Blog :: 03-2015

What Does It Cost to Build a New House?

I’m often asked what it costs per square foot to build a house in the Tri-State area. In spite of having built five homes, there’s not an easy answer because of the many factors involved.

1. What’s included? Is it just the cost of the house or are you including the septic, well, driveway and landscaping?

2. Finishes - Hardwood floors, stone, high-end appliances all add to the cost versus fiberglass showers, vinyl siding, standard appliances, formica counters.

3. Design – This is probably the biggest factor affecting square foot cost. A square 2-story Colonial with a clean, simple design will cost less than a shingle-style house with lots of eaves and dormers.

4. Where is the square footage located? Second floor space is less expensive than adding more to the foundation for a larger first floor.

So, is she going to answer this question or not? Okay, I am not including septic, well and landscaping as those items can vary enormously depending on your building site. Here in the northeast, construction costs do tend to be a bit higher. In our neck of the woods, a house with a simple design and basic finishes can be built for as little as $200 per sq. ft. and can go up to $400+ per sq. ft., depending on the above factors.

 

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    Mouse Be Gone

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    The best way get rid of a mouse problem is to prevent one. Keeping the foundation of your home free of brush and trash, and keeping firewood well away from the house removes hiding places for mice.

    • Cover the dryer vent with 1/4-inch hardware cloth. Make sure to seal up any spaces around window or wall-mounted air conditioners.

    • Seal entry points, but don’t use steel wool - it rusts. Buy green scrub pads used for cleaning pots and cut to the right size. The pads must be secured to the sides of the hole or the mice will eventually pull them out.

    • A natural deterrent is peppermint oil; place drops of the oil on cotton balls and use them for closets and attics. You can make a spray to address these same spots using one tablespoon of peppermint oil and two cups of water. Grow peppermint plants near the entryways. You can use the mint in cooking as well. Mint spreads quickly so grow it in pots around your foundation to send mice scurrying.

    • If you are away for extended periods of time place scented dryer sheets on top of bedding to keep mice from nesting there.

     

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      Wishing Wells & Singing Springs

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      Most local homeowners depend on well or spring water. Our area has great water quality and quantity, but that doesn’t mean your spring or well doesn’t change over time.

      Most likely your water was tested as part of the home inspection process at the time of purchase. If that was longer than a few years ago, you may want to test again. Ask your plumber for their preferred testing method before deciding.

      Fortunately there are options. You can test yourself with a do-it-at-home kit readily available at hardware stores, starting at around $10. There are multiple online testing services to choose from - search for “water testing kits’” and take your pick. Just be careful to do your homework with the online services to make sure you get what you’re buying.

      The Torrington Area Health District offers a Potability Test Kit for $135, a VOC (Volatile Organic Compounds) Test Kit for $245 and kits for iron, copper, lead, fluoride, and radon ranging from $15 to $40.

      Keep your wells and spring a constant source of health by proactive testing.

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        Investing Your IRA in Real Estate

        I like to invest in things I understand – things I can touch. So part of my IRA is always in some real estate investment.

        If you have a SEP IRA you may want to consider investing part of it in real estate. Did you know that your IRA can purchase a property, just as it can purchase a stock or bond, and collect tax deferred rent? According to national statistics, real estate investors are currently averaging over an 8% return in rental income on their investments. Any long term appreciation on the property is frosting on the cake.

        Here in the tri-state area, annual rental rates for a 2-3 bedroom home range anywhere from $1,200 to $4,000 per month depending on the quality, size, location and amenities of the property. If you are considering this option, consult with your Realtor about which properties will give you the best yield on your investment.

        I have done this myself several times with excellent results. You need to remember that any real estate investment must remain "passive". You cannot use the property yourself or have a family member use it. The IRA must directly purchase the property or be part of partnership that purchases the property and you must pay for all expenses directly out of the IRA. Any rental income must go directly into the IRA. If you want to renovate and flip the property, all renovation costs must be paid out of your IRA.

        As always, the old adage “invest in what you know” is good advice. But if you want to diversify your portfolio, investing directly in real estate along with your stocks and bonds may be a good idea for you to explore. Of course, you should consult your tax advisor about your personal situation to see if you should consider taking advantage of this alternative investment.

         

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