Why We Bought a Smaller, More Expensive House

When Mr. ThreeYear and I moved from New Hampshire to North Carolina, we bought a house that was about 1000 square feet smaller. It was also significantly more expensive than the house we sold. So why did we buy a house that was more expensive and smaller? Well, there are a couple of reasons.

Why We Bought a Smaller, More Expensive House www.thethreeyearexperiment.com

It all started a year ago, when we visited Santiago. We stayed in the apartment we own there, which is about 550 square feet in total, with 3 bedrooms and 2 bathrooms (they know how to pack things in in the big cities). Despite its small footprint, we had a wonderful time together. Little ThreeYear really enjoyed being so close to us, and just being able to call out to find us in one of the bedrooms.

When we got back to New Hampshire, we had several talks about selling our house and moving into a smaller condo to speed up our journey to location independence. We looked into several smaller condos at the beach, and I even wrote a post about it.  In the end, we moved to North Carolina and bypassed the condo altogether.

But the seed had been planted. A smaller space was something that we not only could live with, we wanted  to live with.  Continue reading “Why We Bought a Smaller, More Expensive House”

When You’re Considering a 30-Year Mortgage

Recently, long-time reader Sarah asked me about the difference between getting a 15- or a 30-year mortgage. I’ve written before about why I love our 15-year mortgage. We’ve gotten a 15-year mortgage on three properties: our house in New Hampshire, our house in North Carolina, and our apartment in Chile. A 15-year mortgage has helped us build equity, save more each year, and pay less in interest.

When You're Considering a 30-Year Mortgage www.thethreeyearexperiment.com

But what if you live in a high cost-of-living area, and the payment on a 15-year mortgage isn’t feasible? What if you plan to stay there for awhile, and renting doesn’t make a lot of sense? Or what if, for a variety of reasons, you want to buy a house, but you can’t make a 15-year mortgage payment work?

On a back-of-the-napkin calculation, it’s clear to see why many people choose a 15-year mortgage is superior. You pay a lot less in interest. But, you also have a much higher monthly payment (for 15 years). Continue reading “When You’re Considering a 30-Year Mortgage”

Prepping Your House for Sale

Last week, I wrote about how to sell your house in 2 weeks or less. Today, I thought I’d give you a more in-depth post about what you’ll need to do just before you put your house on the market.

Prepping Your House for Sale

As tempting as it is to just throw some pictures on MLS and hope for the best, prepping your home for sale is an integral step to selling it quickly. Do the prep work (or hire people to help you!) and save yourself weeks of uncertainty on the other side.

Analyze

The first thing you’ll need to do is decide what needs to be repaired or changed in order to get your house ready for the market.

Do you need to do any major repairs, like change the roof? Are there any architectural or structural changes you’ll need to make? Is there a wall blocking a beautiful view? Does it make sense to add another half bath?

Major repairs cost money, so you’ll have to figure out if the repairs are worth it (i.e., if they’ll bring you a similar return on the house) and how you’ll pay for them. Continue reading “Prepping Your House for Sale”

Sell Your House in 2 Weeks or Less

In the past eight years, we’ve sold two houses. Both times, we got multiple offers within the first days. Here are my best tips for selling your house in 2 weeks or less.

Sell Your House in 2 Weeks or Less www.thethreeyearexperiment.com

Now, it could be a coincidence or good market timing that we sold our houses so quickly. But, we sold our first house in 2010, at the height of the real estate market implosion, and we got multiple offers. Then, we did it again a few months ago when we sold our house in New Hampshire.

When we put both our houses on the market, there was a process we followed to get them ready for sale.

Get Professional Advice

When we decided to sell our New Hampshire house, the first thing we did was reach out to several local realtors. I made sure they knew we were interviewing realtors, and we’d like to schedule a consultation. Each realtor came in, walked the house, and told me what they thought needed to be fixed. One realtor was so specific about everything that needed to be fixed that it almost paralyzed me into inaction. Another realtor told me everything was fine. The best realtor told me the major issues to fix and paint, gave me cost-effective ways to fix issues, and told me what we could skip on the repair list.

Each realtor also provided a market comparison report, and the price they’d recommend listing the home. More on that in a minute.

Fix the Little Things

After we met with three realtors, we had a list of things we needed to get fixed.

  • broken towel rack in master bathroom
  • broken GFI (electrical) switch behind the washing machine
  • broken towel rack in guest bathroom
  • leaking kitchen sink
  • broken front door handle
  • no light in the shower
  • damaged drywall around the master jacuzzi
  • broken tiles in master shower

We had a similar list for our house in Atlanta. We asked around, and found a reasonably-priced and reliable handyman. I asked him to come over and take a look at everything that needed to be fixed and give me a price. I also asked him to buy any parts that I might need to fix these issues. He recommended an electrician friend of his who came over and fixed several of our electrical issues, and ended up being the best electrician I’ve ever worked with. We also called a plumber to fix the kitchen sink.

This stage of the process took about two weeks. It took awhile for all the repair people to come in and get things fixed, but as they were, we were working on the next step.

halway--www.thethreeyearexperiment.com

We’d also changed out several dated light fixtures last year. This is pretty easy to do, or pretty easy to get an electrician to do, and can help your house look much more modern. We spent about $200 on the whole project, for the lights. Continue reading “Sell Your House in 2 Weeks or Less”

Does Where You Live Affect How Much You Save?

Bankrate recently reported that Americans are saving less, despite low unemployment and rising wages. And it turns out that some regions of the country are not as good at saving. On Wednesday, I wrote about the best places to live in the US. But could where you live impact your ability to reach FI, even subtly? Does where you live really impact how much you can save?

Does Where You Live Affect How Much You Save? www.thethreeyearexperiment.com

How Much Do You Really Need?

We’re talking about emergency savings. The article makes the oft-repeated claim that you should have six months’ savings in an emergency fund. First of all, let’s think about that claim: who makes it, and who stands to profit from it? Keeping a lot of money tied up in a checking or savings account helps banks because they then have more money to lend out (they must have 10% of the money they lend on hand). But do you really need six months of savings? Continue reading “Does Where You Live Affect How Much You Save?”

Our Location Independence: Your Questions Answered

After I posted our news that we’re moving to North Carolina this summer and will officially be location independent, some of you had questions. I thought I’d publish a follow up post to answer those questions and hopefully shed a bit more light on some of the decisions we made.

But first, make sure you read this post that details that plan. It contains a lot of information about where we’ll be and what we’ll be doing!

Okay, on to your questions!

The Numbers

Jalpan from Passive Engineering asks, “My question would be on the numbers. How did you decide your original number  and how did you reach the conviction that you’ll still be okay even though you’ve not hit it?”

Great question, Jalpan. When we first decided the net worth number we wanted to hit, we knew it wasn’t the same as our FI number. In order to be completely financially independent, we’d need to save up more than our double net worth goal. But, we assumed that during location independence we’d either:

  • be working full time or
  • be traveling for a short amount of time, like a year

Continue reading “Our Location Independence: Your Questions Answered”

How Fixing What’s Broken Helps Your Financial Life

This post may contain affiliate links. Please read my disclosure statement on the Start Here page for all the fun details. Thanks for supporting the site!

In the months leading up to putting our house on the market, we spent a lot of time fixing the broken areas in our house. Our kitchen sink had been leaking for months and we finally hired a plumber to install a new faucet. There were two plastered spots in the bathroom where we’d removed a towel rack and we painted over them. For the entire time that we’d lived in the house, we’d had a light fixture in the bathroom that we’d removed, because we were scared it wasn’t water safe, and had put a metallic plate over. We finally got a water safe light installed.

How Fixing What's Broken Helps Your Financial Life www.thethreeyearexperiment.com

These fixes cost money, but not near as much as I thought they would. Once I found a handyman and an electrician who’d fix everything, I think we ended up spending around $350 to: Continue reading “How Fixing What’s Broken Helps Your Financial Life”

Putting On a New Roof

Experts say to set aside about 1% of the purchase price of your home each year on maintenance costs. This year, we set aside a lot more than that.

About a year and a half ago, we noticed that our shingles were curling. Every so often, we’d look at our patio and see bits of asphalt from the shingles littering the concrete. We did some research, and found out that our house had been roofed with a type of shingle that was failing across New England. Many homes in our small town had been shingled with this particular company’s shingle, which, unfortunately, were not holding up in New England’s severe winter weather.

Putting On a New Roof--www.thethreeyearexperiment.com

No problem, we thought. Shingles have 15-year warranties, so we’ll just look into that. Well. Turns out, our shingles did have a warranty, but like many things in life, there were caveats. You should have Proven Roofing of Randolph NJ come and install your roof. The warranty was pro-rated, meaning that if the shingles failed in Year One, they would be completely covered. But if they failed in Year Thirteen, as was the case now, they would only give us a portion of the money we were owed.

  • There was currently a class-action suit in place against the shingle company, so the chance of us receiving any money was slim to none.
  • The warranty was transferrable in the event the house was sold, but it had to be done within one year of the house sale. We received no information or paperwork to this effect when we bought the house, so we had no idea this was the rule (and we didn’t know to ask! Lesson learned!).
  • We were paying for a new roof out-of-pocket. 

    We spent the school year saving up, and had $7000 by the end of the year. We didn’t think it would be quite enough, but hoped it would be close.

    In May, we began getting quotes from roofers in Staten Island, NY. The first quote we got was from a contact we had through our church, Nate. After visiting our house and measuring our roof, Nate sent us an estimate that included:

    • The removal and disposal of old shingles and roofing
    • Installing an ice and water shield (this is necessary in New England roofs because of the freeze/thaw factor during the winter. Icicles form on the edge of the roof and you don’t want that water to get into the wood in your roofing and leak) plus a roofing underlayment above the shield
    • Installing metal in all valleys
    • Installing architectural shingles
      The total was $14,000. 

    This was a lot more money than we had expected to pay! We were pretty disappointed. We had liked Nate and hoped to work with him. But he was charging a fortune!

    Next, we reached out to about five other roofers. Three we found online. I called each online company and of the three, two only installed standing seam (metal) roofs and one was booked until 2018.

    Lifter--www.thethreeyearexperiment.com
    The lifter set up to reroof our house.

    After that, we reached out to our contacts. Mr. ThreeYear had a colleague at work who had used a local roofer for her roof, Jim. We got his phone number and I called him. I think I left about five messages, and he kept calling me back and couldn’t reach me, either. Finally, we connected, and he made a plan to come out and see the roof “next week.” He told me he would call me.

    Meanwhile, we found a third roofer, Jeff, through a friend who made an appointment to come and measure the roof at 10am on a Saturday morning.

    Both roofers missed their appointments. Boy was I annoyed at this point. We couldn’t even find roofers to estimate a job for us!

    Failing shingles--www.thethreeyearexperiment.com
    A detail of our badly failing shingles on the back of the house.

    It turns out that there is a shortage of roofers here in New England. For whatever reason, there’s a dearth of young men (and women) who are willing to work fifteen-to-eighteen hour days for a few weeks in the summers and fall installing roofs. Hey, I don’t blame them. But because there is such a shortage of qualified roofers, they make a ton of money doing it! It’s an excellent job for a young person with no college experience, or even for someone who’s working their way through college. Well, if you need good roofing services from Roof top services of Central Florida, Inc., https://www.rooftopservices.com/ is the right choice!

    Back to the story. Finally, I got in touch with both Jim and Jeff, and we rescheduled our times for them to estimate. I never actually saw Jim. He told me that he had come by the house during the school day when I was at work the following week. After another week of me bugging him for the estimate, we got estimate #2. His estimate included:

    • Removal and disposal of existing shingles
    • Lift rental
    • Removal of siding for new flashing/reattach siding
    • Replacement of ice &water shield
    • Installation of new architect shingles, color black

    The total? $22,500!

    At this point, I was so annoyed, I started calling everyone I could think of and asking them if these prices sounded ridiculous. Where I’m from, in the Southeastern US, new roofs cost more like $8000-$10,000. So we were having major sticker shock!

    Roofing the front--www.thethreeyearexperiment.com
    Replacing the front shingles

    I texted a friend of mine, who is also from the South. She flips houses in a neighboring town, so I figured she’d have a handle on roofing costs. She did. “For your house, I’d say you should expect to pay between $12,000 and $18,000 for a new roof” she told me. Because of the higher cost of labor, shorter installation time because of our long winters, the extra ice and water shields needed, and the lack of competition in a small town, roofs were way more expensive to install in Northern New England. Along with getting a new roof I also bought blinds online to help make the house look a little newer. She also told me the second estimate was bogus. “That guy’s smoking crack,” she said, never one to mince words.

    Roofer #3, Jeff, was scheduled to come over that weekend. He was very nice, and apologized for missing the previous appointment. “I never do that,” he explained. “My dad was hospitalized and honestly, everything left my head when I drove down to go be with him.” He came and looked at the roof and spent some time talking to us about the warranty of a roof. He told us it that the shingles he used came with a 30-year warranty that could be transferred to the next owner. He sent us an estimate about a week later. His estimate included:

      • Strip and dispose of existing roofing on all current shingle areas
      • Install Ice and Water Shield to all eaves (6 feet–this was 3 feet higher than other estimates) and valleys (9 feet)
      • Install synthetic roofing underlayment to remainder of roof
      • Install new white aluminum drip edge to all eaves and rakes
    • Install new shingles to all currently shingled areas
    • Complete cleanup and disposal of all debris

    The total for his job was $14,900. 

    I liked Jeff and thought his estimate was good, but in the end, we decided to go with Nate. His estimate was the cheapest and we had a glowing recommendation from a church member (and we knew his future in-laws). Plus, he could get started on the replacement sooner than Jeff could.

    After talking with my friend, I knew Nate’s estimate was in the ballpark, so we told him we were contracting with him. 

    He requested fifty percent payment up front (which were similar to Jeff’s terms) so we sent him a check for $7000! That was not a fun check to write.

    He sent an email about a week later, letting me know he received the check and that he would be delayed, due to rain, on starting our house until the week of July 10th. Mr. ThreeYear would just be getting back from the beach then, and could work from home and oversee the process, so we agreed that Monday, July 10th would be the start date. The kids and I would still be in South Carolina, so we would miss all the fun.

    On Sunday, July 9th, Nate and his crew brought over the lift and the staging, and got it set up all around the house.

    Newly shingled overhang--www.thethreeyearexperiment.com
    A newly shingled-overhang by the garage.

    The next day, Mr. ThreeYear called and told me the guys had shown up at 6:30am. There were two of them that day. The ended up working all day, with very few breaks, until 8:30 at night!

    They told Mr. ThreeYear that since they had such a limited window of time to get work done in the summer, they had to work like crazy to take advantage of the good weather.

    The next day, another roofer joined them, and all three men worked the next couple of days to finish the roof. Mr. Three Year sent me pictures of their progress. He worked from home all week, listening to the banging and hammering. I’m so glad I wasn’t there and he was to oversee everything!

    Back of the house--www.thethreeyearpexperiment.com
    The back of the house, newly shingled.

    He even had to deal with an anonymous neighbor of ours, who called the police TWICE! Apparently, she complained that our roofers had left nails in the road. This was patently untrue–Mr. ThreeYear said they were careful, and he even checked the road–there was nothing. We do have several temperamental neighbors, so I’m not surprised! Mr. ThreeYear calmly talked to the policeman who came out. He even dealt with the fact that the man thought he was a roofer and not the homeowner! Hispanic men deal with a lot of prejudices, let me just say. Luckily Mr. ThreeYear just laughed it off.

    Finally, on Thursday, the roofers finished. We asked them to also power wash the house, so they did. They had a really hard time getting off years of grime from the vinyl siding, but Mr. ThreeYear bought Magic Erasers for them, and that worked. They even removed two defunct satellite dishes from the roof that we no longer used.

    Satellites in my eyes--www.thethreeyearexperiment.com
    The roofers removed our defunct satellite dishes while reroofing the house.

    When we saw the “After” pictures that Mr. ThreeYear sent, we were amazed! The house looked brand new! We wrote Nate a second check for a little more than $7000 (because of the power wash) from our savings account.

    The finished product--www.thethreeyearexperiment.com
    The finished product–Mr. ThreeYear even trimmed the shrubs in front.

    This year, our home maintenance costs were a lot more than 1%. But I’m very glad to have a new roof and a clean house. I’m also glad I was out of state during the project. And we’re more knowledgeable about the process than before. When we sell our house in a couple of years, I hope the new roof will be a draw (Check out TransitionRoofing.com for more information).

    How about you? Have you had any major home improvement projects lately? 

    How to Create Beautiful, Frugal Flower Gardens

    Do you love to garden? Is Spring your favorite time of year, when the flowers start blooming and there’s color bursting out of every bed?

    I absolutely love to create flower gardens. I also know I could spend a small fortune buying plants and shrubs to create the perfect landscape around our house.

    Flowers--www.thethreeyearexperiment.com

    Since our family is on a three year journey to double our net worth and become location independent, it’s not a priority to spend a lot of money on landscaping when we’ll be selling our home soon. But I love to constantly improve our gardens and so, have learned to save lots of money but still create beautiful flower beds.

    Continue reading “How to Create Beautiful, Frugal Flower Gardens”

    DIY Mayhem in May

    This month, the shower arm in our bathroom has broken, it has taken four different light fixture tries to replace the kitchen light above the sink, and our kitchen faucet has sprung a major leak. We’re getting quotes from roofers in the area to replace our roof. Because there’s a dearth of roofers in the area and the cost of labor and materials is so high, our best quote is $14,000. Yes, that is correct. The cost of a used car. One year of private school education. More than a years’ worth of groceries.

    On May 14th, Mother’s Day, it snowed. It rained for fourteen days straight before that. Last week, we got two medical bills for a total of $2,000. We’ve been negotiating a new diagnosis with doctors and the school for our youngest child.

    We’ve also had some awesome things happen this month. Mr. ThreeYear became an American citizen on Friday and my dad came up for a surprise visit. After the rain and snow, we got a week full of 80 degree weather and the flowers are blooming. Everything is green and alive. The school year is winding down–as of Wednesday, we’ll have just four more weeks.

    American Citizen--www.thethreeyearexperiment.com
    We are officially a better nation now that Mr. ThreeYear’s a citizen!

    We’re healthy, have a stable and happy home life, reliable jobs, and money in the bank to cover our expenses. In the grand scheme of things, the problems that have besieged us this month are minor annoyances. Continue reading “DIY Mayhem in May”