1850's cedar pier and beam Hill Country house is still going strong. Only time it's ever been structurally worked on was when we re-jacked and braced underneath it once about 8 years ago. Building stuff out of wood down there in the swamps won't work long-term.
My father (not an expert) always told me never to buy a house with a pier foundation, with the exception of it being in a desert climate. He had way too many issues with mold in some of his houses. Said something about it's not the concept that's awful, it's the execution on nearly all of the houses built.
That's why the land better be worth something if you're buying a house. The house will fall apart, the land is the asset. Tell him @Buck Turgidson Oh, and here's a neat video on Japan
Wha... Property always has value based on comparable prices. Houses don't just 'fall apart' and the bulk of the value of a property is the home. I can buy a vacant lot (with utilities) for 10-20% of the value of the lot with a home on it. Buying a home just for the land value alone is just...I can't even wrap my head around that.
I'm never said homes don't have value, and that the bulk of the value in a property isn't the home, and that a home should be purchased for land value alone, my point is that houses depreciate, the land is what appreciates. Houses certainly do just fall apart without excellent homeowners who have the knowledge and money to properly take care of their homes, and that simply isn't the average person in my experience.
Houses appreciate in value and you don't need to be some sort of expert to replace your roof, take care of leaks, etc. The housing market has only depreciated in value one time, ever. Are we talking about the USA market here or some other country?
Naw. It’s the land that appreciates in value mayne. Houses depreciate. You don’t need an expert but you need competent people who have the money to fix and replace things when necessary, again not the average person. Way too many roofs are ****ed, people far too often don’t fix leaks properly. Yes we are talking about the US. I think we’ve both repeated ourselves at this point. I ain’t listening to you, and you ain’t listening to me. What else can be said playa.
depends where you are and how old the house is. its actually very common. lots of people buy old houses on nice, big lots and immediately tear the house down and build something new. thats been happening all over the east side of austin for the better part of 20 years now. even in "nicer" neighborhoods like clarksville and allandale...really cool 1950's era ranch houses get torn down and replaced with modern mcmansions. i live in a 50 year old house in south cental austin and the land is worth at least twice as much as the structure.
Most homes in Texas are built on slabs due to the soil conditions here. Easy to pour. Less maintenance. Pier & beams are sometimes the preferred aesthetic. In areas where it can flood, they allow clearance for water, but you can also build elevated slab foundations and accomplish the same thing (for more money). They can also allow for extra storage space. When you have a slab foundation problem in Texas, you use underpinnings (pilings or piers) to stabilize it. It's fairly simple, but not exactly cheap. With a pier & beam, when you have structural issues, you'll have to use adjustable steel posts (and sometimes, in addition to that, underpinnings). So if a column that supports the foundation becomes unstable, you can fix it affordably. Usually cheaper than underpinning a comparable slab home. The issue is - if that wood DOES rot - now you're looking at woordwork in ADDITION to foundation repairs. That means 2 different companies. Unlike foundation repair, woodwork is more art than science. It's pricey and difficult to do (depending on how much clearance is under the home). @ThatBoyNick mentioned mold. This can be true. And NOT ONLY that. Bugs, rodents, etc... and as that warm air rises, the smells under the home get pulled into the house. So you'll be breathing and smelling that crap as it circulates up and out of the house. To prevent this, you have to encapsulate the foundation with vapor barriers, circulate the air down there with a dehumidifier, and add drainage to keep water out. You're talking 15k easy for this service, maybe 30k. Not many companies in Texas even do it, because we don't have a lot of pier and beams here, and when we do have them, they're often lower income homes with very little vertical clearance to actually do this type of work. In other states it's very common. Nothing wrong with a pier and beam though. I wouldn't NOT buy or build a pier & beam home. But it does open you up to some unique issues. With new homes, you wont see structural issues for at least 10 years if it's decently built. However, issues with smells/mold/humidity inside the home from hot air rising, that actually can be common in new pier and beam builds. People that build new pier & beam homes in states where it's more common will often encapsulate right from the get-go.
Houses appreciate in value too, if properly maintained. Not just the land. The reason? It's 3-8% more expensive every year to construct a new home, so existing home values get dragged up too.
Yep, this happens in every large city. It doesn't mean it's a sound financial decision. The houses they buy are still worth more than they were five years ago. They just decide to buy the home, demolish it and build something newer and nicer. It might pan out long term but it doesn't mean this property didn't appreciate in value as-is. I'm not trying to start an argument. I am a real estate investor, and I have mentors who are worth 7, 8, 9 and even 10 figures. This is what these experts have taught me and it works. If a house is in disrepair you can still buy it, put in repairs a small fraction of the cost of a 'new' house and have significant increases in the value of the property. It takes a ****-ton of neglect and damage to total a house.
I have been watching a lot of Reno shows and they will tear down everything except the frame, when is better to just tear everything down and start over? Was watching something last night and they tore everything down except the frame walls and lifted it up to do a whole new foundation, how much was the framing still worth as opposed to starting fresh, it was about an 800 square feet house.
They manufacture issues and I'm sure the shows subsidize all of that extra reno. "Lets blow out that wall!" And I don't know why the hell they would put in a new foundation unless it was mandated by FEMA. Pier and beam repair is pretty cheap and so is slab leveling. I've never torn everything down to the frame. Paint, flooring, granite countertops, maybe new tilework (there are ways to 'paint' tile), new plumbing fixtures, new light fixtures, some nice landscaping, usually a new HVAC (that's one of the ways I find houses cheap, everyday people are afraid to spend on HVAC). I usually double my investment in equity when I'm done. So if I put 20k in I am up 40k in value and I have passive income via rent. And I rent right away, best product at best price. I sell within 5 years before everything starts breaking down. There's even a way to roll the profit from that sale into the next property without paying capital gains (you just defer until you die and it goes away). That's why slumlords like Trump don't want to show their taxes, because they don't pay any due to tax loopholes and property depreciation (on paper). Btw, I have my eye on this one. https://www.har.com/homedetail/208-e-magnolia-st-friendswood-tx-77546/2599845 There's no way this sells at list. If I can get it for 80-100k, I will fix up both houses and the garage for under 75k in reno costs, have two rentals and a property value of around 250k.
Neither am I broski, we can relax and have a conversation if your interested... if you aren't interested in engaging that's also totally cool. I think we just have a disagreement, and yes I am potentially disagreeing with you and your 10 figures mentors, and I apologize for the hostility of that action. Let's make sure we even have a disagreement here because your response about flipping a home confuses me a bit. Do I understand you correctly in saying that, in a hypothetical part of America that is growing, you would believe the physical structure (of an averagely cared for home) generally appreciates, and you would believe the physical structure of that home would generally appreciate more than the land on which it is on?
Maybe I wasn't clear of my point because these responses aren't making sense to me. Maintenance is a cost that you must subtract from any appreciation from the increased cost of materials and labor, not something that is isolated and separated. ?? I never implied that land is always more valuable than a home? I said the land is what appreciates, and the physical structure of the house doesn't. Which I why I said, if someone makes an investment in a home, knowing that the physical house is going to have a shelf life, the land better be worth something - aka be in the right ****ing place.
Just wanted to add that mentioning my mentors wasn't me peacocking, it's showing that I have access to expert and experienced opinions of successful people in the business space. If someone is an expert, I take their opinion at a high value unless I see otherwise. Random Joe gets neutral credibility and proven idiots get negative credibility. I still listen to everyone, but I juxtapose that with their expertise or lack thereof. If Warren Buffet says 'buy this stock' everyone rushes to buy it. If Jim Carrey says 'buy this stock' most people are going to think it's a joke, but it might be worth a 2 minute Google search. Developed property is worth more than undeveloped 99.9% of the time, that .01% being the cost of completely demolishing the property costing more than running new utilities on a piece of empty land. This means a house or apartments or strip mall or whatever is a multiplier of the basic land value. They both appreciate together. Buying a house and thinking the value of the property will outpace the actual structure isn't a smart investment. The chances of a downtown blowing up around the house like in the movie Up are pretty slim and still take a while to develop. In the meantime, you are paying taxes and not making a dime on the property. Even the equity is 'dead'; you aren't using it. At the very best you might be able get a HELOC on it and claim it as liquid when you are investing.
Ok so I can see we aren't exactly talking about the same things as I was expecting. I have never made a claim on anything related to these assertions, and I'm not even sure what kind of hypotheticals you are framing this with in relation to my post. But to be clear, I don't think between two identical pieces of land, one having a house and the other not, that the one without the home would be more valuable. That's a given and I was at no point and time contesting anything close to this idea. This is where I would disagree. Not to a home adding value, of course I agree to that, but to them appreciating together. The land appreciates, the physical structure generally does not. This does NOT mean that I'm saying that the physical structure instantly has zero value, it's entirely possible for the physical structure to be a hundred times more valuable than the land WHILE it depreciates and the land appreciates. I didn't make this assertion, but my take is that it's entirely dependent on the individual property on whether that would be possible or not in one's lifetime. Generally, the land value will outplace all physical structures given enough time, for example, a stick-built house will generally give out within 100 years and you will have to essentially rebuild a new house within this time, but a bomb pyramid or castle could stay valuable for thousands of years lol. All that being said, this whole point is completely separate and irrelevant to topic of whether or not the physical structure of a house appreciates. I think you are again referencing a point I never made on this bit asserting that land generally won't out value a building within a relevant period of time, not an argument I have made, and a question that would be totally dependent on a myriad of factors.
The foundation was ****ed missing and loose floor joints and it was on cinder blocks, it was a very old house. That was the reason they lifted the house, the plot was the real value on a lake. I am currently looking for a house for a friend in the Houston area will pm you.
LoL at @Xerobull saying he's not trying to start an argument and immediately jumping into High Velocity Aerial Combat (HVAC).
