We're still working on the house project. Quick summary:
- My wife's parents live about 20 minutes from us, in a 40-year old steel frame house.
- We first considered knocking their house down and building a two-generation house so we could live with them, but this didn't work out for a number of reasons.
- Now we are thinking about renovating their house so it is more comfortable for them and so we have some space if we need to stay with them.
- The house is already in my wife's name and we'll pay for half of the renovation.
We had another series of meetings with Ishiguro Architectural Workshop. Things were dragging on a bit, so I asked them to price out three options: just insulation, insulation + redoing the interior, and the full monty.
Option 1, just insulation, includes insulating the walls, floor, and ceiling, changing the front door, adding interior double windows, and changing the bathroom. It comes to 8.3 million yen.
Option 2 is basically option 1 as well as a complete interior remodel giving us a more senior-friendly floorplan and a nice space upstairs for my wife and I (or other visitors) to use. This comes to 15.9 million.
Option 3 is the first two options plus increasing the airtightness, a new heating system, ventilation system, and thicker insulation. It comes to 18.9 million.
IAW seem to specialise in custom interiors, so asking them to do option 1 is a bit of a waste. They also seem to want to do the interior, and are very proud of their past jobs (they keep encouraging us to visit their previous projects).
I think we're going to go for the full-spec job on this, so I expect we'll end up paying around 10 million yen (half of the total). This doesn't make much financial sense to me except that it is something my wife wants to do for her parents, and so that is good enough for me. 10 million is also a lot less than the 23 million that would have been our half of the new-build price ;)
We also have to think about how to pay for this, basically either with cash or by taking out a loan.
I've spent a long time arguing about this with frequent contributor DA and in this instance have decided he's probably right. Instead of taking out a loan for our share of the 10 million (I found a special deal for public servants which would lend us 10m at 1.3% for ten years) we will instead sell some shares to do so.
In fact I sold the shares last night. My wife had a TOPIX index fund that was up 44% so instead of risking the value falling before we need to pay for the house later in the year we are going to cash instead.
If you will need money in the short term (1-2 years), or the medium term (up to five years) it may not be a good idea to invest it in the stock market. You might lose out on some profits, but you avoid the risk of losing money just before you need it.
We may or may not end up living in the house eventually (although I suspect my MIL will outlive me), but it is in a wonderful location on the edge of a public forest. It would be a very pleasant place to spend weekends and lazy summer mornings.
What do you think? Do you have experience of renovations in Japan? Any advice?