everyone wants a resilient home, so why not two?

6 posts / 0 new
Last post
jeantheau's picture
jeantheau
Status: Member (Offline)
Joined: Feb 1 2009
Posts: 10
everyone wants a resilient home, so why not two?

I've been following CM's work since the original Crash Course but have mostly just been lurking on the PP boards over the years. Now, though, I have an issue that intersects resilience, finance, and time/stress management that I think is relevant here. I've been wrestling with it for most of the last decade, and at this point, I could really use some objective input.

This is a long post, so here's the bottom line up front:  Through a twisty series of circumstances, I ended up building two resilient properties. I still own them both, but I am having a difficult time seeing how I can keep both going long-term. I'm not even sure that should be a goal. And now, the rest of the story....

In 2005, after voraciously consuming information from the likes of Michael Ruppert and Richard Heinberg, I vamoosed from the D.C. area and landed in Berea, KY. I chose here because of Berea College's sustainable ag program and because there is a contingent of hands-on, back-to-the-land types living in the surrounding counties. In 2006, I built a fairly traditional 3BR/2BA house on 4.3 acres. I used top-quality construction techniques and materials to ensure low future maintenance costs. I added 5.4kW of grid-tied, tracking PV with battery backup; solar hot water; passive solar; ground-connected heat pump; security features; 12K gallons of water catchment with distributed pumping systems; a small greenhouse; and garden beds out the wazoo, all organically managed. Great, right? Yes and no.

In 2010, my relationship blew up. My ex eventually agreed to a cash buyout, leaving me with the house/property but also with a fair amount of new debt. Then a year later, it looked like I would lose most of my contract work, and it seemed clear that I would not be able to keep the house long-term. At that time (2011), I had already started adding a 2BR apartment/bunkhouse to the barn/workshop building I had constructed in 2007. The original idea of the bunkhouse was to create a space for farm help, but I shifted gears and finished the apartment in a way that suited my own living needs, with the idea that I would live on that half of the (now subdivided) property and sell the house. I made the apartment/workshop essentially a half-sized version of the house and its features, so I would be fine with just that piece, and I could sell the house to make my finances balance. Well, the house did not sell at the (high) price I was asking. Then the contract work revived and the cash-flow crisis was averted, so I took the house off the market.

I'm still working plenty now, but even assuming the job is safe, I'm 60. I figure I'll work another five, maybe even ten years. But at some point, I will retire, and my annual income will drop by 75% (because most of my retirement money went into building all this). The math says that maintaining both properties will likely cause a post-retirement cash-flow issue. All systems have life spans, and entropy does not stop, no matter how well something is built. Inevitably, some systems on both properties will need repair/replacement.

The two properties are contiguous and were originally designed as an integrated operation, though they are now separate and independently salable.  I have a fair amount of "drama and trauma" psychology associated with the house, so I've been living in the apartment, and some friends are staying in the house and pitching in on chores. That's helpful for getting the gardens tended, but it covers none of my out-of-pocket costs (taxes, insurance, repairs, etc.), and management of the process adds stress to my already busy life. I previously also tried renting out the apartment while living in the house, but that math wasn't much different than what I'm doing now.

So, you see, I have grandly overachieved and now have more awesome infrastructure than I personally need or can comfortably maintain. Worse, over the 13 years it took to create all this great collapse-resistant infrastructure, I have exhausted myself and degraded my health.

While there are problems with keeping the house, there are problems with selling it, too: (a) The housing market is tanking. Getting it on the market this spring would already be late to the game, but clearly better than waiting. However, the thought of all the things that must be done in such a short period of time sends me into a state of high anxiety (and not the funny Mel Brooks kind).  (b) I could just not worry about the market timing and plan to sell in spring 2020. That would allow me to work towards the sale at a more comfortable pace, but by then the housing market may have totally crashed. (c) Even using the best timing, I will not get anything like the amount of money I've put into the house and its systems. The average home buyer does not place much value on resilient/sustainable features (and, even more troublesome, neither do appraisers).

By selling, I would generate some cash, reduce my exposure to future life-cycle costs, and make my task load more manageable, finally allowing me to decompress a bit. It's also arguable that having a neighbor who is energetically engaged in resilient practices -- and invested as the property owner -- would strengthen my own resilience position, not weaken it.

On the other hand, it's hard to invest a "big new pile of cash" wisely and quickly, and I might see a lot of that pile go up in a puff of inflationary smoke. Who knows what collapse scenario(s) TPTB are really cooking up -- they turn out to be a lot more clever than I gave them credit for a decade ago, so I hesitate to predict. In a bad enough collapse, one would clearly want a resilient property -- even an extra one -- instead of a pile of ever-devaluing cash. Of course, back in 2008, I thought "surely this is the end!" ... but it wasn't. Here we are a decade later, still proclaiming that the end must certainly be near. Maybe. Probably.

So, a show of hands, please -- who thinks I should sell the house to avoid future life cycle costs and allow me to refocus on my core needs?

And who who thinks I should keep the house (in addition to the workshop/apartment property where I'm living), thinking that the extra capability is worth the future financial stress and the extra day-to-day hassles?

And who is now ready for a cold one??!!

Mark

thc0655's picture
thc0655
Status: Diamond Member (Offline)
Joined: Apr 27 2010
Posts: 1742
Sell

Phew! I got tired just trying to imagine being in your situation.  I'm not you, but if it were me I think I'd sell mainly in order to reduce the complexity and unknowns in your life, reduce your stress, and increase your focus (on what's left).

"Welcome to the Hunger Games. And may the odds be ever in your favor."

sand_puppy's picture
sand_puppy
Status: Diamond Member (Online)
Joined: Apr 13 2011
Posts: 2066
Two houses in Berea, KY

That one is tough!  Divorce is really hard on net worth and future plans as many of us have demonstrated.

Is there much of a rental market in your area?  Would renting out your main house meet a high percentage of your cash flow needs?

You need a PP member to buy that house from you and become a neighbor.  :-) 

Google maps says Berea, KY is on the border of a large public forest, The Daniel Boone National Forest.  What a great location to ride out a collapse.

cmartenson's picture
cmartenson
Status: Diamond Member (Offline)
Joined: Jun 7 2007
Posts: 6026
On keeping/selling resilient housing

So, a show of hands, please -- who thinks I should sell the house to avoid future life cycle costs and allow me to refocus on my core needs?

With the information given I would raise my hand and tell you to sell.  We're missing some information, but here's what we know:

  • You are stressed by the management and upkeep of the property
  • You are stressed by the thought of managing and maintaining the property in the future
  • The amount of property is more than you need, and therefore more than you want
  • You have a second property next to the larger one and that's sufficient for you

Given all that, and it's perfectly understandable, I would personally be seekign the very best neighbor I could find to come and buy that main property from me.  With the right person or family, you could turn a cash and energy drain into a big positive.

The missing information is that your post is devoid of any sense of community.  Is Berea still the right place for you?  Are you building a network of people around you that you enjoy?  

Do you have other family to consider that might move in with you in a pinch if they needed to?  Do you imagine being single forever?

What proportion of your overall assets are locked up in this real estate holding?  Can you rent it out for a positive cash flow while you resolve some of these questions?

But mostly, it sounds like you need a break and are seeking to minimize the energy drains in your life, and so there's an even larger question of whether either place remains the right option for you.  As we age, it just makes sense to want to spend less time building and maintaining things/stuff and focus on enjoying life, being of service, and becoming a proper elder.

Finally, I wouldn't worry too much about a sudden loss of purchasing power for dollars.  Not yet.  That's a very big ship that takes a long time to turn, and right now it's not even wobbling slightly in either direction (deflation vs inflation) so we'll all have plenty of time to adjust if/when it makes up its mind.

jeantheau's picture
jeantheau
Status: Member (Offline)
Joined: Feb 1 2009
Posts: 10
second resilient home - money vs. stress vs. intangibles

Hey, thanks for the responses. I'll try to clarify a few questions that were asked...

<< ... sense of community.  Is Berea still the right place for you?  Are you building a network of people around you that you enjoy?  >>

Yes, absolutely. I have multiple clusters of friends and an extended network of acquaintances. In both categories, these folks are good-hearted, honest, hard-working, creative, and committed to engaging in what we might call post-peak living and community building, even without the necessity of having to do so. Berea is still the right place to be. And, as sand_puppy points out, it's at the foothills of the Daniel Boone National Forest -- awesome hiking, which my girlfriend I and do quite a bit. Finally, and most importantly, I know a good local moonshiner! %-P

<< What proportion of your overall assets are locked up in this real estate holding? >>

Across both properties, most of it. I do have some cash and PMs, with the total value being about 65% of my remaining debt. (That's sort of a hedge.) The debt is "family debt," with little pay-back pressure. I DO need to pay it back fully at some point before I retire, but there is no risk of a catastrophic "margin call." While I am still working, I am easily cash-flow positive, even with the cost of maintaining the second property. So, in the "now" scenario, the only problem is the hassle factor.

All of my retirement savings from the 2000's era went into the initial construction. I'm slowly rebuilding a 401K, but my retirement income will mostly just be SS payments. My running of the numbers suggests that I eventually won't be able to keep up with both properties, at least not in a way that keeps them "tight," with all systems fully operational.

There is also the possibility that my current contract work will fall off a cliff. That seems unlikely for now, but it's certainly possible. Since I'm close to Social Security age anyway, that would be the same scenario as me being retired -- just a little sooner, with less built-up cash.

<< Can you rent it out for a positive cash flow while you resolve some of these questions? >>

I have friends staying in the place now, contributing 16 hours per week of their time (total) to help with the upkeep on the gardens -- and with as much garden infrastructure as I have, that's about what it takes. Their contribution doesn't cover any part of taxes, insurance, repairs, and system life-cycle costs.

If you multiply their 16 hours per week times a nominal $15/hr hourly wage, you get an equivalent rental rate of about $1,000/month, which for this area would be quite high. Adding in depreciation would help cover the difference, but "tax math" is a bit tricky, and my experience is that rentals are a lousy business, unless you never spend money to keep the place up (which is why so many rental properties are dumps!). But even if doing it as a formal rental would get me close enough from a financial standpoint, the aggravation/hassle factor would remain.

<< there's an even larger question of whether either place remains the right option for you.  As we age, it just makes sense to want to spend less time building and maintaining things/stuff and focus on enjoying life, being of service, and becoming a proper elder. >>

I have thought about ditching both properties and starting again, but the smaller property is already fairly resilient and suits my future needs fine. So, starting all over would probably not improve my situation much and would certainly light the fuse to the next stress bomb.

The "being of service" question is actually an important but unquantifiable aspect to all this. Is the house a space I need to keep available for good folks who are in transition, building their own places in Berea using low-energy-footprint approaches (as is happening now)? Or do I need to hold the space as a refuge for family members or others close to me in the event of calamity? Probably "no" on the family question -- everyone is reasonably well set. But "maybe" on the friends question. Knowing the real answer is probably "above my pay grade," but the question does weigh on me.

<< mostly, it sounds like you need a break and are seeking to minimize the energy drains in your life  ..... I would personally be seeking the very best neighbor I could find to come and buy that main property from me.  With the right person or family, you could turn a cash and energy drain into a big positive. >>

Yep. That definitely resonates with me. I did put on my own oxygen mask first, but in the whirlwind of the last 10 years, I didn't keep it on, and that has caused problems. Selling, especially quickly, will be fairly un-fun, but if I get a great neighbor out of it, it will be worth the short-term headaches.

Thanks again!

Mark
 

mntnhousepermi's picture
mntnhousepermi
Status: Silver Member (Offline)
Joined: Feb 19 2016
Posts: 183
wait

You are conficted, so wait.  If you put it n the openmarket, who knows who will move in ? Later a best outcome may turn up.

 

SO, maybe a family member or friend may see they want to relocate before 2020.

What you want in household size could change and you could want the space,as hard as it is to believe now. 

Anyways, I think right now you have control over neighbor there and given my experience iwht random neighbors that is worth a whole lot ! More than money.  My regret is that I DIDNT sretch myself with too much debt to buy the property next door when it was on the market a few years ago.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments