Kibanda plaque by Lysh @ Rustic Ludlow
This post has been on the back burner for months now. My apologies to those of you who have been asking for a Kibanda update. Your patience is rewarded.
For those of you who wonder why these damn Kibanda posts even appear on what is (mostly) a financial/investing site, your patience will also be rewarded. Coming soon is an updated version of the now classic 2011 post What we own and why we own it. Should be fun to see what has changed.
There is at least some benefit to my procrastination: There is more to report and that is that most of the work is done.
The House
From the Road
From the Lake
In the last 12 months we have…
…replaced the roofs on the house, shed and garage, added central AC, updated the plumbing and electric, gutted and remodeled one of the bathrooms (turned out great and under budget!), removed some dangerous trees, painted the interior, replaced the carpet in the living room and had the bedroom carpets shampooed (they came up a treat — we should have just shampooed the living room one too), replaced the decaying parquet floor in the hall with tiles that look like old barn wood (used the same in the bath remodel), scraped and repainted the flaking decks along with the floor in the screened porch, replaced the canvas roof on that porch and rebuilt the north wall foundation.
In addition to that rather extensive list, there have been countless little things like adding lights to the closets and under the kitchen cabinets.
When all the work gets overwhelming, this reminds me of why we’re doing it…
But mostly the process has been better than expected. We diligently looked for and were fortunate to find a jewel of a handyman/contractor who has kept it affordable, mostly under budget and a pleasure to plan and execute.
The North Foundation Wall
The rebuilding of the the north wall foundation is a striking example and worth a bit more comment.
When we looked at this cottage, the previous owners provided an estimate from an engineering company to correct the problem. This part of the foundation had been added to provide basement space (the rest of the place is on crawlspace and slab) for the mechanical systems when it was changed from a 3-season shack to a 4-season, well, shack. They built the foundation out of wood.
Our best guess is this was done sometime around the mid-1980s. Over the last 40 years or so, the pressure of the outside soil had begun to push in the wooden foundation wall. The engineering company’s solution was to jack up the house, tear it all out and replace it with a new, solid, masonry foundation.
It would have been spectacular. It very likely would still be there 20,000 years from now when the archeologists dig it back up conclusively proving primitive humans once lived there. It also would have cost $25,000.
Our jewel of a handyman/contractor had a different idea.
One Saturday he and his teenage son came over, dug it out by hand (no room to get equipment back there), rebuilt the wood foundation and filled the sand back in. For $500. Since the last wood wall lasted ~40 years, this should easily last at least 20. At which time I’ll very likely be dead and new owners will be tearing the place down to build their dream home.
The only things left to replace are the vinyl floor and the sink in the kitchen. Neither really “need” to be done. But we love the way the barn wood-look hall floors turned out and, when you have a jewel of a handyman/contractor, you find yourself looking for more stuff to do.
The Loft
This past spring we also turned our attention to the seasonal guest loft over the garage…
Loft Deck
View from the Loft Deck
This is, to my eye, a delightfully charming space with a cathedral ceiling, open plan, small kitchen and full bath. But, because it is not fully insulated, it must be closed up with the water turned off each winter.
Our initial thought was to gut the place and fully insulate it, making it 4-season and potentially spectacular. But getting it sealed up tightly enough would be a very expensive proposition and really not worth doing for a space we will be using for guests, most of whom will be sensible enough to visit when the weather is fine.
While the water must be shut off before the winter freeze each year, we knew it had been several years since it had be on and the loft space used. So we couldn’t be sure turning it off for winter was the only reason.
Our plumber warned us that turning it back on would require care and had the potential for very bad things to happen. Care was taken. Water flowed. Nothing bad happened. Our streak of the surprises being pleasant ones continued: The benefit of pessimistic planning.
Once we knew we had water, we decided to hold off on a major redo and just spruce the place up. We replaced the rather nasty toilet, added a ceiling fan and new baseboard heaters, and fixed a bunch of little stuff. Gave it a good cleaning, finished off with shampooing the carpet.
Next spring we’ll revisit our ideas on it and decide if we want to redo the bath and/or the living space.
Running the numbers
So far, all this work on the house has run ~$26,000. While most of that can be considered improvements, some portion would be more accurately described as normal on-going maintenance and repair. However, separating the two is more effort than it is worth for 2017-18.
Instead, I have chosen to add this lump sum to the $235,000 purchase price. Beginning in 2019, other than something major like a septic system, I’ll list most things as normal on-going maintenance and repair. They will be a line item and totaled as part of the annual cost of owning the house.
For now, we add the $26,000 and the $235,000 for a total of $261,000 tied up in the house.
Using the method described in this post, the cost of Kibanda looks like this:
- $10,440 — opportunity cost (261k x 4%)
- $ 5,870 — Real Estate tax
- 0 — Maintenance & repair
- $16,310 — Total
- $21,600 — Apartment rent @ $1800 per month
- $5290 — How much less the house is than the apartment.
Of course, going forward that maintenance and repair line won’t be zero. To see what that might look like, we can take what we have spent so far in 2018, ~$5000, remove it from the 26k in improvements and instead put it as M&R. Then the numbers look like this:
- $10,240 — opportunity cost (235k + 21k = 256k x 4%)
- $ 5,870 — Real Estate tax
- $ 5,000 — Maintenance & repair
- $21,110 — Total
- $21,600 — Apartment rent @ $1800 per month
- $ 490 — How much less the house is than the apartment.
That makes it a much closer horse race. Then again, given the money spent sorting the place out, on-going maintenance and repair is unlikely to run as high as $5000 per year. At least for the next few years.
So far I feel comfortable in saying the house should cost us no more than the apartment. Given that we get to live on this beautiful beach, I’ll take that as a win.
At least as long as the Swords of Damocles continue to hang by their threads.
My favorite Kibanda picture so far, just to break up this long wordy part
The Swords of Damocles
All that said, if you’ve read the first three installments of this saga, you know it is not as simple as all that. There is a reason we got such a screaming deal on the place. All the other buyers took a look and ran screaming for the exits.
This is because, in owning this little slice of heaven, we have three Swords of Damocles hanging by their slender threads over our heads.
Sword #1: The foundation
While the north wall foundation issue has been resolved, it was only one of three.
The second is, that when this place was built in 1939, the foundation was not sunk deep enough to meet current standards. While this will always be a scarlet letter on this place when it comes time to sell, the fact is that it has held up just fine for 79 years. Add to that the enormous cost to correct it and we have a classic “let’s just live with it” situation.
The third issue is a bit more concerning. Built in 1939 as a three season cottage, it had no heating system. That was added later. How much later is not precisely clear. However, a receipt for the furnace that was installed in 2000 specifies that it will be connected to the existing ductwork. That implies that it was a replacement for an existing furnace. If we assume that the existing furnace had lasted for 20 years, that suggests that heating was first added by 1980. Maybe even earlier.
If that is true, then the ductwork has been in place for almost 40 years. Maybe more.
That is important because, when the ductwork was installed, they whacked big chucks out of the support beams to run it. Yeah, it dumbfounds me too.
Not surprisingly, the floors sagged and are to this day uneven. At first it is like walking on the deck of a ship.
That’s the bad news. The good news is that various jacks and supports are scattered about the crawlspace and, as far as my jewel of a handyman/contractor can tell, these seem to be holding things in place. Plus, in the year we have been here, we haven’t noticed any change.
So, again, our plan is to keep watch, live with it and hope the place doesn’t collapse into the crawlspace.
Sword #2: The buried well
Originally this was a one-bedroom cottage. Somewhere along the line, someone had the wonderful idea of adding a second bedroom. Great for us, as we wanted two bedrooms. Unfortunately, they built it over the well.
Thoughtfully, they built a trapdoor to provide access and this is fine as long as the well only needs routine maintenance. Plus, being so close to the lake, the water table is high and wells hit water almost immediately. Still, if something major happens and major access is needed…
…well (pun!), there is always a solution. I just shudder as to what it might be and what it might cost.
Sword #3: The septic system
Of the three swords, this one hangs by the thinnest thread.
When the tank was last pumped in 2016, it was reported to the county as “deteriorating.” The county, in turn, sent the owners a letter saying, in effect, “we are not requiring you to do anything just now but the time is near.” Those owners, our sellers, were kind enough to include this letter with the sales materials. So we knew going in.
Once in, we had a septic guy come out a look at it.
“What do you think,” I said.
“It’s deteriorating,” says he.
“So it needs to be replaced?”
“It ain’t broke. If it ain’t broke, don’t fix it.”
“How long will it last?”
“Hard to say. Could go another ten years. Could collapse tomorrow.”
“What will it cost to replace?”
“At today’s prices, about $15,000.”
With this reply I am doing a dance of joy. I had figured it would run 15-25k and need to be done immediately. Of course my face remains somber. My dance of joy is internal.
But, as there always is, there is a catch. Because we are close to the lake, environmental laws have changed and our lot is small, it is possible we won’t be allowed to replace it at all. The alternative, in that case, is an ugly one.
Instead of a septic system that disperses the liquids leaving only the solids to be pumped every few years, we’d be stuck with a tank system. That is a tank that collects everything and that must be pumped every week or so depending on how much water you use.
So, the septic system remains the most immediate wild card. For now, we treat it gently and hope for the best.
The fates have been generous thus far, but they have those three swords in hand ready to ruin my day on a whim. When the cold sweat starts out on my clammy skin, I look out at this…
…and am reminded, “Oh, that’s why.”
What could go horribly wrong
A year ago I would have expected this section to be much longer. Sitting here today, I’m feeling pretty good about it.
I suppose something major not accounted for could crop up but, after a year of living here and all the workers who have crawled in and around it, at this point it is hard to see what that might be.
Based on that, the worst case is that in short order the septic system fails, the well needs to be re-drilled and the second bedroom torn down to access it, and the rest of the house collapses into the crawl space.
Yikes.
In that case, the place would need to be scraped.
But as bad as that would be, there is one major advantage this property has. Most of the value in not in the house. It is in the lakefront lot.
It would cost ~$20,000 to tear the place down. Add that to the 235k we paid and the 26k we put into it, the total cost would be 281k. The lot itself, shorn of this house that raises some major red flags to buyers, would be worth at least 225k. Maybe as much as 250k. An empty lakefront lot is rare and very appealing to those looking to build from scratch. And this is an especially lovely lot.
So, worst case, we’d be out ~56k. Perhaps as little as 31k or less depending on the market. Certainly not a happy day, but at this point in our lives a fairly minor bump.
This, and not having to pay 25k for a foundation wall done “right,” is the advantage of a beach shack.
The plan going forward
All of this is presented as if this is going to be our permanent, full-time home and, of course, it is not.
Now that we have the place mostly sorted, we are looking toward resuming the nomadic life it interrupted. Longtime readers will recall we have been coming to this area each year for the last 15, each time staying in my in-laws’ beach house for about a month. But we wanted more.
The plan now is that we will spend two months in the spring and two months in the fall, our two favorite seasons here at Kibanda. The weather is mild and there are few people.
During the summer we’ll Airbnb the main house when the prices and demand are high. Our new friends along the beach who Airbnb theirs, tell us we can expect $2500 a week over the 15 week season. Even after deducting operating costs, that’s a nice chunk of other expense-covering change.
We’ll close it up for the winter.
We’ll travel for those two 4-month periods.
As for the loft, we are debating on what to do. For now we are planning to use it for friends when they visit. We might also rent it for a few days at a time or even as a writer/artist retreat for the season or for a few weeks at a time. The guy who does our tree work has already asked if, instead of payment, he could bring his girlfriend for a weekend. As I like him, done deal!
T&N
Whoever comes to visit, will get to sleep on a Tuft & Needle Mattress.
These are the guys I raved about in this post, back when they first became an affiliate. When they disbanded their affiliate program a couple of years ago, I offered them the banner ad at the top of each page here on the blog. This means they now pay a flat monthly fee and the blog no longer earns a commission if you choose to buy from them.
I genuinely love this company and the ethical way they do business. Check out the comments in that post to get an idea of what I mean.
So when we came to Kibanda last fall, the first thing we did was to order two queen mattresses; one for each bedroom in the main house. T&N being T&N, the mattresses arrived promptly. Unfortunately, the place from where we ordered the new bed frames took forever. But that’s a story for another day.
With the loft done, we just moved our bed up to it in preparation for our first guest, Connie, a Chautauqua alum who arrives this week. We are back to sleeping on our trusty air mattress and need a third bed.
The cool news is that T&N now offers a walnut bed frame and it looks gorgeous…
They are also offering a new version of their mattress called Mint. We’ve ordered both and can’t wait to try them.
After we’ve lived with the Mint mattress and Walnut frame for a while, I’ll post a review and tell you what I think. If you don’t want to wait, given T&N’s exceptional customer care, you can probably just do what I did and order yours now.
For now…
With the work mostly done, all that remains is to kick back, relish the view, walk the beach and watch the hummingbirds and butterflies flit about the garden. And trust in those slender threads holding up the swords.
******************************************************
I’ve joked that we bought Kibanda because I needed more aggravation in my life. Turns out, that’s a real thing:
*******************************************************
Some of these were shared at the end of my post on Optimism. Worth sharing again, I think:
Interview with George Church on BioEngineering, an amazing discussion of human genomics, bringing back Wooly Mammoths (and why that would be great for the environment) and aging reversal (and why it is better than life extension).
More reasons why the future might be incredibly good
(Unless the grey goo gets us)
50 Ways the World is getting Better
******************************************************
why the world is not the way you probably think it is.
******************************************************
My pal Bill read the first three points of this article and then paused to send it to me:
******************************************************
On a different note, another great post:
Here’s to all the girls who’d rather catch flights than feelings
And from the always entertaining and insightful Millennial Revolution:
My friend Akaisha has spent the last couple of decades roaming the world. She’s learned a thing or two about lightening the load. Here’s some wisdom she gleaned over coffee in a cafe somewhere in Guatemala about how to lighten the psychological burdens we all carry:
******************************************************
Recent Interviews & Projects
Bigger Pockets Money Show: JL Collins Edition
******************************************************
Chautauqua
Both weeks for Greece sold out have long been sold out. However, please feel free to put yourself on the:
Millennial Revolution — Chautauqua: Come Join the Family (This is a brilliant post with all the details!)
1500 Days to Freedom — Meet some awesome people… (Another brilliant post, this one with dinosaurs!)
ChooseFI — Oh, the Places we will go Chautauqua in the words of the speakers who will be in Greece. There is nothing quite like hearing the voices behind the words.
Also, be sure to listen to this incredible episode with Travis Shakespeare. Travis is a master story teller and, among other things, he shares three:
- How the FI movement fits into the cultural fabric of America and its traditions of rugged individuals charting their own course.
- The coming Playing with FIRE documentary
- How he decided to come to Chautauqua and what it has meant to him. One of the best insights I’ve heard or read yet.
Mad Fientist — Money Talks panel discussion at Chautauqua UK Attendees discussing FI and also a great inside look at the Chautauqua experience.
JL Collins — Greece 2018 Mount Olympus
******************************************************
Old Post
Every now and again I get a comment on an old post. It is always nice to see those getting some attention and it is fun, for me anyway, to re-read them. Maybe you too. Here’s one:
What the naysayers are missing
******************************************************
