# Potential Property - Take 2



## evilamc (Sep 22, 2011)

Looks like a really nice starter home!

Not sure where you're getting your numbers though?



> Asking price on this place is $239,900. Mortage rate, for 10 years, is $995 currently, which is doable, especially if I have a renter.


Do you have a really large down payment or something? Mortgage on 239k for a 10 year loan is $2,411. While you save money doing a 10 or 15 year loan, in interests of keeping payment down you should consider a 30 year loan for the lower monthly payment and then paying extra to principal. That way if a renter situation doesn't work out, you wont drown from the higher monthly payment. Obviously I don't know what your down payment situation is but the 30 year monthly payment would be around $1,130, closer to what you quoted the 10 year payment?


----------



## SummerBliss (Jan 7, 2017)

evilamc said:


> Looks like a really nice starter home!
> 
> Not sure where you're getting your numbers though?
> 
> Do you have a really large down payment or something? Mortgage on 239k for a 10 year loan is $2,411. While you save money doing a 10 or 15 year loan, in interests of keeping payment down you should consider a 30 year loan for the lower monthly payment and then paying extra to principal. That way if a renter situation doesn't work out, you wont drown from the higher monthly payment. Obviously I don't know what your down payment situation is but the 30 year monthly payment would be around $1,130, closer to what you quoted the 10 year payment?


Numbers are from the site listing. There is the chance it'll still vary yet, depending on a few things when we talk more about details after seeing the place, but it's more affordable than a different place I was looking at. And I would be planning to have payments spread out on a longer time period as well, for the reasons you have mentioned.


----------



## SilverMaple (Jun 24, 2017)

If you plan to resell, one bathroom will be a problem. The majority of buyers will want a Master bath and at least one other. How feasible is adding a second bathroom to this home? Also, is there any heat source other than the woodstove? 

It does look like a much nicer property than the fixer-upper. The pole barn could be easily enclosed for a stable, and it looks usable for much less expense than the other.


----------



## SummerBliss (Jan 7, 2017)

SilverMaple said:


> If you plan to resell, one bathroom will be a problem. The majority of buyers will want a Master bath and at least one other. How feasible is adding a second bathroom to this home? Also, is there any heat source other than the woodstove?
> 
> It does look like a much nicer property than the fixer-upper. The pole barn could be easily enclosed for a stable, and it looks usable for much less expense than the other.


I'm not sure about how possible it is to add in another bathroom at this point, but I'll keep that in mind when I go to look at it. 
As for heating, it's actually quite rare that there isn't gas heat as well. Most people just add in wood heat around here for a cheaper way to heat the home, but I believe there is other heat sources. I'll check on that as well when I go to see the property to make sure.


----------



## evilamc (Sep 22, 2011)

SummerBliss said:


> Numbers are from the site listing. There is the chance it'll still vary yet, depending on a few things when we talk more about details after seeing the place, but it's more affordable than a different place I was looking at. And I would be planning to have payments spread out on a longer time period as well, for the reasons you have mentioned.


Ok those numbers were probably including a large down payment then  If you google mortgage calculator, you can run some numbers yourself so you have a better idea of monthly costs.


----------



## horselovinguy (Oct 1, 2013)

All I can say is don't buy more than what you can afford if no leaser comes forth or you will lose it all and destroy your credit.
There is no guarantee that anyone is going to rent this place...
It could stand empty more than full = you footing the monthly bills every single month along with any other monthly must have bill to keep the house insured, safe, and in usable condition.
Just keep that in back of your mind...
_House is yours as are all the bills whether you have a renter or not... :|_
:runninghorse2:...


----------



## cbar (Nov 27, 2015)

It looks like a nice enough property with trees, etc. And around here, streams/creeks are normally a selling feature (especially if they are stocked with fish). So that might be good for re-sell (of course, assuming the house isn't on a flood plain). 

One problem I foresee - the house looks like it is a mobile with an addition?? If you are getting a bank to finance your mortgage that might prove to be difficult if you are looking at purchasing property with a mobile home. So, if after you look at the property and you are genuinely interested, it is VERY important to have that conversation with your bank/mortgage company before you decide to put in an offer. 

I'm also not sure how easy/expensive it is to insure a mobile home so might be worth chatting with your insurance company as well. 

I know we ran into some 'issues' with our insurance company when we bought our house and it was just b/c of the plumbing. They can be real dill-holes to deal with if you have glass patio doors, skylights, wood burners, etc. It would suck to get excited about a property and then find out you can't easily get it insured and/or the insurance rates are through the roof.


----------



## SilverMaple (Jun 24, 2017)

Yes, I agree. Visit with your lender about whether a mobile home such as this can be financed, and what insurance may run. I know in our area, mobile homes are so looked-down-upon (largely for safety concerns with weather) you will have a hard time selling or renting one. Financing one is also very difficult as in our state at least, a standard mortgage cannot be done on a mobile home.


----------



## SummerBliss (Jan 7, 2017)

So, as it turns out, that property was sold in the few days leading up to me seeing it. So I went and looked at a different property instead. 

The one I looked at was 2.67 acres with some spots sectioned off for horses. However, it hasn't been used for a while and the fencing, along with out buildings, looked like they were ready to fall down if you even sneezed at them. The home was a trailer with an addition and it was in decent condition. The yard was nice as well and the place was generally move in ready. 
However, it just didn't really call out to me, so I'm going to pass on that one. 



Instead, I now have another new idea thanks to a co-worker of mine. 
There's another property a little farther out of town and is about 5 acres. The thing is though, it's raw land. The people are asking $50,000 and it's being privately sold by the owners. The trees on the land are good though, and would be able to sell a decent amount of it as timber and through that, get money back that'd help pay off the property.

Now, here's where things get interesting. 

Living on Property:
One way of doing this, is to buy a holiday trailer/rv and put it on the property and seal it up to make it winter worthy and live in that. Can use a genirator for power, and would have to haul water, but I've done that in the past before anyways. I'd also be able to get some electric fencing to set up for the horses to be in. There's also some cheap sheds around here that I'd be able to get to store hay in, or even get a c-can to store stuff in. 

Doing things this way would be more affordable and it'd honestly still be a step up from where I'm living now. As I'm in a cabin that's about 12x16 roughly, has no stove, no bathroom, no hot water. So living in an holiday trailer would be a step up as then I'd have a kitchen, a bathroom, and hot water. Maybe a tad less space, but I'm already used to living in a small space anyways so that doesn't really faze me. 

Also, by doing this, I'd be able to start building things on the property over the next few years and if I ever want to sell it, I'd be able to sell it for more than what I'd bought it for since it'd be worth more. 
My co-worker lives off grid and started things this way and is able to show me how to get things for great deals and make sure everything works out. So this is something I'm considering now. 

And while there won't be pasture for a little while, I have enough hay for the horses anyways so even if they can't graze enough, they'll still have plenty of food. And there's no creek along this property either. 
This is also one of the last options I have around here since I live in such a small town, and won't be leaving for a little while yet. And if I have to pay rent or such, I'd like it to go towards my own land instead of having the money just disappear and see nothing for it (other than a roof over my head). So ya, this is the idea I currently have and am looking into to find out more about it and if it's something I really want to go for.


----------



## Acadianartist (Apr 21, 2015)

I don't know about your area, but where I live, building is far more expensive than buying something already built. So a raw piece of land for 50K wouldn't appeal to me -- but maybe things are different where you live. We just built a 24 x 48" barn with equipment bay for about 70K and it's not exactly luxurious (but I love it). If I had to build the house we're living in, I'd be looking at a 400K expense easily. We only paid 200K. Materials are just so much more expensive now. 

Of course, it's possible to do it cheaper, and it's good that you're ok with small spaces and just the bare necessities. Also good that you know someone who is actually doing this (I assume they have spent at least one winter there successfully). But since it appears you want to do this as an investment, keep in mind that whatever you build has to have good resale value. 

And then there are the horses - where will you store your hay? I have 3 easy keeper horses and I have to buy 400 bales. That does not fit in a shed. I need quite a lot of space for that much hay. Will you put up a shelter? What about running water and electricity? Hauling water daily for horses is not feasible, especially in winter where it will keep freezing over and you'll have to keep getting fresh water several times a day. So at the very least, you will have to get a well dug, and have electricity to get the water out of it. Maybe you can live off-grid, but how will you provide your horses with water and how will you power an electric fence? Just things to think about... 

If I were you, I'd continue to search for a small house on a a decent sized property with some kind of outbuilding that can be used as a shelter or barn. Live there a few years and improve it as much as you can without making huge investments. My first house was purchased for just 66K and resold for 104K. That gave us a 40K down payment for our next house (which also had a lot more land). I spent countless hours tearing down ugly wallpaper, ripping out carpets and replacing them with laminate flooring (cheaper than real wood, but still looks nice), repainting every room, adding a deck and steps to each entry, finishing closets, planting bushes and flowers out front... we improved it tremendously so that even in an area where real estate was very cheap, we were still able to make a good profit with minimal investment, just a lot of blood and sweat. Of course, I didn't have horses then. 

I'd keep looking...


----------



## Acadianartist (Apr 21, 2015)

Oh, and the idea of selling the trees on a 5 acre property to help pay for it might also be something you want to look into further. We own a 185 acre woodlot which was sold to us very cheaply (30K) because the owner could not make money selling the wood off it. In fact, he left a bunch of cut hemlock there to rot (we tried to salvage it for our own use but it was too far gone). I hate to be the bearer of bad news, but large forestry companies get hugely subsidized by our government, which means that small woodlot owners get almost nothing for their wood. It's driving most of them out of business (luckily, we just bough the property for recreational purposes so we don't care). By the time you invest in the machinery to cut and haul the wood out, and then rip out stumps and roots and clean up the huge amount of debris left behind, you haven't made a cent. So while you may be able to get someone to come cut the trees off the property for you, you are unlikely to make much of a profit and it's very probable that you will still have a big mess to clean up once they're done. Another reason why I'd look for a property that needs a little TLC, and that maybe has an older, smaller house on it. Two bathrooms are nice, as a poster above pointed out, but you can always add a half bath, or just an ensuite to the master bedroom, and you have a pretty cute place to resell if you fix it up nice.


----------



## carshon (Apr 7, 2015)

I live in the states but want to echo what acadianartist said about land with trees on it. I have a friend the purchased property like you described (her land is 7 acres of Walnut trees) she had purchased a house adjoining this land and was told by the buyer that the wood would pay for the cost of clearing the land. That was not even close to being true. Most timber companies did not want to come out to her property for such a small amount of timber and although walnut is a commercially profitable wood her trees were poorer in quality due to over crowding and not being pruned. She has spent the last 10 years paying for small sections at a time to be cleared - she has even tried having local people out to cut trees that need the wood to heat their homes and has found that they leave more of a mess than it is worth (she has to clean up the brush and dispose of it even after they agreed to do that)

Before making an offer on that land - talk to a timber company. Go as far as having a rep visit the property with you (if possible) and really do your home work


----------



## egrogan (Jun 1, 2011)

Ditto @Acadianartist and @carshon- we have about 200 acres managed in "current use" with a forestry plan, and doing the prescribed cutting on an annual basis is basically just a trade of the wood for the labor. We get a great tax benefit by managing the land in agricultural use, so that in itself is the reason to do it. But there's not money from the timber itself. I understand the desire to have a place of your own, I really and truly do, but the inital on-paper costs are so far from reality when you really get into the actually expenditures- taxes, maintenance, improvements- that I'd recommend taking your initial estimate of costs and doubling it, then asking if you could really afford the likely true cost. Don't put yourself in a hole that you'll carry with you for years.


----------



## SilverMaple (Jun 24, 2017)

Agreed. A 5-acre lot won't have enough timber on it for the companies to bother with. A small local sawmill may be interested, but they generally will only clear for the wood (you get the tree removed, but no money) or will pay for the wood but you have to cut and transport it yourself, which can cost more in money and time than you get back.) 

The first thing with an empty lot is to figure out how much money it will take to get power and water to your building site. If you're on city/rural water, what is the cost of a hookup and running line to where you'd build? If you will need a well, is there even enough land there to ensure there is water to tap into? What is the cost of a well? What are your plans if, after drilling, the water isn't good quality or isn't coming up fast enough to be sufficient? 

Now look at electricity and/or gas. How much to get power and gas to your build site? If you're using propane, ask the company for an estimate on how much it will cost you for a tank installation and fillup.


----------



## cbar (Nov 27, 2015)

We also thought of buying bare land, but as AA has mentioned, the cost of building is so expensive that it was just cheaper to wait for an acreage that was already established with a house/shop. Depending on location, the cost alone to run electricity and drill a well (plus septic field) was just too much. 

If you are OK with roughing it, then it might be an option. But, you do have to think of how you would water your horses in the dead of winter with no well and no electricity. And one thing that needs to be in the forefront is re-sale value. 

Every time we have bought a place we always think re-sale value. Who knows what life will throw at you and it's nice to have an idea that if you had to, your property would have a higher probability of selling (and hopefully with a profit).


----------

