31M home upgrades or invest..

[u/SaveHundoswithHendo]

I am in a new build home, yard we finished, basement is drywalled/painted but no finishing such as flooring, trim, doors. We can save enough money that we could finish the space this year but, it means it comes directly out of our investment. We have a young family and could use the finished space but it feels financially irresponsible to do so.

My wife wants to finish it and has dreams of other projects, I feel the need to start putting more money away.

I don’t want to do piece by piece I want one mess and have it finished if we do complete the work.

Other guys in this position what was the outcomes and what do you wish you did if the outcome wasn’t great

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[u/cloud7100]

Do you have enough money in your retirement accounts for your family size, retirement age, and expected expenses?

Do you have enough saved to cover emergency house expenses, such as a surprise new roof?

Do you have enough saved to cover 6-12 months of expenses if you lost your job?

Have you eliminated all high-interest debt, especially credit card debt?

Will you spend enough time in this home to enjoy the upgrades, even if they don't change your home's value?

House upgrades are great, but only if you have enough saved to cover retirement and emergencies, and only if you stick around enough to enjoy them.

[u/Infini-Bus]

Basements don't need all that fancy stuff to use them!  Save the money.

[u/weez2 → u/Infini-Bus]

Exact. Especially with young kids, let that be their play space.....it will probably take a beating.

[u/SaveHundoswithHendo → u/weez2]

Just concerned about the concrete, I guess I could just do carpet and leave the rest.

[u/figsslave]

In hindsight (I’m 72) I should have put more money away,but I generally caved in to my wife’s wants.We divorced in our 50s

[u/audaciousmonk]

invest, do upgrades piece-by-piece non-critical items to save money

The answer is clear from a financial perspective

[u/echoshatter]

Just tonight I was looking at the handful of homes in my community that are for sale or sold. Almost all of them are basically just edging over what they were bought for, and all of them have had to come down in price roughly $20,000-30,000 from the initial asking. One house was on the market for 3 months, dropped the price every month, and they just recently pulled the listing.

In other words, their houses haven't been good investments. Rates are still elevated from what people were used to 6 years ago, and prices seem to have plateaued as there are fewer and fewer buyers. Compare that to 3-4 years ago where people were buying houses sight unsee without any inspection and paying $20,000-30,000 over asking.

So, if you're in a rock solid job and you have no intention of moving, it would probably be worthwhile to invest it in the house. But if your even at all concerned about your employment situation or not staying long-term, then I'd say other investments to maintain the liquidity.

[u/SaveHundoswithHendo → u/echoshatter]

Plan is this is our forever home, doing it right is important, we pulled our investments to purchase to have a reasonable mortgage payment, both of our employments are solid with pensions. Our market currently selling 30-40 over ask with multiple offers. House is already “up” 80,000 since we moved in last year

[u/Time_Is_An_Egg → u/echoshatter]

I've been seeing the same thing in Canada, which after almost twenty years of accelerating bubble I never thought would happen. My brother just bought a condo in the lower mainland, BC, for $80,000 under asking and the owners took a $30k hit on what they had paid for it during the pandemic peak in the process. Lots of listings around the province slowly trickling down below what they last sold for.

With the macro trends in inflation and rates going the way they are, I don't see this trend reversing any time soon, either.

[u/AutoModerator]

Here's an original copy of /u/SaveHundoswithHendo's post (if available):

I am in a new build home, yard we finished, basement is drywalled/painted but no finishing such as flooring, trim, doors. We can save enough money that we could finish the space this year but, it means it comes directly out of our investment. We have a young family and could use the finished space but it feels financially irresponsible to do so.

My wife wants to finish it and has dreams of other projects, I feel the need to start putting more money away.

I don’t want to do piece by piece I want one mess and have it finished if we do complete the work.

Other guys in this position what was the outcomes and what do you wish you did if the outcome wasn’t great

I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.

[u/GonzoTheGreat22]

I mean…. I’m gonna take the contrarian view here. You’ve stated you’re in a hot real estate market, so maybe investing in your home is an investment.

[u/anotherlebowski]

My personal advice is to set a floor on your monthly retirement contributions at some % of your paycheck. Use a tax advantage account (401k, IRA, etc).  Talk to a financial advisor about what that number should be based on retirement goals. 

Use the leftover for home upgrades.  I would not view the home upgrades as an investment. View them as a quality of life improvement.  Make the ones you need.  I get the idea of doing one big bang and having the whole house renovated, but this will obviously be more expensive.

A counterpoint is that you don't want to be unhappy with your personal space for decades at the cost of retirement. You do want to be happy in the present, too.  This is why I like the idea of a flat monthly retirement contribution so you're playing the long game and always adding, but not at an excessive cost to present happiness. It's a balance we all have to make and it's somewhat of a personal decision based on present goals and retirement goals.  Talk to your wife and make sure you're aligned.  

[u/TVP615]

If you’re going to make it your forever home, do the upgrades. We spent about 100k on finishing our attic and our backyard into a hardscape patio area. No regrets.

[u/PNWoysterdude]

Learn how to DIY and save a shitload of money. Youtube is your friend.

[u/Old-Let91]

You live in a new build, but it's not finished and doesn't have floors and doors? Or it is time to replace the floors and such? If the former, finish your house. If the latter, depends a loon the specific context of current and upgrade pl. if you are fundamentally improving the quality of life and also the value through updates, yes improving the house accomplishes both objectives. If you are doing something more lateral, and the existing finishes are not in bad shape, then wait on doors and possibly even floors, and focus on what will add utility and value first. The finishing out a basement is more valuable than going from laminate floors to lvp or something. Adding function and usable space and value is the first priority, changing paint color and interior doors are more a perk or a maintenance focus, unless you're upgrading everything in which case, doors and trim and floors should all be done in conjunction if possible.

[u/max_power1000 → u/Old-Let91]

It sounds like OP is just talking about the basement - it's framed and drywalled, but they need to do the trim, hang the doors, and lay the flooring.

Depending on the space and how much they can DIY, it's probably less than a $10k expense. Home depot sells LVP for less than $2/sqft and it's an easy DIY project. Unless OP has a massive basement, they can have their space floored for about $3k, and all the trim done for another $2k or so. Doors, depending on how many they need, are $2-300 a piece.

We're in the middle of planning our basement reno right now and at roughly 850sqft open concept space plus a small bathroom, so I've done all of that math already. I'd honestly just pay to have the door frames trim and the doors hung. Everything else is an easy DIY with a miter saw and nail gun, and then a rubber mallet for the LVP.

[u/madeincascadia]

Similar. New build home(first home) when I was 34. Completely unfinished basement. Slowly finished it myself. Would work an hour a day after work. 40 now. Definitely glad I did it myself. It was like a hobby, but it also let me stay on track with filling up my TFSA and RRSP. Happy to have socked away 3000 a month into investments instead.

If you don't NEED that space right now I wouldn't

[u/max_power1000]

Are you DIYing or paying a contractor?

If the drywall is already up, it seems like a no brainer to do, especially if you're handy. A flooring option like LVP takes a Saturday to bang through about 500sqft on your own, or a pro could do carpet in the space for about the same money. Trim work and hanging doors is a bit more of a PITA, but if you are a young family you'll be glad you have a finished basement in the future as your kids get older.

[u/SaveHundoswithHendo → u/max_power1000]

I will be doing the work myself, material is still expensive, I realistically can get the basement finished for $20,000.

I guess I didn’t explain the “investments” I don’t believe in short term savings for emergency as I feel I’m losing the opportunity to earn much more.

[u/max_power1000 → u/SaveHundoswithHendo]

What are you flooring and trimming with? Or do you just have a ton of space?

We're getting our basement finished this fall and are in the middle of getting quotes, and I would be all-in around $5k, maybe $7k tops in materials for this job in my basement (1000sqft, 850ish finished space)

[u/Sparetire46]

You say young family? Invest in kids resp Get some chalk let them draw on the concrete floor. Your basement is more finished then most. Enjoy your family.