing to do list of maintenance chores, and generally pick out a couple each week that are high priority and/or easy to complete (touch up interior paint in hallway, mulch front beds, grind stumps, coat of poly/seal for outdoor furniture, spray plants, sand window sills and re-coat, stain fence, etc.).  If you're constantly making progress on your list, you won't feel so overwhelmed.

tooqk4u22

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Create a slush fund for all those big repair/replacement items and add to it monthly like it is part of your mortgage.  When it is time to get the work done get referrals and multiple bids. Also keep in mind that those large items don't need to be replaced until they actually fail or start costing you too much for ongoing repairs.  The painting is probably the easiest DIY and big savings as it is almost all labor.

cerberusss

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You say you make lots of money, but you do work 60 hours. I don't think it is that good, in all honesty. Especially when you consider that you will need to spend a lot of money on outsourcing the maintenance of the house and the garden.

Catbert

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Do you have friends or family in the area who also have houses?  A friend of mine is in an extended family of 5 individual families.  Over the summer each family has one weekend where everyone else comes and works on whatever they need done.  So, for example, on  one  weekend they go to family A's house and work on the landscaping 3 weeks later they go to family B's house and do exterior painting, etc.  The benefiting family is responsible for supplies and planning.  Food is potluck.

This only works if you trust everyone to show up and work as planned.  It helps if at least some of the participants are good at DIY.

Frankies Girl

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The YouTube vids on home repair can be VERY helpful, but I also go to the books as well sometimes (you can check DIY manuals out from the library, but it might pay to have a good general repair book on stuff like basic electric/plumbing/paint/etc of your very own). I've changed out light fixtures, installed ceiling fans, painted and grouted and changed out water heater elements myself - and I'm pretty darn proud of being able to do all of that too. I figure if I can't fix it, I'll call someone in and the worst is that I'm out the cost of the material used (which generally isn't that much anyway).

I also asked around my neighborhood and work for recommendations, and I've heard good things about Angie's List (you have to pay to access the reviews, but I've got a friend with a membership that will let me use for free) to locate professionals that do the stuff that seems to much for you to handle.

I've got a super plumber - and I've told him that, and recommended him to friends as well. He's an independent, so the small business aspect means that he can set his own charges instead of having the manager or the franchise set the pricing. He has in the past shown me how to fix stuff myself since it would be much cheaper for me to do it - like changing out leaky cartridge faucet seals - and done stuff that was amazingly difficult looking and time-consuming for much less than I thought it should cost since we do use him as often as we can. It really does pay to have a good relationship with a pro!

Also, don't neglect the power of grouping your repairs with neighbors! We had a tree trimmer out that we've used with happy results in the past, and a few neighbors came over while they were working on our trees, and asked me if I liked them. I totally recommended them and the neighbors got on the spot work done - and I got a 20% discount for getting them additional work! If you've got something like fencing that needs doing, check with the neighbors to see if they might also need some work done... and tell the company when setting up the job that you have several jobs in the area and they should offer you a discount for the extra work.

mulescent

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Re: As a new and inexperienced homeowner, how do I avoid wasting money?
« Reply #10 on: May 23, 2013, 02:42:59 PM »
Thanks for all the good thoughts, people.  I especially liked the suggestion to try stuff, cultivate good relationships with the people I do hire and involve neighbors and friends if possible!

PGH

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Re: As a new and inexperienced homeowner, how do I avoid wasting money?
« Reply #11 on: May 23, 2013, 03:46:05 PM »
If you have friends that are handy, you might want to consider hiring them to do basic work like painting or yard work. Huge caveat: this only works if you've seen the things they've done and none are structural/would cause an issue with inspections or safety.

Personally, I would try to learn how to do as much by myself, as I did when I was in my 20's and figured out how to do all my interior painting, install tile, and change the light fixtures in my house. (At one point, I did have to call the local Ace Hardware for electrical advice over the phone, but that worked out fine because I had purchased the items from them and I imagine they thought it was cute that a single young woman was doing it herself.)

I hear you on the work schedule, since I worked crazy hours during that period and traveled much of the time. So what I did was to pre-schedule 4 hours each week that I would work on my house. Initially, much of that time was spend researching and shopping, but eventually the whole 4 hours was devoted to work. In the end, I discovered I enjoyed it all so much that I upped those hours.

Completely agree with Lans re: treating your contractors well. We've only used contractors for tree and asphalt work, but we make every effort to have everything prepared for them and to immediately pay them in cash whenever possible. When cash flow is a challenge - as it often is for small contractors - a cash payment is golden.