Tuesday, October 13, 2009

Built-Ins are Bankable

Built-ins are Bankable:

You enter the dwelling space and you immediately sense that the owners have overreached. It isn't a matter of the size or the cost of the housing. The sparse furnishings suggest that the owners simply haven't the money to fit out their new digs.
The fact is that the cost of furnishing a new home is rarely factored into the total cost of housing. Typically new starts begin with a hand me down or two, play out a shabby chic style, or worse, go into more debt, at outrageous interest costs, to furnish a space. "Rent to own", credit cards, or furniture store credit is usually exorbitant.
If we are to develop affordable housing options we have to be mindful of the total livability cost of any space. So here are a couple of thoughts and strategies we might employ.

When I say that "built-ins are bankable" what I mean is that if the builder has included the banquette pictured at the top for example, it is included in the cost of the house and is wrapped into the mortgage. It is financed at the same time as the home and at the same interest rate as the structure. It is part of the structure and therefore considered "real estate". In today's market that means the cost of the money for the kitchen seating group was 5%. As long as we continue to provide tax reductions for interest payments on real estate, the interest is deductible.
Strategy number one has us influencing builders to include as many built-ins as we can imagine.. The pic above is from a book currently on Google Books. The cover itself is filled with possibilities.

Strategy number two involves people about to buy a new space and before they agree to purchase they develop plans for additional built-ins that they want included in their new home. If the builder is still on site it is probable he will welcome the opportunity to increase his return on the structure. If the original builder is not available then the buyer can contact an aftermarket retro-fitter and work out a building plan that is formalized and thus can be brought to the table with their lender. This movie shows a typical retrofit.

A third strategy has a person in their space and considering a refinance, or executing a part of a home equity loan. In both cases a set of plans and contracts for built-ins will be accepted as a bankable home improvement. At times like these, "cheap money" suggests the time is right to increase your "relatively cheap" home line of credit rather than getting killed by your credit card rates. So consider beds, closets, book cases, entertainment centers, cupboards, storage chests, shop benches, the list goes on. Built-ins are also the key to maximizing small spaces and making them functional. THINK BOAT.

1 comment:

  1. Take a look at pictures of Frank Lloyd Wright’s Taliesin West (plenty of pics on Flickr) there are tons of built ins: seating, shelving, partitions, tables, everything. It allows for far more capacity than the place would otherwise have.