The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: MountainTown on June 03, 2017, 12:54:40 PM
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We are considering an offer on a house today. It's a decent neighborhood. In town. About 2 miles from our respective work places(at the most). It's a bike friendly area, though biking in the winter can be tough.
Right now we live off one car so we may need to buy another(we currently live within 1.2 miles).
Anyways, my question is this. It has an electric forced air heat system. Is that a major downside or what? My understanding is this is generally way less efficient but I don't know much about this stuff. I am guessing the builder just did it to save on not hooking up a gas utility. The average bill is $142. Highest $283(January). We live in a wintry, snowy state so....this isn't horrible but it is about double what we pay for our little 900 sq foot place. I talked to my brother and he has about 2000 to 2500 sq feet and he pays around $150 a month so given that this house is about 1100....it's a little high.
I am wondering if it's worth the tradeoff though. The house is well within our price range and cheap enough that we could live off of my wife's salary(the smaller one) and still afford the payment.
Also I should mention that it reeks of dog. Without about 1000 sq feet I am pretty much budgeting another $6000 to $8000 for flooring...does anyone have experience getting rid of dog smells? Will ripping everything out be necessary? They recently washed the carpet upstairs but the downstairs part was an engineered laminate.
Thanks for the advice!
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If you don't like living in 900 sf, 1100 including a second story is going to be about the same because of the loss to the stairs. I would pass for that reason alone. If gas is available, I prefer to heat the air and water with gas and use gas for the cook top. Electric ovens are generally superior.
ETA: Don't waste time looking at houses that don't really meet your needs. Give the agent your minimum requirements and don't look at houses that don't meet those criteria. Too easy to get sucked into something that's cute or cheap but does not meet your requirements. You will either buy it and regret it or dither and frustrate yourselves and your agent.
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The answer depends on your market.
In some high cost areas, you're really buying expensive dirt that happens to have some prearranged construction materials on it. So you pick the location that fits best, and basic remodels are almost a rounding error in the price. In other places, it's reversed.
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Hey AR....Yea I guess I should mention that we really only live in about 600 of the square feet we have...the rest is in the basement. And this place does have a garage so we could store a fair amount there. I hear you AR but in my market, we aren't going to get anymore square feet in that price range. We would need to goto 270 to 300.
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In the end, going to $270-$300k may be the better choice. The value of a house that appeals to the broad market maintains itself better in all market conditions. Properties that do not appeal to the broad market suffer larger declines in value when the market goes south.
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Anyways, my question is this. It has an electric forced air heat system. Is that a major downside or what? My understanding is this is generally way less efficient but I don't know much about this stuff. I am guessing the builder just did it to save on not hooking up a gas utility. The average bill is $142. Highest $283(January). We live in a wintry, snowy state so....this isn't horrible but it is about double what we pay for our little 900 sq foot place. I talked to my brother and he has about 2000 to 2500 sq feet and he pays around $150 a month so given that this house is about 1100....it's a little high.
I am wondering if it's worth the tradeoff though. The house is well within our price range and cheap enough that we could live off of my wife's salary(the smaller one) and still afford the payment.
In Florida? Sure, electric forced air heat should be fine because you'll never use it. That $283 winter electric bill in a snowy region with that type of heating system sounds like someone cuddled up in a really good blanket most of the month and set the thermostat low. Of course, it depends on a lot of factors, such as insulation, etc. But electric is pretty much the least efficient means of heating your house. The good news is that a new gas furnace shouldn't set you back too much, possibly less than you're budgeting for new flooring.
There have been three houses that I viewed with a realtor where I left after 15 seconds due to smells. There are some smells that you will rip the wall boards out to get rid of. Any house that has ever been heavily smoked in is immediately removed from my lists. I haven't encountered a house that significantly reeked of dog, though.
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Threefive: I agree...but what about the gas utility ? I don't think it's hooked up. Is that a significant expense? It's also a split lot so there is a house closer to the alley...I am wondering if there was some cost prohibitive reason?
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Threefive: I agree...but what about the gas utility ? I don't think it's hooked up. Is that a significant expense? It's also a split lot so there is a house closer to the alley...I am wondering if there was some cost prohibitive reason?
If you don't have gas to the house, then there is always propane or even heating oil, both of which should be cheaper for the same amount of heat as all-electric. A heat pump system would also be significantly better and provide AC in the summer. When it's so cold that the heat pump is pretty inefficient, it will switch to auxiliary heat (in this case, electric). But, compared to straight electric 100% of the time, it's still a big win. Heat pumps cut, on average, 50% of electricity use compared to an electric furnace. Heating and cooling make up about half of a homes typical electric bill. This means switching to either a heat pump/gas/oil furnace can cut your total energy bill (electric + possibly gas) by roughly 25%.
Now, is it worth it to you to make a big capital expense if the system is working fine? If you have a decent duct system, for a 1,000 sq. ft. house, a replacement furnace of any fuel will be around $5,000 installed. (This could vary WILDLY depending on labor rates in your area). You could easily save an average of $25-50 per month (lots more details needed to narrow that range). So, best case scenario has a 10 year pay back period. Maybe not worth updating until you have to.
All of that said, if I was evaluating a small 1,000 sq. ft. house that really needed a new HVAC system, floors, and smell remediation, then I would pass unless I could get it for close to half the going price per sq. ft. and I was intending on gutting it, anyway.
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When I was house shopping, I'd always ask whether the owner could let me view their previous 12 months utility bills. Virtually NO ONE had thought of this. Yet, it's important info in my LCOL area where utilities account for as much as half the mortgage! So if you're looking to sell, please provide these numbers for prospective buyers who might be unsure whether their budget will work in your house. If you're looking to buy, ask for this info. It might reveal a HVAC system on the fritz.
From what I know, I agree that a heat pump will be your next furnace, and that you don't replace it till it breaks. Instead, invest in insulation, windows, etc.
IDK how urgent your timeframe is, or how scarce houses are in your area. But if you have the luxury of time, I'd encourage you to keep shopping. If that dog smell never leaves the house, you might need new ductwork at close to $10k (voice of experience here).
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Thanks Chp and Three for your input:
I really value your skepticism...but I have to say in answer to your questions....houses are very scarce. Unfortunately, if I want to buy in my area....anything more acceptable would cost $40k more. So the question becomes is it worth the risk/cost of some fixing?
My timeframe is not at all urgent. Honestly we have been searching for a year and we are just exhausted, annoyed, tired. We just want to commit, settle down, and be done with it.
As for the HVAC...I guess I wonder if we -need- a new system. I mean ultimately I can say that it will cost $50 more a month for sure. I guess I wonder how big of a problem that is. It's not great...but yea I don't think it's worth a capital expense of $5000 to 8000 upfront. I wonder if the saleability will be affected? I definitely am uncertain whether we would break even on the investment.
I also wonder if solar(as it improves) and with the tax credits may be the better investment. I know natural gas is cheaper but ultimately the tax credits may offset some of the investment.
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For the smell part: I surprisingly purchased a disgustingly smelly rental property. Surprisingly because it is in a great owner-occupied area and I can't believe I didn't get out bid by an OO but that is how bad the house stunk. House reeked of pets and there was mold in the basement. I purchased an Ozone Generator off of ebay for $150 and turned it on every night when I left. That $150 machine made me $60k on that house! It took the smell out so well that I now use it for other rentals that had pets and my wife takes it to work to get rid of the musty smell every couple of weeks. Some Ozone Generators are sold for health reasons but my lungs always hurt when I was around it for more than a minute or two so be careful with it if you are going to be occupying the building. Also, air it out a bit once you turn it off.
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For the smell part: I surprisingly purchased a disgustingly smelly rental property. Surprisingly because it is in a great owner-occupied area and I can't believe I didn't get out bid by an OO but that is how bad the house stunk. House reeked of pets and there was mold in the basement. I purchased an Ozone Generator off of ebay for $150 and turned it on every night when I left. That $150 machine made me $60k on that house! It took the smell out so well that I now use it for other rentals that had pets and my wife takes it to work to get rid of the musty smell every couple of weeks. Some Ozone Generators are sold for health reasons but my lungs always hurt when I was around it for more than a minute or two so be careful with it if you are going to be occupying the building. Also, air it out a bit once you turn it off.
I'm very intrigued. What is the proposed method of action that causes ozone to neutralize odors? Is it just a disinfectant?
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For the smell part: I surprisingly purchased a disgustingly smelly rental property. Surprisingly because it is in a great owner-occupied area and I can't believe I didn't get out bid by an OO but that is how bad the house stunk. House reeked of pets and there was mold in the basement. I purchased an Ozone Generator off of ebay for $150 and turned it on every night when I left. That $150 machine made me $60k on that house! It took the smell out so well that I now use it for other rentals that had pets and my wife takes it to work to get rid of the musty smell every couple of weeks. Some Ozone Generators are sold for health reasons but my lungs always hurt when I was around it for more than a minute or two so be careful with it if you are going to be occupying the building. Also, air it out a bit once you turn it off.
I'm very intrigued. What is the proposed method of action that causes ozone to neutralize odors? Is it just a disinfectant?
Yep.
It's the opposite of "Anti-oxidant".. the ozone free radicals get to work on the nasty organic odours. I am sure there is a more technically accurate description, but that is how i think of it. Ozone is used for hot tubs, too.
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The electric forced air furnace is 100% efficient. It is much more efficient than any oil or gas furnace. What it does is burn expensive energy so it is often more expensive to use as heat. Efficiency is the wrong word.
Oil is cheap right now and so is natural gas. Not long ago oil was very expensive.
You can add a heat pump to an electric forced air furnace to get less expensive heat. At least you have ducts and so have the ability to swap in another forced air furnace using oil/gas/etc. My home has little wall heaters in each room powered by electricity only.
We burn wood for 100% of our heat.
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Wow thanks for all the great info. I will definitely look into this ozone generator thing. I didn't get the house(we are back-up) so who knows. But there are plenty of smelly houses out there....
Btw, what is a heat pump? I see this mentioned a lot but I must admit I'm not quite understanding what this is our how it interacts with the electric forced air heat?
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Wow thanks for all the great info. I will definitely look into this ozone generator thing. I didn't get the house(we are back-up) so who knows. But there are plenty of smelly houses out there....
Btw, what is a heat pump? I see this mentioned a lot but I must admit I'm not quite understanding what this is our how it interacts with the electric forced air heat?
A heat pump is an air conditioner that can run in reverse. It can either pull heat from outside and bring it inside, or vice versa. It's the same principles of evaporation/condensation as an AC, but switchable in terms of which way you want the heat to go.
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This sounds like a heat pump with auxilliary electric heat. A heat pump is whole house AC that also works in reverse. When it gets cold, you flip a switch, and it cools the outside and warms the inside. You get 2-4 times as much heat per kW as with electric baseboard. The limit of the system is that it just cannot extract enough heat from the outside air when it is below 30 F /0 C, give or take. It needs to be supplemented with electric heaters (like in your toaster). Everything is in one box.
Geographic location is important. These work surprisingly well up to the midpoint of the country and all along the west coast. Like, say, Cincinnati. By the time you get the great white north, you definitely need a real furnace.
You might consider supplementing this system with a wood stove, depending on the cost of firewood in your area and your desire to fiddle with a stove 3 times a day.
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I currently rent a place with electric forced air heat. The furnace is metered separately and has a special winter electric rate that's about half the normal rate.
The bill is about what I'd expect for natural gas heat.
If there isn't a similar arrangement with the electric utility for the property in question, I'd pass.
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For the smell part: I surprisingly purchased a disgustingly smelly rental property. Surprisingly because it is in a great owner-occupied area and I can't believe I didn't get out bid by an OO but that is how bad the house stunk. House reeked of pets and there was mold in the basement. I purchased an Ozone Generator off of ebay for $150 and turned it on every night when I left. That $150 machine made me $60k on that house! It took the smell out so well that I now use it for other rentals that had pets and my wife takes it to work to get rid of the musty smell every couple of weeks. Some Ozone Generators are sold for health reasons but my lungs always hurt when I was around it for more than a minute or two so be careful with it if you are going to be occupying the building. Also, air it out a bit once you turn it off.
I'm very intrigued. What is the proposed method of action that causes ozone to neutralize odors? Is it just a disinfectant?
Ozone is a more reactive form of oxygen. The molecule is O3 instead of regular O2. It reacts with anything, essentially burning it up. On a small scale, in the case of a home ozone generator. Because it is so reactive, you cannot store it. You need to generate it just before use. High levels of ozone are harmful, but it should dilute into the air quickly to safe levels. I would not stand close to the generator.