What is the most important room in your home?

Okay everyone, it’s time for a pop quiz. Don’t worry, it’s only one question (although it might be tougher than you think!):

What is the most important room in a house?

The kitchen? The bathrooms? The living and dining rooms? When I take clients on a showing, those are the rooms they always ask to see. They’re also interested in the view, the landscaping and the age of the roof. But they rarely show interest in the space that is without a doubt the most important part of any home: the basement.

Surprised? You won’t be after reading this blog. I can tell you more about any home by looking at its basement than by touring all the rest of the rooms combined. Inspecting the basement is a lot like a doctor’s physical: it addresses all sorts of things that are not obvious on the surface.

If you have some knowledge of old buildings, looking at the basement can tell you when the home was built and when new additions were added. You can check out the size and spacing of the joists to see if the building was constructed well or whether the builder built to the minimum standard required. You can get a good sense of the age of the electrical system and amperage available. Is the boiler heated by electricity, gas, oil, coal or wood pellets? A glance can tell a knowledgeable basement spelunker whether the system is a hot air furnace or a boiler, which delivers hot water or steam to radiators. Hot water boiler systems can feed baseboard, radiant heat loops, or hydro-air hot water transfer coils as well as radiators. Once you’ve seen a number of old Newport basements, you can identify the telltale signs of flooding, and whether there are critters munching on your beams. It also becomes quickly clear whether the home uses city water and sewer or is dependant on a well and/ or septic system (this last can be a little trickier and can involve checking the yard as well).

And then there is the issue of MOLD (everyone’s favorite, I’m sure)! Mold is everywhere, but if there is lingering dampness in the walls and in the basement, it can create a problem that permeates an entire structure, emitting a distinctive odor and affecting sensitive inhabitants.

Most people have neither the expertise nor the interest to learn all they should know about the most important space in their home. Repairs here can be some of the most expensive you’ll come up against, in your time as a homeowner: they also tend to be much more time-critical. You can’t put off a failed heat system in the winter or a burst pipe any time.

Before you buy, take the time to really inspect the most important space in the house, and keep an eye on it after you’ve signed the purchase agreement. If you aren’t too familiar with basements and their workings – or even if you are – I always recommend taking a reputable home inspector with you.

Some illustrations follow:


 

1. Gas and water meters in an older basement (note the field stone and cement walls).

2. Updated PVC soil pipe leading out to either a city sewer system or septic system replaces what would have originally been lead or cast iron.  Notice the brick dividing wall coming out from the fieldstone foundation; also notice where the soil pipe has been cut off and sealed from what must have been a bath that was directly above or a floor above that.

3. Oversized, closely spaced joists with cross-member bracing speak of a floor designed for a heavy load or large span.

  

4. Long leaf yellow pine (hard pine) flooring over soft pine sub-flooring.  This is typical in many of Newport’s 19th and early 20th century homes, but very rare in newer homes.



5.  125-amp electrical panel with circuit breakers and a sub-panel labeled to indicate that it is running air conditioning.
6. And lastly, what keeps you and your pipes from freezing in the winter: a newer gas fired-hot air furnace, which probably replaced an older coal fired hot air furnace!

Renting Versus Owning Your Home: Which is Smarter Right Now?

In this uncertain real estate market, where so many people are feeling trapped by their ‘underwater’ homes, I’ve had a lot of folks telling me that they’ve made the switch from buyers to renters, and they’re never going back.  The reasoning behind this is that they are then free to move as the job market dictates, without being trapped by a collapsing market.  They can also look around and choose where they want to live if circumstances change – without the burden of having to sell the home and potentially losing equity and time, along with the stress of having strangers traipse through the house while it is listed!

Sounds reasonable, but let’s take a look at the other side.  Sure, we’re going through a severe market correction, but market corrections don’t last forever.  When the market is heading up, it’s nice to see the equity building in your largest asset: your home.  It’s only if you have to sell that you really feel the pain in a down or collapsing market.  The home that you live in doesn’t change its location or amenities just because its value has decreased, and you can put money and sweat equity into your home to make it a nicer and a more comfortable place to live.  You’re hardly likely to feel motivated to do that to your landlord’s property – plus, you can choose the colors you like and the changes you want without their approval!  Shelter is one of the three basic human needs (besides food and water), and I don’t see it going out of style anytime soon – one proof being that even our children are willing to move back and live with us under our rules because they have to have a place in which to live.

There are also tax advantages to owning your home.  While you cannot deduct the rent you pay for your living space, you can deduct interest charged against your mortgage and real estate property taxes that you pay.  Additionally, you have the security of knowing that the landlord cannot kick you out or raise the rent to outrageous levels if the rental market takes off.  There is some talk in congress about removing or modifying the interest deduction; with a down market and high unemployment, the last thing we need is an additional tax burden.  It might be a good idea to let your local representatives know how you feel.

Contrarians I talk to say that now is the time to buy, when everyone else is selling, but I would say you should only do it if you won’t get in over your head.  If you have the time, money, and inclination to purchase real estate, then now is the moment; otherwise, you might have to hunker down and ride this one out. 

I don’t think inflation and population increases -- which will eventually raise all our real estate values -- are going away.  The sci-fi image of desolated cities with squatters who are not paying rent, living wherever they can get in, is just that: a fiction and not a reality.  The reality is -- and I heard this on the evening news -- that they are offering homes in some cities to firefighters and police officers for $1,000 to encourage them to move into certain down sections of town.  The deals are out there and I can see inflation hitting us in the not too distant future.  This will be when the depressed and short sale housing you bought today will be worth a lot more money than you paid for it! 

Someone I know bought a nice co-op for $50,000 in Manhattan during the garbage strikes in 1974, when everyone thought that that was the end of the city.  That same co-op today, combined with the unit next door, was recently published as one of the top closed sales of 2010 for selling at $25 million.  Of course, my friend had sold in the 80’s when the apartment went for $1.5 million and thought he had cleaned up then.  Timing is everything!