human, being

Where to live, what to do

When I bought my townhouse in August 2004, it was perfect for Lauren and me. At just over 1500 square feet, it has two master suites on the top floor (each bedroom is about 16 x 16 with vaulted ceilings), a living room/dining room combo and a tiny kitchen on the main floor, and a full, unfinished basement. The location was perfect as well: 15 minutes from my parents, Park Meadows, Cherry Creek and work. I’m close to a Target, a Costco, a Whole Foods, the bike path that takes me anywhere in the city I want to go. I’m close to my gym. My unit backs to a green belt and the seldom-used tennis courts. I have a small patio and garden in back, and a single-car garage and a driveway–some units in my neighborhood don’t have the latter. The swimming pool is a 50-yard walk. The HOA takes care of trash, water, insurance, grounds maintenance and snow removal. I don’t even own a shovel.

It’s not as nice a space as I lived in when I was married. Built in 1985, it is completely un-updated. I had hoped to gain enough equity that I would be able to use my HELOC to fix it up in a few years. I could invest about $50k and have new bathrooms, kitchen, flooring, doors, windows, moulding, gas fireplace insert, a/c and a simply finished basement with a third bedroom, a great room and a shelled-in third bathroom. Given that I paid $173k and other units that had been completely updated were selling for around $230k, it wouldn’t be a bad investment.

When I bought it, it had been a rental for a decade. I asked the seller for new carpet and a new furnace because the old one was cracked. I new I’d need to replace the appliances and started with a stove, purchased with funds my very generous friends gave me as a housewarming present. I rented a sprayer and repainted all the ceilings. I enlisted friends and painted every white wall in the house: my bedroom became an aubergine retreat; Lauren’s princess-pink. On the main floor, I painted the back wall my favorite burnt orange, and the front hallway and bathroom my favorite blue-green. It was not the McMansion I’d vacated with my divorce, but it was all me.

Then I met Steve, and he moved in with me. All of a sudden, 1500 square feet felt very small. We didn’t have enough bedrooms; his son Ryan is with us every weekend, and we sectioned off a bedroom in the basement for him using sheets for walls. The basement, which had been more of a roller rink than anything else, suddenly was overflowing with stuff. We set up a playroom for the kids, furnished with my old couch, some metal shelving to hold toys and Steve’s kitchen table. At the same time, the market began to turn. We had financial difficulties. We repainted our bedroom into a soft beige, banishing the ghosts of lovers I had before Steve. We repainted the kitchen cabinets. And we stopped.

In August, Lauren and I will have lived here for five years, and Steve and Ryan will have lived here for three. Yet to him, it still feels like “my” place. We both would love to turn this townhouse back into a rental and find a new home for our family–an “us” home. It doesn’t necessarily need to be bigger–we have almost 2200 square feet because we’re using the basement fully as living space. We need more appropriate space: a kitchen that can accommodate more than one person at a time; three bedrooms; a separate room for an office, which will immediately nip in the bud all arguments about my messiness because most of my mess is office-related (and we don’t have one); a two-car garage so Steve’s car can be sheltered, and so he doesn’t have to move his car everytime I want to go somewhere. Neither of us feels strongly about wanting a detached home. To be honest, I don’t think either of us wants to take care of a yard. I think we’d be happy in another townhouse that meets these criteria, especially if it is an end unit and has better natural light than our current house has.

He’s a veteran, so we qualify for a VA mortgage. The problem is that we don’t have any savings for a down payment right now (we need 5%) and we’re underwater by $10-20k, depending on how you look at our neighborhood comps. If we rented it, we’d likely have to eat about $400/month. Units in our complex are renting for about $1000, and our outlay, including HOA, is $1440.

We’ve gone back and forth about whether we should just stay here and slowly but surely renovate it, or put the cash we’d spend into a savings account for a down payment. There are advantages to both. The only things we couldn’t have in this house, compared to one we could buy, are a two-car garage and a fourth room we can use for an office. The basement is too small to accommodate two such rooms. Even if the economy bounces back at the end of this year, townhouses are slower to regain value than detached homes. We could be looking at another five to ten years before we’re back at the original $174k I paid.

We’re coming up against some decisions. For example, the previous owners did not replace the pad when they replaced the carpet, and they put in the cheapest carpet possible. Steve has apoplexy about the stains that keep coming up from the gross old pad; he won’t let us have anyone over unless he’s steam cleaned the carpets, which is IMO ridiculous. So we need to replace the flooring, at least on the main floor. We also really need to add a/c. Colorado has become incredibly hot in the summer. We have this jury-rigged system of a swamp cooler in the basement window (hiding it from the HOA, which deems them illegal) and a series of fans blowing up two levels. But on 100-degree days, Lauren’s bedroom, which is over the garage, is in the 80s, and our room isn’t much cooler. A/c is easily $4k. It’s not something we can do ourselves. So, at the very least, we’re looking at needing a $6k investment in the next 12 months. Most of this we’d charge and pay off when Steve gets bonuses.

However, $6k is half of a downpayment on a $250,000 house.In this market, we can get a lot for $250k, especially in a townhouse.

The other choice is this: rent this space out and find an appropriate rental for our family. Our only expenses in this case would be about $750 for basic repairs to the townhouse, plus a deposit and moving cost for the new place (I don’t move myself anymore because my friends no longer work for pizza and beer).

We don’t have to make a decision today, but we’re getting to a point where we need to make one soon.


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