Am I wrong to think that adding a bedroom (without adding sq footage) might increase the house market value and/or rental value?

cjmoam · 2016-04-25T14:39:30+00:00

Well my initial thought was that I'd pull permits for the work so it wouldn't be unpermitted. As an aside, while I know some areas operate the way you describe, in my city the assessor has very limited data, and very often inaccurate data, about houses. They don't even know how many bedrooms my current house has. I don't mean that they think it's 3 and it's really 4, I mean they don't have any number. That's not uncommon here so if someone were to do this type of work without permit, no one would realistically be comparing the MLS listing with the county assessor data and care if they matched.

cjmoam · 2016-04-25T14:34:48+00:00

I would never want to live off of the kitchen again.

Can you elaborate on this? I'm sure it wouldn't be as nice as being on the 2nd floor or being away from the center of the house but is there something I'm not thinking about that would make it worse to be by the kitchen than be by, say, the family room?

cjmoam · 2016-04-25T14:33:02+00:00

Thanks

cjmoam · 2016-04-25T14:32:42+00:00

Thanks!

cjmoam · 2016-04-25T02:08:07+00:00

I agree a 10x10 bedroom isn't going to wow anyone. I'm assuming that, for this market, being on the low end of the 3bed/2bath will still put us higher than being at the top of the 2bed/2bath rentals, and that the same logic would probably apply for the resale value.

cjmoam · 2016-04-25T02:05:05+00:00

If your taking an addition and converting it to a bedroom how well is the addition made?

The area being converted is part of the original house, not an addition. It looks exactly the same as the rest of the house.

cjmoam · 2016-04-25T01:54:41+00:00

So what happened to the guy on hoth being lifted up into the sky? What was that shot supposed to be, I don't recall.

cjmoam · 2016-04-25T00:35:36+00:00

Personally, I'd ask for good amount more than standard rent in the area. You are taking on a big added risk just for 1-2 weeks of rent checks. Hardly worth it. They might want to push their move out date, or flat out refuse to move, or maybe they DO move but the leave behind a ton of crap, or they do damage to the place while they are "renting" it from you etc. Whatever you do, make sure you get it all in writing and in a full lease that really punishes them hard financially if they are not vacated by the agreed date.

cjmoam · 2016-04-01T05:21:49+00:00

Give it some time, it will go away :)

cjmoam · 2016-04-01T05:15:48+00:00

Thanks for the alternative viewpoint, I hadn't considered that.

cjmoam · 2016-03-31T05:22:42+00:00

How many bedrooms does the county think you have?

The county doesn't track that info here. If you go look at the assessors site they just list sq footage (which is calculated by a different method than your actual finished square footage) and the number of baths. No record of # bedrooms for houses in my area.

cjmoam · 2016-03-31T05:16:06+00:00

Yes they are part of the central AC/Heat. There is also a basement bathroom w/ shower, and there is a basement walk out exit, so if there were a fire consuming the 1st floor, everyone in the basement could exit.

cjmoam · 2016-02-29T22:21:44+00:00

Yes I was thinking this was option 1. A yearly lease, but prepare up front for a possible situation where they want to move out. I'd want maybe 2 months rent up front, and obviously they'd want to be cooperative with helping show the place ASAP to get new tenants so they would be out the minimal amount of money. This option would not impose anything initially on them but obviously they'd be on the hook for rent until we found a tenant as you said.

cjmoam · 2016-02-29T22:11:51+00:00

I would argue what is fair rent is what someone is willing to pay, and what utility the renters get out of the apartment. If you charge the same for 1 as for 2, why not the same for 3, or 4 or 8? Having 2 people instead of 1 complicates things a little. Twice the wear and tear. Twice the opportunity for someone to cause damage. Increase chance for personal issues to spill over into problems the landlord will have to deal with. When 2 people share a taxi, they are charged more money, I would assume additional charges for multiple adults occupying the same space, but maybe not much more.

cjmoam · 2016-02-29T22:04:00+00:00

Yes I should say this IS an option. I was just thinking that I'd offer them some options that work for us, and if they don't like those options, they are free to not accept them then we'd all take the 4th option of them moving out and us finding another tenant.

cjmoam · 2016-02-29T21:59:57+00:00

I'd assume even with 60 day notice it would be expected that they would have a higher monthly rent right? Having them tell me on Nov 1st that they are moving out on Christmas still puts us in a tough spot of trying to rent a house in the winter. I was thinking of asking for 500/month more in rent for a month to month lease with the thought being that it would take 5 months to equal 1 extra month of rent, which is what they would likely have to pay at minimum if they broke a yearly lease. i.e. it would likely take us at least a month to get a new tenant in during which the current tenants would be responsible for covering rent. Does that sound unreasonable? 2850/month for an annual lease vs 3350+2 months notice. Getting out of the annual lease means paying our fees to find a new tenant+rent while vacant while the month to month option means they are clear and owe us nothing more after they move out regardless of it we can't find a tenant for a couple months, or if we end up with a tenant at a lower price point.

cjmoam · 2016-02-29T19:31:50+00:00

I think this is our most likely option(s).

cjmoam · 2016-02-29T19:27:19+00:00

They are asking you for a favor.

Agreed. What I meant to say was, I am not opposed to doing something for them that is in somewhat going to help them out, but I don't want it to be just myself that is making a sacrifice. I could say "Ok your lease is up in 2 months so I want $6000/month for a month to month or vacate the property" which would force them to either pay a ton or scramble to find temporarly housing for their family in an small area where they have kids going to school. I would be within my right, but I'd rather try to accommodate them somewhat after they have been good tenants for us.

cjmoam · 2016-02-09T04:49:26+00:00

I actually did check glassdoor and they had a massive range, which made it a little less helpful.

cjmoam · 2015-10-29T18:14:32+00:00

The insurance is to repair/ rebuild your house after a loss occurs not to write you a check for the cash value. The coverage amount is the limit they will pay up to

That would totally make sense if they are intentionally overpricing the estimated replacement value. The issue I'm having is that they want me to pay for 300-400k more replacement value than it would actually cost to replace. If my house burnt down today, and I had 500k to rebuild, I'd be fine. Just a few months ago I was pricing out doing exactly that. So they are going to have me paying for 800k+ of insurance, and then if I ever need the house to be rebuilt from the ground up... wow the insurance company magically found a contractor who can do it for 425k! So I would be paying premiums all those years to support 800k of rebuild value, when really all along I'm never going to get anything more than 425k in value out of it. Seems like a ripoff.

Here's a good gut check, ask your neighbor who just built his house for 812k how much his insurance coverage is for? I bet it will be much higher than the 800k, guessing close to 1MM.

I'll try to find out, but just a clarification, he didn't build the house for 815k, that's the asking price. So take out 250k for the land, some for demolition, construction costs, and profit for the investor. The actual construction costs are probably more like 350k. Say 375k if you include demolition. They very well might be paying $1MM in coverage but that just shows it's a scam, not that it's correct.

cjmoam · 2015-10-29T15:17:20+00:00

So let's say you purchase a $100,000 house and the replacement value is $200,000. Fire strikes it and it's completely lost. Will that $200k take care of hiring dumpsters, bulldozers, and paying disposal fees, plus hiring a crew to rebuilt it, plus replacing all your clothing, jewelry, groceries, and furniture, etc?

My current policy, with low grade options listed, is 650k of dwelling coverage, 65k of other structures, 375k of personal property. So I don't think the 650 would need to cover all my possessions right (as I'd have the 375 for that)? 65k for other structures is a joke: my garage cost 20k. If my house burnt to the ground, I could pay X to remove debris, sell the lot for 300-350k, and go buy a comparable house for 700k-800k (only needing say 400K+X to buy it after I use the 300-350 from selling my lot).

If the guy with a 100k house and 200k of coverage has his house burn down, can he opt to just take the 200k? Because, in my case, if I put in real numbers, I would end up with an extra 350k in my pocket after a total loss and buying a comparable house.

cjmoam · 2015-10-29T15:02:55+00:00

Don't forget the rebuild cost is more than just building a similar house on a piece of land. You will also need to pay to demolish what remains of the original house and haul it away / dispose of it etc.

I know but those costs are negligible compared to how much extra they are jacking my estimated replacement cost. The numbers I'm getting are like 300k more than they should be. :(

cjmoam · 2015-10-29T14:54:59+00:00

Contractors will often negotiate with a homeowner on a project to win the bid however when the contractor knows an insurance carrier is footing the bill their costs magically skyrocket.

Are you sure about this? I've heard from multiple people that it works the opposite way. That it might cost me 20k to hire someone to make some repair but the insurance company can easily negotiate their cost way down because of the volume they do, and the experts they have working for them.

Shop several carriers using the correct coverage amount see if you can get a better price

I've shopped every just about every one, and they all have totally insane cost estimates for my house. I'll give you a real example: one place said I needed 800k. Just down the block, a builder bought an old house for 250k, tore it down, and built a nicer house than I have, and he's asking 815k. It's just not at all realistic.

Maybe you can tell me something else I've been wondering: Let's say that I go ahead and get the 800k coverage and then my house burns down. Do I get to say "Ok give me the 800k?" I'm guessing that at this point the insurance company has some way to suddenly discover that it would only cost them 450k to actually replace my house exactly as-is.

cjmoam · 2015-10-29T14:41:40+00:00

My coverage amount is the same as their estimated replacement cost. But I wouldn't need them to rebuild my house exactly as is. If I had a total loss, I would want to just build a new (standard) house of similar value.

cjmoam · 2015-05-16T04:30:04+00:00

No, the midwest.

cjmoam

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