The Financials Behind Owning a McMansion Today | The Frugal Gene (2024)

This Martin Luther King Monday is our official, guilt-free, lay around the house like a lazy cat day. For the few golden hours of waiting for our laundry to finish, my husband and I sat on our used sofa aimlessly browsingoursmartphones and news feeds.I was reading the new posts of a popular blogger that goes by Kate Wagner over at the humorous and snarky, McMansion Hell. She critiques drunk architectureand design.Either field in which I have experience in yet it has never prevented me from giggling non-stop at her commentary.

After the laughter stopped, it got me thinking about the finances of owning a McMansion…

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ALL photos (and its respective rights) were taken fromKate viaMcMansion Hell

What is a ‘McMansion?’

It is the supersized McDonald meal equivalent of a traditional house. A McMansion is an emblem for Americans who like everything supersized, like a certain fast-food giant that we all know. McMansions show no concern for build quality and they’re often finished quickly for as cheap as possible.

McMansion usually has 4 or more bedrooms, multiple baths, high ceilings, and several garages.

The usual McMansions are ostentatious in size, ranging from at least 2,500 square feet and beyond depending on the mass builder’s budget. Now this 2,500 depends on region, in San Francisco it’s considered huge but in Texas 2,500 isn’t considered oversized.

Given how many MLS listings I’ve browsed and stalked through over the years, I can say they average McMansion hovers around 3,300 square foot in our neck of the woods. So if you want my definition of McMansion by the square foot, I must say it’s anything above 3,300 in the Pacific Northwest.

McMansions usually ignores the fundamentals of sound build & design. McMansions & McModerns are the fast fashion of the real estate world.

Most famously McMansionsfeature mismatched windows, cheap foam details, sticky tacky designs, stucco sidings, fake balconies that lead to nowhere…and columns for pretentious aesthetics rather than…holding up proper weight.

McMansion History

‘It’ came from California. Mystery solved. It was built for the stuff obsessed Baby Boomers during the 90s leading all the way up to until the housing market fell out in 2008.

The most famous McMansion in America is called ‘The Versailles House‘. It is a 90,000 square foot “single-family home” in Orlando, Florida. “The Queen of Versailles(trailer)” is one of my favorite documentaries and it’s on Netflix, it’s excellent, watch it and thank me later everybody!Now despite the name, it has very little to do with French history. But it was entertaining to peep into a realm of thought so different from the rest of us that read personal finance.

‘Queen of Versailles’was a big hit at Sundance due to the timing of filming that began in the mid-2000s and ended at the start of the 2008 housing crisis. I’ll write a more in-depth review of the documentary someday but if you have a few hours to spare, I highly recommendeveryone to watch it for amusem*nt. The film and interviews really do grow on you. The wife was a formerbeauty queen and the man-madehis fortunes selling timeshares in Vegas to…people who think it’s a good idea to buy timeshares in Vegas.

Safe to say nobody in personal finance should be interested intimeshares or McMansions so let’s move on.

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Financial Breakdown of Big Homes

“Foreclosed McMansions are the eeriest reminders of how fleeting paper wealth can be.”1 I couldn’t have said that better myself. Here is my financial breakdown of living and owning a McMansion using statistics of these giant structures of gaudy facade.

Big List Price

Builders love to build McMansions because they fetch a higher price and give them a bigger return on investments. There are molds builders can generate that will produce several McMansions with similar aesthetics for greater returns. But the savings are rarely passed onto the consumer. Due to the McMansion size, they tend to be on the higher end of any market despite the lack of quality. Due to the sheer size, unknowing home shoppers step into the “this is a great price per square footage” excuse.

Next thing you know, hello jumbo mortgage loan with a side order of PMI.

Future Home Investment Potential

McMansions are too young to know their future as investments but spidey senses tell me this will not end well. McMansion values dropped considerably during the 2008 housing crisis in comparison to traditional single-family homes that were taking similar (but less steep) stumbles.

McMansions are not made to endure inevitable economic downturns and they are the farthest thing from liquidity.

They are big, chunky, and not made with the greatest quality construction since they are mass produced.

A McMansion owner is limiting themselves to a certain demographic that is very narrow in the first place with the sheer size of the structure.

McMansions are also often built away from prized land and popular zones because of their size. They are often built in the middle of nowhere due to their sheer size when millennials and Gen Xers are looking for amenities nearby like the rise of urban hub centers.

Taxes

Unless you have 8 children and both sets of grandparents, most people with families will not find 100% efficient use for a home that sizes in at over 3,000 square feet. That’s too bad but the add-on value and land lots are still taxed the same by local and state governments. Whip out those wallets, it’s the house that keeps on taking.

Maintenance and taxes are just some of the few things that homeowners usually overlook when buying a bigger house. The average annual of maintenance is 1% of the home price, which is means bigger maintenance cost for bigger houses. The property taxes are at 1.3% of the home price, which will once against cost more in bigger houses. According to Investment Zen, for over 30 years, at 4% mortgage, a 2,500 sqft house will cost an extra $602,871.

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Home Maintenance Costs of Jumbo Oversized Houses

McMansions are huge. They werebuilt in the 90s during the era of looser building codes. There was not much homage to basic design or material. This will eventually cause pricey problems down the road. Once again, McMansions are too young to know their own futures as things get inevitably older but I’m betting my money the foam and sticky toppers glued onto the house won’t last past a decade.

OH, and the roofs – the roofs are massive. You need to replace those one day – unless you move – but you might have trouble dumping it on the next guy.

See Also

Conditions Of Reciprocity about Real Estate Between Italy And Other Countries – Govoni Law

A good house has strong bones to survive a century if you so cared to pass it down to the next generation. They are uniform and adhere to the principles of design which are timeless in beauty.

Utilities Associated With Big Houses

Utility costs vary depending on location but on average, a 4,000 square foot house for a family will be hit with a $400+ monthly bill for gas & electricity only. Water, heater, etc. data not included. Those massive window holes, in case the mortgage interest wasn’t enough, you can also try to heat & cool one of those house bloodsuckers. Try not to go bankrupt.

Electricity Consumption

Before you consider upgrading your house into a 3,000 square foot or more unit, consider how the increase in footage will affect your electricity consumption. With more area to cover, there will be more electricity consumed for various types of activities: more lighting, heating, appliance usage, etc. If you can still comfortably live under your current house, then there’s no need to upgrade, unless it’s from a safety concern.

The US Energy Information Administration states that the average monthly residential electric bill was $111.67 in 2017. With data from EIA‘s annual household site end-use consumption in 2015, the average monthly electricity cost for houses with 3,000 sqft or more is $141.96. Both the amount is expected to have been increased in the past years.

Electricity Expenditure

With an average price of ¢12 per kWh.

[Data]

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Heating Consumption

Heating is another part of the usual household expenses. Depending on the season, the heating (or cooling) costs can take a huge portion of an average family’s monthly income. Depending on the type of fuel used, a single household can spend hundreds at the least and thousands at the most expensive option. In Massachusetts alone, natural gas is estimated to cost $983 for a winter season. The most expensive option is heating oil with $2,359 expenditures.

According to the US Department Of Energy, space heating is the largest energy expense which accounts for 45% of the energy bills. Heating expenses will increase the bigger the house area is because greater energy is needed to distribute heat in a bigger space. With more open space, the heat is not distributed efficiently.

Water Consumption

Water used to not be the problem in most of the locales in the country. However, the water consumption price started to climb in the past seven years. According to Circle of Blue, the water consumption per month can range from $29 (in Memphis) and up to $154 (in Santa Fe). This is for a family of four that uses 12,000 gallons per month (or 100 gallons of water a day per person). Not to mention the additional cost of heating and cooling the water.

According to the Water Calculator, the biggest water users are toilets, showers, and faucets, accounting to 24%, 20%, and 19% respectively. With a bigger house, expect more usage especially in toilets. Maintaining bigger gardens, cleaning bigger rooms, and more toilet usage can get a toll on your monthly budget.

In addition, more water consumption means a larger sewer bill to pay. This expense is calculated based on the amount of water a property used, so it would typically be in line with your water use. According to Move, sewer prices and fees rose even faster than water bills.

Garbage, Sewer, and Trash

A bigger house will also mean more waste and more cost to handle. Garbage pickup can vary depending on your location and the amount of waste your household produces. In Seattle alone, 12-gallon micro-can worths $24.25, with higher options like the 96-gallon cart costing up to $115.90.

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Law of Averages in Real Estate

The great real estate advice that I’ve ever heard (and regrettably didn’t take myself) was to “buy the worst house in the best neighborhood you can afford.” Besides the location, location, location mantra – that is probably the best real estate advice one can give. Time and time again, I’ve observed this to be true. Logically, every neighborhood has a price average – like a spectrum within a band that it lands in. The biggest home on the block (the McMansion) will be weighed down by the law of the price average since most of the other older, smaller properties will be pulled up by the average in a given neighborhood.

Non-Finance Issues With Jumbo Homes

Let’s pretend money was no object. Would someone who is financially secure benefit from owning a McMansion?

Perhaps, if they like to be half a Siberia away from their family and having to walk 10 minutes to the other end of their house to ask a question, then yes they will do just fine.

Let’s not forget the utter wastefulness of materials and wealth to build that monster just for a family of 4 to live in pseudo, overproduced luxury.

Conclusion

McMansions are pricey, hard to sell, harder to heat, harder to maintain and create a bigger tax bill for less efficiency.

Plus, your direct neighbors will hate your ostentatious snobbery. Chances are you have blocked their natural light and views with that monster structure of yours. I believe this McMansion & McModern epidemic is happening because not everyone is aware of the massive downsides associated with the thoughtless monster wallet eater. ?

The McMansion does not make financial sense. It doesn’t even make architectural sense. Many Americans are pretty terrible with their finances and this is another hallmark representation of that.

We like the hamburger but we don’t want to see how it’s made.My biggest issue is the actual square footage issue. The square footage issue launches a bunch of other issues related to the hefty ongoing cost of owning a McMansion in the first place.

~

1. https://www.washingtonpost.com/lifestyle/magazine/why-we-love-to-hate-mcmansions-but-still-buy-them/2017/01/18/434462ae-c622-11e6-8bee-54e800ef2a63_story.html?utm_term=.35adfda00e13

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