Garage financing options...

[TurboEuro88]

My viewpoint on loans is that they're not always the bad guys people sometimes paint them out to be as long as you're borrowing smart. That means borrowing within your means and with interest rates you're able to manage. You have to be 100% comfortable with that payment to have the garage, making sure it will not cause issues down the line paying bills, contributing to retirement, etc. If you want to cost-conscious, and it would probably be a good idea to do so, try to focus the quoting and financing to as little as what's necessary to get it built to satisfy any requirements of the loan, permits, etc. It helps you get the garage sooner and lowers the debt burden once constructed. As others have pointed out, building a garage won't add value in any significant or dramatic amount. That said, you mentioned the house used to have a garage ages ago. I would not discount the thought that building a new garage is going to improve the value to some degree - just not anywhere close to the total sum invested in building it obviously.

You had mentioned having a father and grandfathers experienced in the trades who've helped you previously and would likely help you again. It may sound silly, but if I was in your position knowing the opportunities to spend that kind of time with them was dwindling, I would be motivated to get construction done sooner than later. Those experiences cannot be replaced and are worth the interest to me at least. You're young enough that you can hustle and make back the money spent on interest by investing some of your retirement or other surplus income into the stock market.

The important takeaway that I think you should consider is that while all the advice you get here is good, you have to decide for yourself what works best in your situation. Everybody's circumstances are a bit different and the advice has to be adapted to what's going on in your life. Personally, if I were in your shoes I would be kicking myself deciding to go 100% cash, only to have construction take 7-10 years to finish because life can and does get in the way of these kinds of things. Do the research, talk to the money people. They'll be able to give you direction and an idea of how much you could borrow and at what interest rates.

Best of luck!

 

[Bluedodge]

...I guess APRs are APRs.. nothing you can do about it. (Besides cash) One could hope that rates drop at some point in the future and then refinance? Not sure if that’s something worth “banking” on, I don’t know enough in the banking/finance world to see where trends are going

Mortgage interest rates are currently at 50 year lows. It is extremely unlikely (impossible?) for them to go lower.

https://www.valuepenguin.com/mortgages/historical-mortgage-rates

 

[cj7jeep81]

I agree with some of the others. If you can get a good rate and are comfortable with the payment, financing isn't evil. I waited a while before building my shop (getting projects done around the house, building equity, etc). I use the garage quite a bit, and every day of use I get out of it now is one I wouldn't have got if I had waited until I could pay all cash. The use of it is worth something. Also, I've been able to do vehicle repairs that I couldn't/wouldn't have done in my gravel driveway, which have also saved money.

Not sure if anyone else pointed this out, but another thing to keep in mind is building won't get any cheaper. If you wait 10 years to build (and lose 10 years of use), you will also almost certainly pay more to build the exact same building in 10 years than you would now. So even though you save on interest, you pay more on the building, making the benefit of waiting even less.

 

[ripperd]

Current use has major value. If you can allocate the payments safely, and get a decent interest rate, I'd do it if you will get enjoyment from it.

We put a deck and screenporch on our house last fall, and used a HELOC to do it. We already have used it a ton, and every time we go outside we pat ourselves on the back for pulling the trigger. I make HELOC payments on a schedule to have it fully paid off in about 9 years, and chip away it it further when we have extra cash.

 

[Rex_A_Lott]

I agree with some of the others. If you can get a good rate and are comfortable with the payment, financing isn't evil. I waited a while before building my shop (getting projects done around the house, building equity, etc). I use the garage quite a bit, and every day of use I get out of it now is one I wouldn't have got if I had waited until I could pay all cash. The use of it is worth something. Also, I've been able to do vehicle repairs that I couldn't/wouldn't have done in my gravel driveway, which have also saved money.

Not sure if anyone else pointed this out, but another thing to keep in mind is building won't get any cheaper. If you wait 10 years to build (and lose 10 years of use), you will also almost certainly pay more to build the exact same building in 10 years than you would now. So even though you save on interest, you pay more on the building, making the benefit of waiting even less.

Preach it brother!
Back in the 90's I was about where you are now, but I thought it was wrong to borrow money for a shop, which was a "want", not "need". When Hugo hit Charleston, the price of lumber here doubled overnight,because two states were rebuilding.Every time there is a natural disaster, the price of building material goes up. The price of concrete is about three times what it was back then, my wages havent increased that much. So I've been saving money, but am not much closer to paying cash than I was back then. If I had it to do over again, I would have borrowed the money and been enjoying that shop all these years, instead of still just dreaming and planning. Good Luck

 

[FredWurlitzer]

I think we're on the same basic page. My general point is that a budget of up to $150/ month isn't going to finance very much unless you stretch the term out a really long time. And then not only do you end up about doubling the cost of the garage, but you're committed to that part of your monthly cash flow ******* forever. He needs to figure out what it's going to cost to get what he wants, whether family does the work or not. And then determine if that works within the budget or not. Maybe the budget gets tweaked, maybe the building plans do, or maybe it gets put on the shelf for another time.

The general process should be: Get quotes to understand the cost of the building -->do the math for what it's going to actually cost after interest, insurance and tax increases, etc--> consider your situation/risk tolerance now and how it might differ going forward (kids, etc)--> and then choose the appropriate course of action.

I'm thinking the planning, development and speaking to someone about finance options will be the next step. (Although I have dreamily been doing that all along in my head) It will also coincide with determining our budget.

My viewpoint on loans is that they're not always the bad guys people sometimes paint them out to be as long as you're borrowing smart. That means borrowing within your means and with interest rates you're able to manage. You have to be 100% comfortable with that payment to have the garage, making sure it will not cause issues down the line paying bills, contributing to retirement, etc. If you want to cost-conscious, and it would probably be a good idea to do so, try to focus the quoting and financing to as little as what's necessary to get it built to satisfy any requirements of the loan, permits, etc. It helps you get the garage sooner and lowers the debt burden once constructed. As others have pointed out, building a garage won't add value in any significant or dramatic amount. That said, you mentioned the house used to have a garage ages ago. I would not discount the thought that building a new garage is going to improve the value to some degree - just not anywhere close to the total sum invested in building it obviously.

You had mentioned having a father and grandfathers experienced in the trades who've helped you previously and would likely help you again. It may sound silly, but if I was in your position knowing the opportunities to spend that kind of time with them was dwindling, I would be motivated to get construction done sooner than later. Those experiences cannot be replaced and are worth the interest to me at least. You're young enough that you can hustle and make back the money spent on interest by investing some of your retirement or other surplus income into the stock market.

The important takeaway that I think you should consider is that while all the advice you get here is good, you have to decide for yourself what works best in your situation. Everybody's circumstances are a bit different and the advice has to be adapted to what's going on in your life. Personally, if I were in your shoes I would be kicking myself deciding to go 100% cash, only to have construction take 7-10 years to finish because life can and does get in the way of these kinds of things. Do the research, talk to the money people. They'll be able to give you direction and an idea of how much you could borrow and at what interest rates.

Best of luck!

Great post and a very valid point.. thanks!

The use of it is worth something. Also, I've been able to do vehicle repairs that I couldn't/wouldn't have done in my gravel driveway, which have also saved money.

Current use has major value. If you can allocate the payments safely, and get a decent interest rate, I'd do it if you will get enjoyment from it.

You're not joking! It's one of the most motivating factors in this. Getting sick of paying for oil changes, asking friends to use their space, storage, etc..


I did stop into the town hall the other day but the inspector/code officer wasn't in. My biggest curiosity is the cost of the foundation, which I'm assuming will be the priciest component. I've recently been researching floating slabs vs. stem wall and slab. This site has, and is, a wealth of information.

 

[mike93lx]

Preach it brother!
Back in the 90's I was about where you are now, but I thought it was wrong to borrow money for a shop, which was a "want", not "need". When Hugo hit Charleston, the price of lumber here doubled overnight,because two states were rebuilding.Every time there is a natural disaster, the price of building material goes up. The price of concrete is about three times what it was back then, my wages havent increased that much. So I've been saving money, but am not much closer to paying cash than I was back then. If I had it to do over again, I would have borrowed the money and been enjoying that shop all these years, instead of still just dreaming and planning. Good Luck

If you didn't manage to save money for it all these years, how would you have paid for the loan?

 

[Rex_A_Lott]

If you didn't manage to save money for it all these years, how would you have paid for the loan?

If I have a loan I pay my bills. If I'm just putting money aside its all to easy to buy another car, or a tool or any number of other "wants" that come along. I'm not as good at saving money as some folks, because I have too many hands in my pockets. (Wife, kids, grandkids, et al.)
My point was, you're chasing a moving target with trying to save to pay cash. The price just keeps going up and up. What would have cost me about $35,000
in 1996 would cost me about $60,000 today.
Whether you're paying interest or paying more later its really a wash. The difference is the amount of time you get to enjoy the building.

 

[scootermcrad]

Just stumbled on this thread, as this is a heavy topic in our household right now. Although a bit older (43), there are lots of other similarities to many of the situations mentioned here.

This is probably one of the most frustrating topics of garage building and for many (including myself) owning a place to build projects and even simply store things that need to be stored is just part of a lifestyle that many of us will die with or because of. I know for me, I'm totally unproductive and even get a little bit depressed without a place to work on the things that are my "therapy" and simply part of who I am. I will sacrifice as needed to achieve the goal of having a shop, luxury or not. It can be done smart.

We live in an old house that's being renovated at a VERY slow rate. We bought the house 7 years ago and we've since had two kids. We would have had the majority of the renovation completed 2 years ago before our first came, but got screwed by a contractor. Now I can't hire someone to finish this part of the renovation and stay within our planned budget, so the project is now 7 years old. It's a NIGHTMARE living in this mess. We manage, but there are days I would rather burn the house down than look at the mess it's created. Thankfully we're getting close, but now we're moving into our planned timeline where we absolutely HAVE to have a shop/garage to work in, which brings me to a point, here. Don't let the construction drag out any longer than you're willing to deal with it, or at least have an escape plan in case it gets to be too much.

I'm planning on building my stick-built shop space on my own. Myself and a handful of friends are going to frame out the shell ourselves (I'm sure the beer and pizza budget will be considerable). I will hire someone to do the foundation/concrete work as well as the roofing because of the 12-12 pitch planned. We are at a point where we are clearing out our debts to consider the long run, but also, we are now willing to make some sacrifices to get this garage/shop built in parallel. I literally have no place for my tools or to work because the existing garage is simply too small. Probably building something around 28x32 with a loft.

Further back on point, financing is something we're starting to look at ourselves, because it's actually impeding our ability to do the work on the house, our hobbies we enjoy, or to even run a side business (which is on the table at the moment. We always have backup plans). One thing we are considering is simply selling stuff and taking on more side-hustle work. If you have a side gig you can do from home to raise up your budget and work a bit harder for that garage budget, it will make the long run better. Also, I'm not cut out for it, but I know a lot of people that go out and buy flip items (cars, bikes, stereos, etc.) to simply make a little extra cash each month. I wish I had the knack for it because some of my friends live VERY well just doing this.

There is a lot of GREAT info here. Lots I'm personally going to be reading through several times and things I hadn't considered. (like the septic field thing) I know for me, I'm going to be looking at selling one of our major project vehicles so I can pay part in cash and then try to cover the rest with a HELOC and just work my **** off to pay back the money in expedited fashion. It's easy to talk about and plan, but who knows what the future holds. Just going to have to have an escape plan.

If you HAVE to have a garage, just make it happen, plan, be smart, and do as much as you can that you feel comfortable with to save money. Figure out if you have the ability to pull in some additional income to make it happen. Sacrifices and financial planning seems to be the only way, these days. But waiting 10 years for something you HAVE to have, is not going to work and so you will simply have to find a WAY to MAKE it work.

Keep us posted! Great thread!

 

[FredWurlitzer]

Just stumbled on this thread, as this is a heavy topic in our household right now. Although a bit older (43), there are lots of other similarities to many of the situations mentioned here.

This is probably one of the most frustrating topics of garage building and for many (including myself) owning a place to build projects and even simply store things that need to be stored is just part of a lifestyle that many of us will die with or because of. I know for me, I'm totally unproductive and even get a little bit depressed without a place to work on the things that are my "therapy" and simply part of who I am. I will sacrifice as needed to achieve the goal of having a shop, luxury or not. It can be done smart.

We live in an old house that's being renovated at a VERY slow rate. We bought the house 7 years ago and we've since had two kids. We would have had the majority of the renovation completed 2 years ago before our first came, but got screwed by a contractor. Now I can't hire someone to finish this part of the renovation and stay within our planned budget, so the project is now 7 years old. It's a NIGHTMARE living in this mess. We manage, but there are days I would rather burn the house down than look at the mess it's created. Thankfully we're getting close, but now we're moving into our planned timeline where we absolutely HAVE to have a shop/garage to work in, which brings me to a point, here. Don't let the construction drag out any longer than you're willing to deal with it, or at least have an escape plan in case it gets to be too much.

I'm planning on building my stick-built shop space on my own. Myself and a handful of friends are going to frame out the shell ourselves (I'm sure the beer and pizza budget will be considerable). I will hire someone to do the foundation/concrete work as well as the roofing because of the 12-12 pitch planned. We are at a point where we are clearing out our debts to consider the long run, but also, we are now willing to make some sacrifices to get this garage/shop built in parallel. I literally have no place for my tools or to work because the existing garage is simply too small. Probably building something around 28x32 with a loft.

Further back on point, financing is something we're starting to look at ourselves, because it's actually impeding our ability to do the work on the house, our hobbies we enjoy, or to even run a side business (which is on the table at the moment. We always have backup plans). One thing we are considering is simply selling stuff and taking on more side-hustle work. If you have a side gig you can do from home to raise up your budget and work a bit harder for that garage budget, it will make the long run better. Also, I'm not cut out for it, but I know a lot of people that go out and buy flip items (cars, bikes, stereos, etc.) to simply make a little extra cash each month. I wish I had the knack for it because some of my friends live VERY well just doing this.

There is a lot of GREAT info here. Lots I'm personally going to be reading through several times and things I hadn't considered. (like the septic field thing) I know for me, I'm going to be looking at selling one of our major project vehicles so I can pay part in cash and then try to cover the rest with a HELOC and just work my **** off to pay back the money in expedited fashion. It's easy to talk about and plan, but who knows what the future holds. Just going to have to have an escape plan.

If you HAVE to have a garage, just make it happen, plan, be smart, and do as much as you can that you feel comfortable with to save money. Figure out if you have the ability to pull in some additional income to make it happen. Sacrifices and financial planning seems to be the only way, these days. But waiting 10 years for something you HAVE to have, is not going to work and so you will simply have to find a WAY to MAKE it work.

Keep us posted! Great thread!

Great post and some great points. Thanks for contributing! At this point I think we're going to save and see where our finances take us in the near future. I feel that a garage is imminent, it's just a matter of when and how.

I was able to get a couple of concrete/foundation quotes in the last month or so and the prices varied greatly.

 

[Railman67]

I was in a similar situation as you. 30's, bought a cheap house, wanted a shop. Etc. The wife was tired of me cussing about working on stuff in the yard. I shopped several options. Home equity loan, retirement loans etc. I had about 12k saved up, had good credit, and found a unsecured loan through a credit score sight. It was 30k for 5 years at 6%. The payment is steep but itll be over in 3 more years. With this and the cash I built a 40x60 enclosed with a 16x60 lean to, but did it all myself except the concrete and roof. There are ways, but don't cut yourself short, and make sure you are planning for retirement.

 

[slimpickins]

I think you have one option that hasn't been mentioned and maybe it's not one you would even consider, but here it is....

What about trying to sell your house for a profit and trading up to a house that already has a garage? You'll pay less for a garage that someone else built. You might not get the benefit of building exactly what you want, but in the long run it may be a good option.

I've known quite a few people that have traded up their house 3, 4, 6 times in as many years, and each time, they earn a bit more equity by buying a bit of a fixer-upper, doing a bit of work and selling for more than they paid. THEN they go and buy the house they wanted.

It's just a thought, but people sometimes get too attached to their first house that they put a lot of heart and soul into, especially if it's a first house, but never forget that you should make decisions for sound financial reasons, not emotional ones.

The other option is whether you and/or your wife can expand your means by taking on a second job for a couple of years? starting some kind of small business? etc. Or expand your means by cutting discretionary expenses, like lunches out, gym memberships, etc. Probably OLD news there, but I didn't see anyone else mention it.

If you do decide to stay and finance, pay the loan off asap. Do this by rounding your payments UP a bit. If you're paying $185 per month for financing a garage, bump the payment to $200 or $210. Most banks will let you do that no problem. We paid off our first mortgage in 10 years by always paying more than the "mortgage calculator" says you have to pay. That little bit extra ALL goes to pay down the principle. The more you can hammer on the principle every month, the better.

Hope this helps!

 

[yeldogt]

Scotter: You make some valid points ... important points. Most people on here like to have projects and do things themselves. When in your 20's and 30's -- many have more time and certainly more energy (everybody). Kids and more job responsibility quickly get in the way and projects slow down. Most just don't understand the stress this can create ... projects don't get cheaper over time.

Borrowing responsibly is often scary -- but the correct thing to do .. especially late 30's.

 

[Jazz1]

Just get a loan and do it. Financing a garage is a asset, unlike people financing a vehicle which is a depreciating luxury item

 

[jonshonda]

Saving for retirement is good (latest advice I got was 15% up from 10%), making sure you have enough cash to cover rainy days is good. But you also have to enjoy life. If you take a hard look at what you want in life (kids, vacation, other home improvements etc) and can still afford the garage addition then do it.

We just picked up a Miata as a 3rd fun car, and right now we have a good sized two car attached garage. We also park a 20ft camper in the grass on the side of the driveway, along with a vehicle now! I really really want to add onto the back of the garage so we can park 4 vehicles in there, as well as a decent shop in the back.

The problem is the house needs updating. Nothing major, but we want to paint it, the deck needs to be refinished, we want to add more lighting and ceiling fans, lots of yard work and landscaping...the list goes on and on as well as does the expenses.

 

[gunguy]

Start here - Check your City / County website(s) Building Dept / Permitting office for any pre construction guidance.

Verify your setbacks, easements, height restrictions and draw up a quick site plan.

Are you on septic or sewer? If septic a reserve area may very well be required.

Site plan example

+2 This....Until you know what you can and cannot do, you'll never be able to calculate an accurate number for the amount of funds you'll need to do what you want to do. Along with that, the better you can define what you want, i.e. size, style, materials, etc.etc. etc the more accurate your number will be.

Whatever number you come up with, add at least 20% to it for unseen contingencies.

As far as borrowing v saving, debt is a tool, just like anything else. Use it wisely. Just realize that in most cases, garages return very little if any money on the investment.

Good luck

Jim

 

[mike93lx]

Just get a loan and do it. Financing a garage is a asset, unlike people financing a vehicle which is a depreciating luxury item

Garages don't add value to a property, generally. Hard to call it an asset (from a personal finance perspective) when it is mostly unrecoverable

 

[Jazz1]

Garages don't add value to a property, generally. Hard to call it an asset (from a personal finance perspective) when it is mostly unrecoverable

Tough to argue that the two identical houses, one with a heated wired garage would be the same price as identical house next door with no out building.

Its a myth that women cling to so their hubby never gets out of sight and has no where to hide when she's in "b" mode.

 

[hmbemis]

Are there loan programs that take into consideration the "new" value of the home now that the updates are completed? I feel that the value of the home has reasonably gone up since our purchase.

A mortgage is really the only option I'm aware of...

Did you put anything down when you bought the place? If you did, you could probably find a HEL(OC) for whatever equity exists on paper between what you owe and what you paid.

I bought my first house in 2009 w/ 10% down, I had about $30K in equity on paper so I got a $25K HELOC that I combined w/ another $25-30K in cash to rehab the entire house myself (it was one of those places that was on the fence to tear down vs. rehab so it needed quite a lot).

In 2012 after all the repairs had been done I applied for a new mortgage w/ a different bank. I had to pay for an appraisal and the low end of their value range for the house was $125K over what I paid. My new mortgage ended up absorbing the balance the HELOC and still coming in at <78% LTV so I was able to drop PMI.

It all depends on your market and lender though.

Personally I'd be looking _really_ hard at whether this makes sense for you or not -- you don't want to get buried under the payments on a 10 year HELOC to build a garage, but doing a 30yr refinance could make sense as rates have been drifting lower recently and you might find that the payment stays similar even if you're borrowing more while keeping the end the date the same (so a slightly less than 30 year term)

 

[SGKent]

50,000 loans during my time in the mortgage industry. Will a piece of advise be listened to? Anytime someone borrows money it costs them more than if they paid cash that day. But if there is heavy inflation involved it may be less expensive to use a loan. Or if the money being borrowed makes more money than waiting to be able to pay cash. The real and only key to borrowing money is WHAT IS THE ABILITY TO REPAY? Is the borrower in a business subject to layoffs or slow downs. Are you needing two incomes to be able to repay debts? Do both parties work and one income is going into savings? If the answer is that it takes full employment and two incomes to borrow to build a recreation then it often results in the house being sold down the line when payments can't be made due to health or changes at work. Remember - if you need 25 -30 years to pay a house off then there will be times in there where companies close, industries change etc.. Automation is going to get worse, and there is no promise that the administration in power right now will remain in power. We could see a new administration in a year and a half, economic slowdowns, money going offshore again, and much higher taxes as well as cost of living. If you are on the west coast you will understand what I am saying. Those homeless lost their chair in the musical chairs game and now they have no hope. Lenders are friendly when you are borrowing and ruthless when you are behind in payments.

 

[pennsylvaniaboy]

There is a point.....loans and living beyond y our means arent a great plan, but I dont want to save for 20 years and be too old to do the things I can do now..... You gotta find what works for you.

 

[scootermcrad]

Looooots of good stuff in this thread. Lots of good points. There is a lot of different people reading this thread and in many different types of personal situations. Some of this will resonate, some of it will be dismissed due to simply not being applicable to the reader. But this is a really important thread. Especially this day in age.

I think the bottom line is, don't live beyond your means, make a plan, save if you can, but just be smart. This is a HUGE investment for most people and it really does require financial planning and some self discipline to know how far one can go or really NEEDS to go. I think if a person NEEDS a shop/garage they know deep inside that it's in their best interest to figure out a responsible way to do it (LOTS of great ideas already mentioned!). I will say, it's really easy to get caught up in the "while you're at it" concept, or listening to the comment, "make sure you build it big enough" mentality...

...It's REALLY easy to plan, borrow, and build a shop/garage that is GIGANTIC that can fit every little thing you could possibly imagine. But the self discipline part should kick in right about here. "What makes sense?" Can you get by with smaller and focus on organizing the space better to get the most out of the square footage? Can you have a smaller garage with a nice car port to store projects or equipment under? Does a lean-to make sense? This is a good time to evaluate what you have, what you want to have for the long term (cars, tools, lawn equipment, storage for junk not really needed, sporting goods, etc), and how it will effect the rest of your future plans.

Since I've been thinking about building a shop for myself and have a growing family and a house that needs some work, I've personally re-evaluated my own needs. I originally wanted to end up with something that was about 40x30 so my car projects didn't have to sit outside and I would have a place to build stuff. NOW... I'm looking at what I have and does it make sense for the long run. I'm down to 32x28 and probably won't have much for interior finishes, but gives me a place to work and hopefully won't detract from the value of my property.

There are also some interesting points about rather a shop/garage will or will not bring value to the property. I really doubt anyone can make a definitive statement on what holds true with regards to value RIGHT NOW. Way too many things to consider in that statement, like geographical location, size of the related home, does the garage architecturally compliment the home and/or the rest of its surroundings, country setting or in a residential neighborhood, size, its use, and on and on.

Seriously though... GREAT THREAD!

 

[stm317]

Tough to argue that the two identical houses, one with a heated wired garage would be the same price as identical house next door with no out building.

Its a myth that women cling to so their hubby never gets out of sight and has no where to hide when she's in "b" mode.

It's not that there's no value added, it's that the final result is worth less than whatever you paid to build it. And that's true whether you pay cash or finance. Financing only adds interest on top of the fact that you're already underwater on the total cost.

If you build a $30k building, it's not going to increase the value of your property by $30k. Most tax assessments around here show about half of the cost of the building being added to the property value. So, if the building costs $30k, and you financed it for 30 years, you end up paying nearly $60k for a building that's increased the value of your property something like $15k. A garage or shop is a luxury good. It's not a good financial choice (unless you're using it for a business). In that regard, it's not much different than financing a nice vehicle, or an expensive watch or something. They're still tangible assets, so they have some value but you pay more to have them than they're worth. Nobody makes money on them.

 

[red61cj5]

The best way to save money on a garage is to learn how to build for yourself. Most 5000 dollar sheds can be built for 2-3k, and its not hard. Square, level, plumb, learn to read a tape. I built my 30x50 for less than 30k. I know some municipalities make it harder on DIY than mine, but garages and sheds aren't usually as strict as a home.

 

[paredown]

..
What about trying to sell your house for a profit and trading up to a house that already has a garage? You'll pay less for a garage that someone else built. You might not get the benefit of building exactly what you want, but in the long run it may be a good option.

I've known quite a few people that have traded up their house 3, 4, 6 times in as many years, and each time, they earn a bit more equity by buying a bit of a fixer-upper, doing a bit of work and selling for more than they paid. THEN they go and buy the house they wanted.

It's just a thought, but people sometimes get too attached to their first house that they put a lot of heart and soul into, especially if it's a first house, but never forget that you should make decisions for sound financial reasons, not emotional ones....

This didn't get much take up, but I think this is great advice.

My folks felt so lucky to get into the house that we mostly grew up in, and for my mom, that was it. She did not want to move--ever! So my dad never got the chance to go for it, and buy a new property that had the potential or existing shop in the backyard. (For him it would have been revenue producing...) So we ended up purchasing and renovating a free standing building for his business, and a huge amount of energy and creativity went into that, instead of the family property...

 

[mike93lx]

A huge downside to selling and rebuying are all of the costs that go along with that. 5% to the realtor, moving costs, replacing/adding furniture, etc. Plus the intangibles, like the disruption, learning a new house and systems, learning the area and neighbors.

My wife and I have been looking at doing the same lately and it is just so damn expensive to move. I could almost put an addition on my current house for what it would all cost me.

 

[ndm]

My situation requires financing.

I bought a better home but with a much smaller garage and have been hating life in the project sense since doing so. I had an oversized 3 car and now have an undersized 2 car. I have been sketching up the new garage extension for over a year now. I am going to have to finance it but not because I can't save. I have a car that I plan to restore sitting outside now and the elements have rapidly accelerated the work that will need to be done.

At this rate, by the time I save it all up, the darn car won't even be worth restoring. It is a time thing for me. I have two vehicles that will be paid off very soon and I gotta get my shop built.

I don't want to move unless it is finally to Georgia. As long as I am in Illinois, I want to stay where I am at. Schools are great, all but 1 neighbor are awesome and my almost 7 year old has a bunch of best friends that live behind us and within 2 house radius. Its so nice watching them have fun playing every day like the sandlot movie.

I just need to add a 2 car tandem to my 2 car attached but with tall ceilings that will allow for a lift. Im also going to add an additional bedroom and bath over the existing garage to maybe increase the home value in the process.

 

[GMCGarage]

Whatever you do, dont pay cash. Bad financial practice. Money is cheap to borrow, so even if you had the cash, leave it in the market, and take a loan. If things get tight, you can always use it as a back up.

 

[scootermcrad]

My situation requires financing.

I bought a better home but with a much smaller garage and have been hating life in the project sense since doing so. I had an oversized 3 car and now have an undersized 2 car. I have been sketching up the new garage extension for over a year now. I am going to have to finance it but not because I can't save. I have a car that I plan to restore sitting outside now and the elements have rapidly accelerated the work that will need to be done.

You bring up a really good point as to WHY one may need to finance and get the ball rolling as apposed to waiting and saving...

I'm in a similar boat. I unexpectedly inherited 2 important cars in my family's history. One just in the past couple weeks and one in the past few years. The one I inherited a few years ago is somewhat rare and means a lot to our family and needs to be in a garage soon or there are going to be serious problems that will cost me FAR more to fix. I've been doing temporary cover for several years and I've reached a point where it doesn't provide enough coverage and or security for the vehicle. I don't want to do it with now a second car and something like a car port just won't cut the mustard and is just throwing money away. This was never part of our plan, so it accelerated the urgency ahead of the rate of accumulating money to build.

Glad you mentioned that.

 

[ndm]

You bring up a really good point as to WHY one may need to finance and get the ball rolling as apposed to waiting and saving...

I'm in a similar boat. I unexpectedly inherited 2 important cars in my family's history. One just in the past couple weeks and one in the past few years. The one I inherited a few years ago is somewhat rare and means a lot to our family and needs to be in a garage soon or there are going to be serious problems that will cost me FAR more to fix. I've been doing temporary cover for several years and I've reached a point where it doesn't provide enough coverage and or security for the vehicle. I don't want to do it with now a second car and something like a car port just won't cut the mustard and is just throwing money away. This was never part of our plan, so it accelerated the urgency ahead of the rate of accumulating money to build.

Glad you mentioned that.

Same. The car I have is an inherited car from my Grandma. It was at my uncles house, then my sisters house, then my old house, then my brothers house and back to my new house. I bought another one for parts and to take flexible pattern bucks off of to enable restoration of the original. So now I have 2 of the same classic cars, two daily drivers for the wife and I, one company fleet truck and a motorcycle. Also my daughter is sometimes home from college.


I need the additional space asap!

 

[FredWurlitzer]

A mortgage is really the only option I'm aware of...

Did you put anything down when you bought the place? If you did, you could probably find a HEL(OC) for whatever equity exists on paper between what you owe and what you paid.

I bought my first house in 2009 w/ 10% down, I had about $30K in equity on paper so I got a $25K HELOC that I combined w/ another $25-30K in cash to rehab the entire house myself (it was one of those places that was on the fence to tear down vs. rehab so it needed quite a lot).

In 2012 after all the repairs had been done I applied for a new mortgage w/ a different bank. I had to pay for an appraisal and the low end of their value range for the house was $125K over what I paid. My new mortgage ended up absorbing the balance the HELOC and still coming in at <78% LTV so I was able to drop PMI.

It all depends on your market and lender though.

Personally I'd be looking _really_ hard at whether this makes sense for you or not -- you don't want to get buried under the payments on a 10 year HELOC to build a garage, but doing a 30yr refinance could make sense as rates have been drifting lower recently and you might find that the payment stays similar even if you're borrowing more while keeping the end the date the same (so a slightly less than 30 year term)

This is an interesting option.. as mortgage rates are a little lower now than when we first got the house a year ago (about 0.5-0.75%). I assume you are now paying property tax based on the new appraised value or "purchase" price? How much did the appraisal run you? Were there closing costs involved? Inspection?

 

[aggie113]

The house I bought didn't have a garage and there was no easy way to attach one so I knew I would be building a big detached garage eventually. I started saving after a year of owning the house and after about 4 years I was finally able to find a builder with a reasonable price and had more than half saved up. Thanks to some time spent working in war zones I had a healthy savings already and I was able to pull the remaining 18k out of savings. The savings will be replenished as quickly as I can manage to try to reduce the compounding effect as much as possible but I'm willing to take that hit and have the garage I'll be very happy with for at least the next 20 years now.
So a mixed bag, good things are worth waiting for but don't put things off too long over some fear of future damage/hurt to your finances. Be smart about it.