Just the other day we stopped and visited a friend of ours in Montara. While we were at her very charming house, she pointed out and we noticed dry rot plus termite damage on the front of the porch. We recommended a pest inspection to determine the extent of the damage. It really looked pretty extensive to us therefore we felt a professional estimate to repair the damage was needed.
We offered to attend the inspection and facilitated the scheduling. The report came back at a fairly large dollar amount. Our friend was close to fainting. Being a very intelligent person she had quite a number of questions on how she should handle this.
When you don’t have a lot of disposable funds, what do you do? She wondered if she should simply ignore the problem. She struggled with the cost of repairs coming out of her retirement fund. That was a thought that caused major distress. She asked us what we recommended. How could we help her brainstorm this situation.
So here are the questions that became food for thought and the basis for a decision on how to handle major maintenance needed on her home.
Should she get a second or third opinion and get additional inspections? What were her choices for funding repairs? She could get a home equity line, or refinance the house. She could sell the house but could it be sold as is? Would there be any implications? She could tap into her retirement fund! And, if she didn’t do the repairs now, how long could she wait to do them, when would the house fall down? Would not doing them at all affect selling in the future?
It seemed to us that now was the time to call several contractors and get bids on the cost of the repairs. The first step was to determine how much money she would need to come up with. Neither contractors or inspectors can give a timeline for the structural integrity of the house. They will be able to evaluate which areas have deteriorated beyond their serviceable life and need to be replaced now. The decision became one of protecting her most valuable asset. If she didn’t do any repairs now, the deferred maintenance would get worse. If she never did the repairs, the day she decided to sell, she would have greatly reduced the value of this asset by making into a fixer upper.
Our recommendation was to do the work now because the cost of repairs and raw materials will only get higher in the future. She still wondered how to cover the cost of the repairs. Where should she get the funds. We asked her to review the percentage she would pay by getting any type of loan and balance that against taking the money from her retirement funds. Since she wasn’t ready to retire today and sell the house, she had time to enjoy the benefit of making repairs. The bottom line for her was to protect the investment in her home by doing the repairs today, when she would get the most financial and personal value for her dollars spent.