The Finance Blogger


Upgrade Your Home – Window Replacement

Upgrade Your HomeWe decided to do a few posts on the general subject of home upgrades or remodeling. Consumers plan remodeling on their homes for many reasons whether it is just to complete repairs on various items around the house or to improve the sales value as you prepare your home to sell.  Many people also feel that before they retire they want to complete a lot of upgrades to their homes too.  When you upgrade your home, you can spend a great deal of money. Quite often they spend large sums of money on upgrades that may be premature and really not the best use of their money from a cash flow perspective.  We will examine this issue and several others in this post.

They feel that they will not have the money to do these things after they retire so now before they finish working  they have to :

  • Replace the windows
  • Replace the driveway
  • Buy a new car
  • etc

In other words get ready for retirement because they will never be able to afford it again. After all they will be on a fixed income and do not want any debts to be concerned about.. For some this is good advice, especially if you cannot deal with the mess of remodeling and you have lots of free money laying around.

However we would like to propose a different approach that maximizes your capital and helps you funds last longer. In this post we will talk about replacing windows , when you should do it and how many should be done.

Upgrade Your Home – Assumptions

The average 3 bedroom home will have roughly 10 windows in it and each window will cost on average $700 a piece or $7000 dollars to do the entire job.  Of course you can find cheaper windows and homes with more or less windows, however let’s use this as an average. Adjust these numbers to your own situation. This also assumes that you hire someone to do the work since most of us do not like to be on high ladders.

Alternatives to Replacing your Windows

  • Maintain existing windows as long as possible
  • Replace all windows at once
  • Replace windows only as needed

We will discuss each of these alternatives and the relative cost of each.

Maintain existing windows as long as possible

This alternative is usually by far the least expensive. If you have wooden windows, they will last a lifetime if properly maintained.  When the paint cracks or peals off, water gets in and the wood begins to rot. When this happens it is time to replace the windows.

Do it yourself or hire someone for $500 every two years to scrape and paint the windows will ensure that your wood frame windows will last for many years. Over 10 years your windows will cost $2500 if painted every two years. Most people will wait three years and if you do it yourself, your looking at almost zero cost to maintain your windows.

Replace all windows at once

Replacing your windows all at once gets it done and you never need to worry about windows again if you replace them with vinyl windows that have zero maintenance.  Of course in our scenario you have to spend $7000 immediately, but most people will rationalize that painting is a non issue and it increases the sale value  of their home. Still not everyone has $7000 to spend !

Replace windows only as needed

Another scenario that I personally like is to replace windows only as needed. Our windows on the west and south side of the house are more prone to the freezing and thawing cycles during the winter and as a result the paint peels off and the water gets into the wood. The sills rotted and we needed to replace these windows.

We replaced half of our homes windows at a cost of $3500, four years a go and the rest seem fine as long as the sills are kept covered in paint. I have $3500 to put to use on other expenses, however using the time value of money I have had the use of this money for 4 years and assuming an interest rate of 5%, that’s $175 in income every year for the past 4 years or $700.

That pays for a window, so I essentially get one window for free!

Some people will argue that you cannot get 5% interest income. Well four years ago you could easily and now you can get 4%, with rates forecast to go up next year.

Upgrade Your Home – Summary

  • Maintain existing windows as long as possible
    • Paint them yourself – $0, save $7000 for many years
    • Hire painters – $1500 @$500 each time every 3 years
  • Replace all windows at once
    • $7000 for our scenario
  • Replace windows only as needed
    • $3500 for half of the windows, maintain the rest, invest the savings, get one window for free from interest income

This is a simple straight forward scenario, however it works for me and I follow the last scenario as needed. Evaluate your own situation and make the decision that makes sense for your windows, your home and your financial situation.

Comments are welcome. For more ideas and thoughts about buying and selling real estate, click here.

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One Response to “Upgrade Your Home – Window Replacement”

  1. I like the idea of replacing the windows as needed instead of doing it all at once. sure you get the job done and the mess over with, if you do it all at once, but then why spend the money all up front!

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