Would this be Considered Penny Wise and Dollar Foolish?
There was a neighbor who lived across the street from me for about 7 years. Like me, he lived in the community because of the strong school system. He was somewhat of an introvert and he and his family primarily kept to themselves. He didn’t spend much time maintaining the inside and outside of his home. Why not?
He mowed his lawn once every 10 days whether it needed it or not – sometimes it grew to about 10 inches in length and after he was done, it looked like he could create bales of hay from the grass clippings. Once each year, his wife would literally squat around border areas and use large, shrub clippers to do grass trimming. I never had the heart to tell her that tool was being misused. Perhaps they knew something I didn’t. He had his roof repaired only after water was found in his attic – I was afraid to ask if he found puddles or something greater inside his attic.
Sadly, his only child graduated from high school about 4 years ago, she went away to college and never returned permanently. A few years later, he put his home up for sale. The ‘for sale’ sign is still in the front yard.
From my vantage point, he treated nickels as manhole covers. Perhaps he saved money over the years by not replacing his windows, or painting his deck or making any other improvements in his yard or inside his home. Perhaps he saved hundreds of dollars over the years by doing this. Perhaps even $10,000 is a possibility. One might say he didn’t treat his home as an investment.
Unfortunately, he may not have realized the housing market was going to be so rough for the last 3-4 years. Fixing up one’s home as much as possible over the years could mitigate the amount of time it might be for sale in such a depressed market.
Let’s do a little math. Paying between $7-10,000 per year just in real estate taxes, that expense alone would cost him about $15-20,000 at this point, his house is still on the market. Not sure if he’s refinanced over the years so it’s difficult to say how much he’s also paying in mortgage payments but it’s safe to say, it’s probably at least equal (if not more) to what he’s paid in real estate taxes.
Even though the real estate market has not totally recovered and the market is still challenging, homes in our neighborhood sell in less time than other neighborhoods, towns, or cities. In other words, why hasn’t his sold at this point?
Even if it sells soon, his total expenses incurred for his unoccupied house might be in the neighborhood of $35,000. If he had spent a few more thousand to fix it up over the years, he may have reduced how long it would have been on the market? Or is that just pure speculation?
Would anyone consider that Penny Wise and Dollar Foolish?