Category: Rentals, Remodels, Relocations and Real Estate

Or actually, deconstruction has finally started!

We spent a lot of time this winter designing a big remodel plus living room addition, but it turned out it would cost way too much. Big disappointment!

We scaled the remodel down to something much more modest, and got bids at a small fraction of the cost of the original project. This new, smaller remodel does not include any architectural changes, no additions, and no expensive finishings (no wood beams, etc.)

Now we are finally able to start!  Today the demolition guys were at it.  Wow, it’s real now!

We are replacing the downstairs carpet with tile, and before we do that, we’re going to raise the living room floor (which is one step down). The step down is dated, and it’s a trip hazard.

John always disliked the brick underneath and behind the wood stove (I thought it was fine), but we are taking it out.

Now we need to decide what to put around the wood stove instead.

In our first “House Hunters” episode, we looked at these 3 houses:

House #1 (Needs work)

House #2 (Large and expensive)

House #3 (Cute but expensive)

See, I’m being repetitive, just like the real show! But unlike the show, we’re actually considering 6 houses.  Here’s the other 3.

House #4

This one has been sitting on the market for a long time (over 3 months), because it is over-priced.  The on-line photos are also poor. It’s possible they’d come down in price, since it’s not selling.  Or they could just be waiting indefinitely for that “right” buyer. Either way, it could be a nuisance to negotiate with a buyer who has an inflated opinion of the property’s value, and an agent who doesn’t bother to post good photos.

 

• Pros: Close to the foothills
• Cons: Over-priced and the listed price is over our budget

House #5

This house has been sitting for almost 3 months as well.  It’s a high price per square foot, probably because the owners have added some custom updates and want to recoup their expenses. Unfortunately, the upgrades aren’t what I would want for a rental.  The windows have built-in shades between the two window panes. Those are neat, but in the intense New Mexico sun, the strings will rot and the blinds will break inside the windows.  And that’s an expensive fix.  Also they’ve installed new, white carpet, which is just not practical for a rental.

 

• Pros: Close to the foothills, well cared for by the owners.
• Cons: High price per square foot, and also listed over our budget

House #6

This house is similar to House #2 in my previous post, and in the same neighborhood, but this one is smaller, and thus, less expensive. It’s only been on the market for a few days, and shouldn’t have any trouble selling.

 

• Pros: Closer to our budget than any of the other 5 houses. Newer, and doesn’t need very much work.
• Cons: It is tall and narrow, and feels like a townhome inside, even though it is a detached home. Very close to the neighbors.

And I don’t know, what do you think of that mish-mash of style elements? Traditional southwest wood accents…but with a turret?

We sold our rental property in California yesterday (yay)!  Rather than taking the money and going on wild spending spree, or trip around the world, we’re going to put it all back into rental property. This seems the prudent thing to do in order to help fund retirement. It also postpones taxes by rolling the money into replacement property. This is similar to rolling over other types of funds. The money never goes into your account, so it stays invested. It’s called a 1031 exchange.

One of the rules of the exchange is we have 45 days to identify new property. We’re buying 2, and luckily we’ve already identified the first one. So we only need to worry about finding the other one. This simplifies things considerably – I was worried about trying to buy two at once! I feel under a lot of pressure to do this right.  We’ve made mistakes buying property in the past, and I want to choose wisely.

 

They always look so much better in the photos than in real life!

Now let’s play “House Hunters!”

House #1

House #1 is an older 1-story, 3-bedroom.

(uh, no, the metal buffalo doesn’t come with the house)

• Pros – Across the street from a park, pretty backyard
• Cons – funky layout, needs updating inside, I don’t like the street name, and the listing price is over our budget.

Now you’re wondering what the street name is. It’s Admiral Emerson. It just doesn’t sound very homey to me.

House #2

House #2 is a 2-story, 4-bedroom on a small lot, in one of those newer subdivisions with tall skinny houses right next to each other.

• Pros – 4-bedroom, nice inside, doesn’t need any work, should rent quickly
• Cons – It feels like a townhome inside, even though it’s not. Also, it’s right next to the mailboxes for the neighborhood, so lots of people are stopping on the street in front of the house to get their mail, oh, and, it’s over our budget.

House #3

I haven’t seen this one yet, it just came on the market this afternoon.  So it could be a lot worse in person than it looks online.  But it sure looks pretty from the picture!

I think this one will sell fast.

• Pros: Great curb appeal
• Cons: There’s a hot tub in the backyard, which I’d love if it were for me, but I’m worried about liability for a rental. It’s also listed at a bit over our budget, but not by as much as Houses 1 & 2.

We’re looking at buying a house in Placitas. Houses out here are on their own septic and well systems, and it’s common for houses in this area to share a well with other houses.  This is presumably to save on the cost of drilling.  Wells out here have to be about 600 feet deep (no, that’s not a typo).  600 feet or more, compared to only 90 feet in other parts of the country. So it costs about $25,000 to drill a well out here.

Our current house shares its well with one other house. The permit allows the well to draw 1 acre-foot per year, which is 325,851 gallons.  This is more than enough for the two houses on the well. According to the EPA, the average American household uses about 300 gallons per household per day, which is 109,500 gallons per household per year.  This is about 120 gallons per person per day.  So a two-person household ought to use about 87,600 gallons per year.

We knew the house that we’re looking at buying shares a well with several properties, but we just found out this community well is permitted for only 3 acre-feet per year, and it’s shared with 13 other properties! A 1/14th share of 3 acre-feet isn’t nearly as much as half of 1-acre-foot. Our 1/14th share would come to only 69,825 gallons per year.

Do we actually need the national average of 43,800 gallons per person per year?  Domestic water use in deserts is generally higher than in the rest of the country. Part of that is the use of evaporative coolers for air conditioning.  Evaporative coolers use significantly less power than central air conditioning using a condenser, but they use a lot of water. Also it’s very hard to grow anything in the desert without at least some irrigation, even though most people in our area do not have lawns.

Our real estate agent is assuring us that only about 62% of the water allocated to this community well is currently being used on an annual basis.  I’m wondering why?  Are all our neighbors using vastly less than average? Is it because there’s almost no children in this retirement area? Is it because many people are only here seasonally?

The real question, that we can’t answer, is “Will there be a water shortage in the future?” Or at a more basic level, will we regret buying this house?

UPDATE!  Our real estate agent just found out that the original water rights were expanded to 4.05 acre-feet per year, so now each household is limited to 110,000 gallons per year.  Here’s the new graph, showing the current household limit on this community well to be nearly identical to the average US household usage.  So we still can’t go crazy with gardens and fountains and ponds…but we wouldn’t do that in the desert anyway.