Real Estate Investing

Perhaps it’s the impending feeling of loss knowing my oldest daughter graduates from high school next month and will head to college in the Fall.  After that, we’ll only have four more years until the youngest also flies the coop.  The house already feels too big.  Too much to clean.  Too much yard to mow and trim.  Too much stuff.  High utility bills.

I’ve been thinking for some time about moving into a smaller home and a post that appeared in The Digerati Life really gives me reason to continue that thought trend. Living in a Small House: The Pros and Cons of of Downsizing Our House gives me the ammunition to bring the thought tickling my brain to full discussion mode at home.

The biggest pro:

The financials! Our mortgage payment on the smaller place is within a few dollars of the payment on the larger place — the difference is that it’s only a 15-year note as opposed to thirty, and we hope to have it paid off in five years or less. We are also looking forward to lower utility bills and upkeep costs.

But there are also cons.  This one really spoke to me since my mother-in-law also lives with us:

I no longer have a “buffer” — that space we’d like to preserve for ourselves while at home. When the spouse gets annoying (you know yours ticks you off from time to time, too), it’s harder to get away from him. Not only that, our large home had two stories, and the new place has only one floor. So stomping off in a huff loses some of its drama without the stairs.

I need my buffer zone (not that I’d ever stomp off in a huff - ha). Maybe I can find someone to trade homes with in a year or three.

Photo by Visulogic from Flickr Creative Commons.

Last week you read my raves about how wonderful city life is - the opportunities to eat at eclectic restaurants, tour museums, watch free street shows are amazing.  However there is a price for this kind of convenience and the price is housing.  It costs a lot to live in the city.

The suburbs definitely offer a distinct lifestyle as well.  Yards for kids to throw footballs, sidewalks to ride bikes, a neighborhood type community where people have parties dedicated to grilling on the barbecues and swimming pools.  (Okay so I’m painting a rosie picture…).  The suburbs also offer affordability. In DC, you could rent for about $2000 p/month.  In the ‘burbs you can buy your own home for $700 - 1500 p/month (depending on size, location, condition).

Business Week - an online guide ot all business news -outlines the best affordable suburbs in the U.S. for 2009.   Pewaukee, Wisconsin wins,

If you’re not a Wisconsin native, you’ve probably never heard of it. But the city of Pewaukee, Wis., a small Milwaukee suburb overlooking a picturesque sailing and fishing lake of the same name, has award-winning schools, low crime, natural beauty, and homes for every budget. It topped the list of BusinessWeek.com’s 2009 rankings of the “Best Affordable Suburbs.” Pewaukee was selected for Wisconsin in our state-by-state rankings, and scored No. 1 on our nationwide list. 

The site also links to where the most affordable suburb is in each state.  I was very very surprised to find the most affordable suburb in Tennessee to be outside of Memphis.   In Arkansas, I actually lived in Cabot briefly when I was growing up as an Air Force brat.  It’s interesting to click through each state to also see what is defined as “affordable” in that state.  I’m not sure I agree that a home for more than $300,000 is affordable, but I suppose in Virginia it is.

I wonder what Abraham Lincoln would think about today’s log homes.  At the urging of one of my seller who is considering a log home as their next option, I walked inside a model for Southland Log Homes this weekend.  It was on the way back from the Girl Scout cookie depot where our goal is to make people fat and happy while earning troop money.

As I understand it, the log homes come in a “kit” that is priced very affordably.  You’ll have to provide the land on which to build the house, but the company will help you find a builder with the experience and know-how to get the job done right.  When you buy a log home, you do have the ability to get a mortgage loan that will pay up front - allowing for the kit to be sent.  According to the literature from the company, a construction to permanent loan combines financing for the purchase of land, the construction of your log home, and your permanent mortgage into one loan with one closing.

I’ve looked at locations for this particular company and they have sites mostly in the south, southwest, Rocky Mountain states, and the upper Midwest (as opposed to the Plains states).  If you want to find a log home company in your own area, Log Home.com offers a search tool to  locate both a company and a builder.

Home prices will vary depending on the size of the home.  When you pick an existing plan or have a new plan designed, the log home companies will calculate the building materials needed, including log overlay elevations.  Inside a log home are all the standard and upgraded features you’d find in any home - wood flooring, granite counter tops, stainless appliances, walk-in closets, garden tubs, etc.  Your decor can range from wallpaper, paint, elegant, simple.

The biggest surprise for me was affordability.  Homes can range from as low as $100,000 if you build it yourself to several hundred thousand dollars.  They are very comparable to regular site built homes price-wise.

Don’t tell anyone, but they are having a drawing this spring to win a free log home.  I’ve entered and my fingers are crossed.  I could see myself in a log home overlooking a calm lake with a warm breeze caressing my face.  Munching on a box of thin mints or do-si-do’s.

Photos from Southland Log Homes.