At what point does a dream turn into a nightmare? Or is that too dramatic, what about, at what point do you say of your dream, nah, give it up it’s just not practical / sensible? When do I move on to another more achievable dream?
Those of you who have read this retirement blog in the past might be aware that my dream in this instance is the building of a cabin in Colorado on a piece of land that we have owned for about 30 years. In fact some of you will be sick of hearing about it especially as it seems to remain just that – a dream. No progress just an ambition floating round mostly in my head never to be realised. So apologies to those of you in this second group. Maybe you should stop reading right now.
All I can say by way of justification for this, yet another dream cabin blog, is that this last week I have made a concerted effort to move this project forward. So much effort in fact that this retirement blog could almost be in the ‘writing as therapy’ section of the blog. I have put a lot of my mental health into trying to move things forward.
The effort has been in the form of literally countless emails, texts and phone calls to people with financial expertise – Ben, Eddie and Craig, a log cabin home builder called Ned, prospective neighbours via their Facebook page, the local property owners association, local log cabin resort owner*, estate agents, discussions with relatives and so on.
It’s difficult enough trying to work out what’s the best / right question to ask and then to ask again – and again, when you don’t quite get the answer you needed. I’ll cut right to the last question I need and still need an answer to which despite at least three attempts all to different people, I haven’t got as of the time of writing (Friday).
It’s a relatively simple question in the scheme of things. What is the minimum size of property allowed by the association? I know there is one because I’ve read it in the past but irritatingly I’ve forgotten it. As the viability of the whole project rests on this figure in that size dictates price and price is what the whole thing rests on, then I need to know this figure before proceeding any further. Phew exhausts me just writing it but at least from a therapeutic point of view, it’s out there now.
But here’s the other thing, this question is just one in a long line of questions. The first of which was how much was this going to cost us given a certain size of cabin? This part of the equation required about a dozen emails with a log-cabin builder I found on the internet. I suppose when you read words like bespoke and unique and hand-crafted, you know you probably got the wrong builder, but I’ve started so I’ll finish, although it’s not really a finish more like a start.
It turns out there are two terms to understand – dried-in and turn-key. The first means you get just a shell and the second means it’s complete and ready to walk into. They like to give you the price in square feet which is fair enough although even getting these figures took a while. $150 to $375 for these two figures in case you’re interested. Oh, and while the second includes foundations, it does not include services – water, power, septic tank etc.. I think we could probably get cheaper but that means more research, more emails back and forth.
You might get an idea of how complicated it’s getting but this is nothing compared to the financial side of it all at this end. You see the slight hitch to this project is that we don’t have anywhere near enough spare cash to just go ahead and build it.
I’ll give you the short version of what’s happened. It seems after many phone calls and conversations with financial advisers / salesmen, we have three ways of raising money. First, equity release. Second a buy to let mortgage on our Derbyshire house and third, at the time of writing I’ve forgotten what this was except as I recall it wasn’t much of an option.
Again the short story of these, now, two options. Equity release is regarded by some financial advisers as the work of the Devil’s spawn. This on the grounds that the interest repayments which you don’t pay at the time only when the property is sold, usually because you’ve cacked it, are very expensive. For example if you borrow £100,000 and pay it back after 10 years you pay back an additional sum of about £35,000. Apparently this causes particularly bad feeling among children who were expecting a tasty inheritance when parents shuffle off the mortal coil only to find that their parent/s have spent the money and the equity has been used up on failed gambling, dodgy investments / business schemes, luxury holidays or any (name your sin) way of losing money that an elderly parent can conjure up.
I have to say I was shocked at the cost of this form of funding although it’s attractive in other ways. Which leaves us with a buy-to let mortgage which we can apparently get even though we are of quite an advanced age. The downside to this is we have to get rent from the Derbyshire house and hence wouldn’t be able to use it as a holiday cottage as we were doing before Covid struck.
For this to work, financially as opposed to emotionally, you can borrow three-quarters of the value of the house and the rent has to cover the mortgage repayment. According to the figures we’ve got so far, this second part will work but only if the cabin is of a sufficiently modest size, and hence cost, to build.
So that’s part one of this retirement scheme and 1,000 plus words. It’s helped my tired brain to write at least some of this adventure out on ‘paper’.
*When I finished writing this having assumed that this person was not interested in any partnership arrangement, I got an email from them asking for more details. Watch this space.