Lifespan of a New House

Lifespan of a New House

Lifespan of a New House

I posted an article yesterday from the Atlantic; “Stop Fetishizing Old Homes” https://www.theatlantic.com/ideas/archive/2022/01/stop-fetishizing-old-homes-new-construction-nice/621012/?fbclid=IwAR34vZMS8I4eO_sM7RkZhQqVdBIkpHrFej9fwJWUDSURr_f7IUNTYmFRHuE

I got a kick out of the title, but the fact is that homes are just not designed or intended to last forever.

U.S. tax code allows depreciation on income properties over a 27.5 year period, but to keep a building in descent condition, it will need at least one major renovation (or more likely several smaller ones) to make it to 27.5 years.

Major components like roofs, windows, furnaces and water heaters will probably need to be replaced by 15 – 20 years. Bathrooms and kitchens finishes are probably looking pretty dated at 10 or 15 years and have you noticed that all the fancy appliances we have these days seem to be designed to be replaced by the time they are 5 – 10 years old.

When you move into a brand new house today, all the building components are new, all the cool finishes and appliances are new, so you have this honeymoon period of the first 5 – 7 years where maintenance and repairs are very low.

Now If you are the type of person who gets a new car every few years to avoid maintenance and repairs, you know what I’m talking about.

You’d be wise to sell after the first 5 to 7 years and buy a new house. This will get you the most appreciation, because the design and finishes are all still new enough to be similar to a brand new house, So You’ll get a price similar to what a brand new house might be selling for at that time, plus you’ll sell before you need to start to incur costs replacing appliances or doing any re-modeling.

The equalizer that rains on this parade is of course is that your transaction costs may wipe out a big chunk of your appreciation.

If appreciation is very high for a number of years (as it has been recently), you might outrun this by holding a bit longer, but what has happened in recent years is that lifestyles have changed more rapidly and the designs and finishes that people want has changed too. In this situation even houses 10 years old are may be looked at as needing more work to update them. Which of course create a bigger price differential to a new house.

This is why, you are far better off building your own custom home. I did a YouTube video talking about this and showing a comparison of buying a re-sale house to a new house or a new custom house. (from: Don’t Buy a New House! BUILD IT) https://youtu.be/nrFjxvYQtI8

If you do it correctly, You’ll be locking in a big bump in your equity of 10 -15 % of your costs as soon as you move in and this is in addition to any appreciation, so you’ll be putting all that into your pocket after 5-7 years.

To learn how to do it, get my new book on Amazon:

✅ Don’t Buy a New House! BUILD IT https://www.amazon.com/gp/product/B09PSFMC6Z/

✅ Chance to win a FREE Copy: https://LD2development.com

✅ Amazon Author Page https://www.amazon.com/author/rogerluri

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✅ Let’s connect:

YouTube: https://bit.ly/LD2YouTube

Linkedin: https://www.linkedin.com/company/ld2-development/

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Old House vs New House?

Old House vs New House?

“Stop Fetishizing Old Homes”

Maybe you’d say; “hey, I like all the old designs and finishes and a bit of wear and tear gives it that lived in character that some people find comforting.

For sure that’s true and I’d say; first and foremost, get a house that’s going to make you happy. As long as you understand that you aren’t really saving money by buying an older house.

I mean, If you’ve been shopping for an older home, you already know that if designs and finishes in the house are getting older, you expect to pay less because it’s going to need things replaced and updated.

Of course if you plan correctly, you can recoup money you spend on renovations, but if not money spent fixing up an old house may not be recovered when you sell.

As a professional, I just want people to understand how they can get the best financial results from their investment.

Financially, assuming that you can afford it, a new construction home is a much better investment.

If you take a look at my YouTube channel , you’ll see video with a comparison of buying a re-sale house to a new house or a new custom house. (from: Don’t Buy a New House! BUILD IT) https://youtu.be/nrFjxvYQtI8

It’s not really that hard to figure out if you just add up and extrapolate your costs over the time you’ll own the house and then look at what you can hope to sell it for.

In any case, most people prefer living in new construction because it has the amenities & finishes they want and they don’t have to worry about a lot of maintenance or repairs.

And I can’t think of one person I’ve met over the years that didn’t prefer making money on their house when they sell it. And it’s really not that hard to do if you plan ahead.

If you want to stay in your house forever, all this is probably of no interest to you, but if you want a new house, you’d probably also like to make money when you sell it, so check out my new book on Amazon:

✅ Don’t Buy a New House! BUILD IT https://www.amazon.com/gp/product/B09PSFMC6Z/

✅ Chance to win a FREE Copy: https://LD2development.com

✅ Amazon Author Page https://www.amazon.com/author/rogerluri

_________________________

✅ Let’s connect:

YouTube: https://bit.ly/LD2YouTube

Linkedin: https://www.linkedin.com/company/ld2-development/

Facebook: https://www.facebook.com/LD2Development/

Instagram: https://www.instagram.com/ld2development/

https://www.theatlantic.com/ideas/archive/2022/01/stop-fetishizing-old-homes-new-construction-nice/621012/?fbclid=IwAR34vZMS8I4eO_sM7RkZhQqVdBIkpHrFej9fwJWUDSURr_f7IUNTYmFRHuE

Don’t Buy a New House! BUILD IT 

Build Wealth by Building Your Own Custom House

Build Wealth by Building Your Own Custom House

Build Wealth by Building Your Own Custom House

I’ve been talking about how you’ll save 10-15% or more by building a new custom home rather than buying a new house that a builder built on spec., so here’s how the numbers work:

In Chicago, when a builder sells a house to you that they built, they have to pay about 7% commissions and closing costs right off the top. If they made only a 7% profit for all their investment, that’s 14% that’s already 14% you’d save by building yourself the same house.

Believe me, the builder is shooting for much more than a 7% profit. Think about it, the builder had to purchase the lot, design the house, build it and sell it. For a smaller house in the city, this process will take a year’s time anyway and they’ll have to invest their own cash (probably about 30% of total costs) to get the construction loan.

If they build the same house for you, they don’t need to take out a loan, there is no construction or market risk for them, so they’ll be happy to do it for a smaller profit.

You save the closing costs, a good chunk of the builders profit and the financing is going be cheaper for you because a loan for your primary residence is less risky for the lender than a spec house. you are getting exactly the custom house you want and you get it at wholesale.

If you do it right, you’ll have built yourself instant equity the day you move in. This equity bump is the game changer that builds wealth for you independent of any market appreciation.

Amazon New Book Release:

Don’t Buy a New House! BUILD IT 

What’s Your Return on Your Biggest Investment?

What’s Your Return on Your Biggest Investment?

What’s your return on your biggest investment?

Your home might be your biggest investment, so shouldn’t you be earning a good return on that equity?

Suppose you put a 10 or 20% down payment on your new house. And let’s say you sell in 5 years. If market appreciation happens to be low during that period, it might just cover your commissions and closing costs and now you made 0% return on your equity.

My new book “Don’t Buy a New House! BUILD IT” shows you how you can build your brand new own custom home. And explains that you can save 10-15% or more by having someone build it for you. That’s a lot of equity the day you move in!

Now, suppose instead you put that 10 or 20% down payment toward building your own new custom house. And then you sell in 5 years. And again we assume that appreciation is low during that period and just covers your transaction costs.

If you saved only 10% by building yourself, That’s a 100% return on your 10% down payment, or a 50% return iof you had a 20% down payment. Divide that by 5 years, you’ve made a 10 or 20% annual return on your equity! It’s likely, these numbers will be quite a bit higher, because a new house is very likely to appreciate more in those first 5 years than an older house.

Now we know most people are just not going to want to put in the effort to build their own new custom house. The idea is just outside of their comfort zone.

Yet those same people will go out right now and buy and older home that needs work, And it’s definitely going to need more work over the years they own it! Then they’ll be lucky if they break even when they sell. If they get really lucky, it will appreciate more and they’ll do a bit better.

But instead of starting at zero and hoping for appreciation, Wouldn’t it make more sense to start with a better, brand new house and with a substantial return locked in?

You miss a lot of opportunities by staying in your comfort zone!

My new book: Don’t Buy a New House! BUILD IT Might help you stretch that comfort zone a bit. It will show you how the numbers work and how to find your site and find the people to help you design, spec and build.

Grab a copy on Amazon and learn how it’s done. https://www.amazon.com/gp/product/B09PSFMC6Z/

 

2 New Books!?

2 New Books!?

Probably releasing 2 new books in the same month is not the best strategy, but hey, what can I say!

The books are really written for 2 different audiences.

Don’t Buy a New House! BUILD IT

Is written for people who are interested in buying a new house, but are having trouble finding what they want. I wanted to show them that right now is actually a great opportunity for them to take advantage of the best market I’ve ever seen to build their own custom house and how they’ll be creating wealth in the process.

My other book:

Don’t Buy Multi-Family! BUILD IT

Was just released. Is written for investors interested in multi-family income properties who are finding that none of the properties that are on the market now make sense. There is more and more competition to buy properties that are really marginal investments at best.

Meanwhile, developers are putting up new apartment towers, offices and condos as fast as they can build them.

I’ve been in real estate and development for 35 years now and I’ve never seen a better time for investors to build new construction investment properties.

This book will show you can take advantage of it. Here’s a link to get the book on Amazon:

https://www.amazon.com/gp/product/B09PSFMC6Z/

If you subscribe to follow this channel, in the coming days and weeks, I’ll be posting videos with more detailed information and examples from the books.

If you have more specific questions, you can reply here, or refer to our web site https://www.ld2development.com