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How to turn your villa into a nightmare By Ranit Nahum-Halevy Tags: Economy Gal (not his real name) was fed up with dumping his hard-earned cash into the pockets of landlords demanding high rental fees in Tel Aviv. He therefore decided that, instead of wasting his money on renting a poorly-maintained apartment, he would invest it in the purchase of an apartment. Four months ago, he did just that and bought a three-room apartment on Pinsker Street in Tel Aviv for $270,000 ("A real bargain," he emphatically states). But then he went one step further and opted to make improvements by breaking down walls, replacing doors, connecting rooms and remodeling the bathroom. He is still renovating. The kitchen and bathroom are disaster areas, and so are the floor and ceramic tiles. All the shattered fragments are on the floor, and a bathtub sits in the middle of the living room, as if it were a piece of furniture. The bathtub is used by contractors when they need to relieve themselves. Gal admits that, although he thought he had cut a great deal on the renovation work, he did not take into account all the costs involved. "I didn't consult with any experts. My budget estimate was that, when all the work was finished, including the purchase of new furniture, I would wind up with a bill of NIS 30,000 bill, but now I realize that the work is going to cost much more. In retrospect, I should have increased the amount of the mortgage and let the professionals do most of the work. Right now, I'm trying to do most of the work myself. I haul the materials myself with my own bare hands, taking them upstairs to the apartment; I sandpaper the ceilings and doors, removing paint with an industrial heating fan, and then repainting them. Everything costs money. For example, I managed to save NIS 8,000 on the doors alone. All this takes up a lot of my time and I work primarily on weekends. I don't have much oxygen left." Advertisement Gal is only one example of people with big dreams who decide to remodel their home or design and build their home from the ground up but who, at some stage, find themselves accumulating heavy debts that force them to increase the amount of their mortgage, negotiate a loan with their family, liquidate their insurance policies, change plans and, ultimately, cut their expenditures on furniture and maintenance. In many cases, the result is the skeleton of a two-story, single-family dwelling (cottage in modern Hebrew) or a detached or semi-detached house whose garden is untended, whose furniture is makeshift and which does not even have light-bulb sockets. Zvika Ross, a father of three, had, until recently, enjoyed his one-story detached home and large garden in Tzur Yigal, about 25 kilometers northeast of Tel Aviv. Ten months ago, he decided to expand his home and build another story. Ross unfortunately hired an inexperienced architect, while one of the contractors ran off with his money and a supervisor served more as a mediator than a supervisor, with the result that his expenses increased dramatically: He started off with a planned budget of NIS 200,000 but the actual expenditures increased by another NIS 300,000. The fees paid to the municipality totaled NIS 15,000, a sum that he and his wife had not even dreamed of ever having to shell out. In view of the situation, the couple had to negotiate an additional loan from the family and increase their mortgage. Furthermore, they were forced to cut back on the renovations to the home's interior. Ross became the project's entrepreneur, contractor and supervisor; today, he is also implementing the construction plans. "We paid three times for architectural plans and I had to replace the contractor 10 times," he says. "As a result, we consciously kept the renovations to a minimum and we moved in without finishing all of them. We did a lot of work ourselves, after we researched the matter and found a shop that was willing to sell us components at a low price. Today, we live with unpainted doors and door frames; we still don't have a garden; there are no light fixtures on the upper floor; the children don't have air conditioning in their rooms and only recently did we install telephone lines and link ourselves up with the electric power grid." "The heaviest expenses are the final finishing touches on the house: the carpentry work, and the purchase of the doors, the furniture and the kitchen, but the death knell is the lighting fixtures - that is where the money just runs out," explains interior architect Ariela Schneour. "People who acquire or build a villa must invest in suitable furniture. The front door alone for a villa costs NIS 15,000, while each interior door that is of high quality costs NIS 3,500. Of course, you can always compromise and buy a standard door for NIS 1,000 or less, and, in many cases, you see patchwork construction jobs. When people realize that they no longer have enough money to buy the expensive front door they had planned on acquiring, they ask the contractor at the very last minute to downsize the door-frame and to reduce the height so that they can stay within their budget, because a door frame costs less than the luxury door." According to Schneour, the sky is the limit as far as prestigious finishing work is concerned. Thus, for example, a sliding door that goes inside a wall cavity can cost NIS 4,000 or more. And the same is true for the design of bathrooms. You can build a bathroom for NIS 20,000 or you can spend NIS 200,000. You can build a bathroom with a spa, a Jacuzzi, an enamel- or tin-coated bathtub, and a massage system, or else you can install a simple shower stall. "You have to define your expectations," continues Schneour. "You can install many things and then wind up not using them. In many homes, the Jacuzzi is dry, the spa does not work, etc., and all these unused appliances become a breeding-ground for bacteria and create a health hazard. The same is true for high windows. Many people want huge windows with aluminum frames, without realizing how expensive the installation and maintenance are. You have to hire a mountain climber to clean such windows, and thus we are talking about an additional expenditure. "The investment can also be considerable when we talk about the kitchens. Today, when the kitchen opens up into a central open space, it becomes a major arena for entertaining guests. In many cases, when people find their money running out, they go off to Ikea and buy something cheap, trying to save money; however, they know that they will have to replace that item in another two years." In Schneour's opinion, it is better to have one less sofa than to give up on the idea of a large painting on a giant wall or on a sizable investment in curtains and lighting fixtures: "That is what really 'dresses up' an apartment. You 'paint' your house with good lighting, you decorate it with pictures, and you give it a luxury look with quality curtains. Walls in a large apartment deserve a quality picture, and, if you do not include that item in your budget, you will end up with a big bare wall." In some cases, when people begin to run out of money, they will try to save by cutting down on various items, such as gardening, the swimming pool, the front gate and the fence at the home's entrance. "You see many homes today with an untended garden, rocky ground, a dry swimming pool and an absence of foliage," adds Liat Novak Eliav, an attorney and the CEO of the House Sitting management company. Many people do not take into account the cost of maintaining a garden, which includes an external fence and an entrance gate to the house itself. For instance, the cost per square meter can range between NIS 250 in a build-your-own-home project or on a do-it-yourself basis, and $5,000 if you hire an artistic ironsmith. Furthermore, garden furniture is part of the household budget and the estimates are that the cost can range between NIS 20,000 and NIS 250,000 on luxury furniture, including a barbecue patio, chairs, a coffee table, infrastructure for TV and perhaps also sunbathing lounge chairs and a spa. If you are interested in a swimming pool, you should take into account the costs involved - for cleaning and maintaining it, for chemicals and a pump room - which can total NIS 1,000 monthly. People who have constructed balconies in their detached or semi-detached home may find that, in addition to them being superfluous, the balconies are scarcely used, because the house already has a garden; however, the ongoing maintenance of such balconies includes sealing them to keep out moisture from rainfall. "In theory," continues Novak Eliav, "everything looks perfect. But you must translate every item into shekels and agorot. People love to fantasize about an aquarium, for instance, but they forget what expenses are involved. After you buy your home and the furniture, you have to start worrying about maintenance costs. This is an ongoing expenditure that can be quite costly. I am talking here about municipal taxes, electricity and water. "Many people want to lead the good life and often they desire to do so out of a sense of competitiveness, because they want to plug into high society or because they want to make their neighbors envious." Yair Golan, owner and business manager of the Gefen Real Estate group and a budget consultant with the Israeli Building Center, recommends that you should always add $20,000 to $30,000 on to your original estimate when budgeting these projects: "Many people forget to include in the budget such items as interior decoration. The result is that, when the money runs out, you end up increasing your mortgage or compromising on the contents of your home." Golan emphasizes that, even when you hire a development contractor, who will build your home from top to bottom for a predetermined cost, you must take into account unanticipated expenses: "As experience demonstrates, even when you work with development contractors, you cannot avoid going over your budget. Your development contractor may have come to an agreement with you on a certain price; however, whenever you cut corners, you undermine the project. Similarly, some factors change as the project develops and there also might be some unclear points in the contract. Any additional expense, no matter how small, will cause you to go over your budget and that can mean anything from putting in more electrical sockets to paying for the technology involved in sealing basements; these items are not factored into the quote you received from the contractor and, in the end, the client has to pay more than was bargained for." According to the Building College's director, Israel Pasternak, many of those who decide to make their dream come true and to build a detached or semi-detached home on their own find themselves, after a few months of construction activity, with a series of delayed starts: "A large number of people choose their prime construction contractor because of the low price that the contractor is offering, and they make their choice without bothering to ask for references or without verifying whether this contractor is licensed. In such cases, if the contractor gets into serious difficulties, any mistake that the contractor makes will have to be paid for by the client, even if what is required is an error caused by the contractor. Sometimes, we are talking about an additional expenditure of tens of thousands of shekels. In most instances, the family's equity is used up in the purchase of the lot and then the family must start using external capital such as a mortgage or a loan." "Sometimes," explains Adanim Mortgage Bank CEO Zvika Livneh, "the cost-of-living index rises as the construction work is going on. It can take a year and a half to complete the structure from the time you have purchased the lot, and, during that period, the prices of cement and iron could increase. You must carefully examine what equity you have and only then can you conclude how big a mortgage you will need. We are always encountering people who ask for a short-term loan but who, after a brief while, come back to us with the request for a larger mortgage. We recommend to them that, in the early stages of their project, they take suitable reserves and a larger mortgage, in order to provide themselves with a safety net." Livneh's bank provides mortgages for any purpose whatsoever, including the purchase of furniture or maintenance expenses, but the most important piece of advice that the bank provides is that clients should negotiate a graduated payment mortgage, which provides access to the mortgage money in stages according to the progress of the construction work, so that clients will not be tempted to take out a loan for the entire sum all at once. Bookmark to del.icio.us   Shimon goes green Peres says to fight terror Israel should reduce its dependence on oil. Voices of heroism IDF releases audio recordings from famed 1976 Entebbe raid.

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