Intangibles, short for intangible assets, are what economists and accountants call things that are not easily measured, valued, or counted. In life, it is the intangibles that matter.
Summer-like weather has me thinking about the reasons I work hard, save hard, and invest. My home has tangible value, and has appreciated in spite of the rough housing market. The intangible aspects also have value to me. Planting trees and watching them grow, year after year. Maintaining my yard, and enjoying the first emerald green grass of the year. Watching the flowers and flowering bushes come out in their sequence. And of course, enjoying summer parties in the backyard.
I enjoy my modest home and the myriad home improvements I have made over the last decade. Not only has been a reasonably good investment, my home has made me feel a greater connection to my community.
When I bought my house, I was approved for a much larger mortgage. But I insisted on buying a cheaper house. My first real estate agent kept showing me homes 10 of thousands of dollars above my price range. After a couple months of that, I fired him, and selected another agent. My next real estate agent actually respected my price range… only going over by a few thousand dollars, under the idea that we could make a lower offer conforming to my price range.
It worked. After another several months of near misses, I found a house I really liked and offered $2500 below the asking price… valid for 24 hours. After about eight tense hours at a friends house, my realtor called and said that the sellers had accepted.
For the last couple years I’ve been thinking that I’d like a larger house, with amenities like a 3-car garage. We’ve even thought about buying land and building a custom home and looked at a few lots. But so far I’ve resisted, partially because real-estate commissions and seller-side closing costs could eat easily up $15,000 of net worth. In-town moving expenses would probably add another 3,000 dollars, and buyer-side closing costs (assuming we buy rather than build) another 7,000 dollars. Something like $25,000 down the drain to step into a new, upgraded dream home.
So the plan is to stick it out in the current home or another 5 or so years. In order to enjoy it more we continue to make upgrades large and small. About half of the upgrade work is DIY, the rest we contract out. The return on investment for DIY work is probably 200%, the work contracted out will only pay back 50-60 cents on the dollar.
There is something nice about working on the home. A sense of progress and accomplishment that is enjoyable.
I keep telling myself the cons of buying a dream home for twice the cost the current home. Property taxes will double, utilities will go up, real-estate commissions and other costs will eat up a big chuck of equity, moving will be a hassle, etc. And of course, do I want to live here for the next 10, 20 years? Hard to say. Until I make the next big move on the housing front, I plan to delay and enjoy my current home and neighborhood. Take some walks, host some parties, and do some gardening. Enjoying the intangibles of home ownership and try not be to hasty in my desire to keep up with the Joneses.