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The true cost of home ownership can be quite complicated and confusing.  In a city such as Phoenix the trend has largely been towards the lowest dollar per square foot purchase prices possible.  Only in real life this almost never results in the lowest costs to own a home.  Not to mention the poor design, clumsy and uncomfortable living environment that results.  Further, the cheaply built or remodeled home also leads to unexpected, expensive and stressful maintenance nightmares.

So what’s the alternative, the desert is just really hard on houses…right?  Well not so much.  There are some obvious no-nos that are just asking for trouble but if you use common sense and spend a lot of time working through the details Phoenix can be home to some of the most durable, comfortable and easy to live in homes in the country.

Comfort is for another conversation and today I’d like to focus on the true cost of home ownership, beyond the mortgage payment.  For easy comparison we will convert all costs to equivalent monthly payment value in a 30 year mortgage at a 4% interest rate.


Everyone’s favorite topic of discussion in Arizona; our fantastically inexpensive water and the never ending fight over rooftop solar/the unknown future costs of electricity.  It’s no secret to anyone who’s lived in Arizona for a few years that summer electrical bills can be astronomical and even keeping that thermostat at 82 degrees doesn’t offer a lot of financial help.  We focused on 2 things here;

  1. Build a home that offers minimal financial punishment for setting the thermostat to a comfortable level.  With smart passive solar design, an airtight shell and 24 hour fresh air with heat recovery every square foot of your home can stay perfectly comfortable all day, all year with minimal energy penalties (and no need for ceiling fans!).
  2. After building an exceptional “box” we added solar panels to offset the energy use.  The system is sized to generate as much power as the home uses over the year.  The swing of summer power use is also minimal since the load on the cooling system is about 25% of a standard new home and as low as 10% of an older block home.

Our 3rd party calculations show our efforts save home owners about $150 (compared to a new “energy efficient” home) to $300 (mid century block home) every month while giving a more healthy and comfortable living environment.  That’s an added value of $30,000-60,000 in monthly electricity payments alone over a 30 year mortgage.

Our homes also use about half the water of an average 1500sf home and are xeriscaped with a drip irrigation system that can be turned off once plantings are established in a year or so.

maintenance and updates

The general rule of thumb for home maintenance is about 1-2% of the purchase price per year for a newer home and 2-4% for an older home (think a generation old or more and needing major updates).  For a $400,000 home this is anywhere from $4,000-16,000 a year!  This seems astronomical until you do the exercise of adding up the real costs of everything from routine maintenance like landscaping and cleaning of ductwork and dryer vents to major upgrades such as new kitchens, windows or plumbing.  We did this exercise and found 1-2% to be fairly accurate for an average home not needing any major updates or suffering from any catastrophic failures.  This does include replacement of appliances, heating and cooling, roof, siding, flooring, ect.  Throw in a major unforeseen issue each decade and 3% doesn’t seem uncommon, getting to 4% might be approaching Tom Hanks in The Money Pit.

Throwing money out (or into) the window sucks.  Here are a few of the major things we did to keep our owner’s monthly bills going towards their bottom line and not into pesky maintenance bills;

  1. A better shell  | There’s no doubt that the most important (and most often overlooked) part of a house are the exterior walls and roof.  Building these better doesn’t take materials from NASA but it does take a little rocket science.  The past few decades have given the building industry more data and research than you could imagine to validate concepts that some builders have been preaching since the early 70’s.  A properly built shell keeps the outside out and the inside in and performs well in all conditions of that climate.  All too often a structure performs decent 95% of the year and then fails miserably during the other 5% (like during a monsoon in Arizona).  This sacrifice of the 5% causes massive and expensive failures, not to mention the pain in your butt to deal with getting it fixed and the anxiety of when it might fail again.  It’s hard to put a number to this but lets say $5,000 per decade or $40/month, we’ll leave out the interest charge of having to put that unforseen $5k on a credit card.
  2. steel siding |  Our siding is a custom designed rain (or “heat”) screen of raw steel.  This design has a 1″ gap to both let heat vent (keeping the radiant energy off the actual insulation) and create a low pressure area so any moisture that gets behind the siding can properly drain out.  This is especially important during a monsoon when an often catastrophic combination of water, heat and sunshine can quickly destroy a poorly designed wall (think stucco on foam or sheathing with no drainage layer).  The steel has the added benefit of never needing to be painted as the rusted patina protects the steel making an almost indefinite lifespan.  This siding might  need to be replaced once during the lifetime of the building.  We are also somewhat fond of the natural patina “living finish”.  We save our owners $2,000-4,000 a decade in not having to paint in addition to $10,000-15,000 every 25 years or so in not having to re-stucco or re-side the house.  We’ll throw in the cost savings of not having to maintain stucco for free.  Savings of $50-100/month.
  3. polished concrete flooring  | I only know of one flooring that needs no maintenance beyond maybe a quick buff every decade (if you really beat it up), that floor is polished concrete.  It also has the added benefit of using no chemicals or finishes to maintain.  I’ll be the first to admit it’s a significant added cost during construction and it requires much more from the concrete contractors and can seriously mess with a construction schedule.  However, there’s nothing like the honesty and beauty of a pure, polished concrete floor.  The ease of cleaning and no-fuss lifetime flooring is also nice.  The alternative of a wax or epoxy coating over a concrete floor could average out as low as $40/month over a decade with a tile or wood floor more in the ballpark of $100/month.
  4. water damage  | Water damage (inside and out) is one of the most costly (and helpless) issues a homeowner can experience.  We already discussed exterior water damage a little above.  We also place windows and doors in locations where water infiltration is nearly impossible and then obsess over permanent detailing and sealing to make sure the outside water stays outside whether from Mother Nature or an intense hose fight.  On the inside we have used similar obsessing to think things through.  Water heaters and washing machines inevitably seem to leak at some point.  Both are on a pan that drains directly to the outside in an event of a leak.  Bath tile area is over sized to protect the drywall, polished concrete flooring throughout the home keeps any spills from damaging the floor.  A 24 hour fresh air system constantly pulls “dirty” and potentially moist air from the kitchen and bathrooms.  Let’s say $2,500/decade or $20/month.  This could be much higher or non existent, depending on the home and luck.
  5.  interior painting  |  I won’t spend too much time here.  We use high end and durable paints specific to each area.  All trim and doors are painted with an extremely durable and washable low-voc, semi-gloss, enamel paint.  This paint is amazingly hard and easy to clean, it also lasts at least twice as long in these high use areas.  Our wall paint is a similar, zero-voc, low gloss, washable paint.  It’s almost flat but has a slight sheen and special additives to be durable and washable.  Let’s say you paint your house half as often for a savings of $20-40/month.
  6. Windows and doors  | The Arizona standard steel front door and vinyl windows is about the worst combination possible in our climate.  Aluminum can look nice and slide sweet but the heat transfer and lack of long term durability are major downsides.  We went with a solid wood, aluminum clad window from Windsor.  The wood is very durable, energy efficient and solid.  The aluminum cladding keeps the direct sun (only on half of the South windows during the winter) off the wood.  The swing doors have Ashley Norton mulit point locks for durability, efficiency and security.  This setup cost us some serious cash but it should last 30-50 years as opposed to the 10ish of vinyl in Arizona.  Savings of $50-75/month.
  7. HVAC  | By building a better box we both put less strain on the heating and cooling system and also made it much more simple.  The only ductwork is 4 and 5″ ducts for the fresh air system.  Monthly maintenance savings come from much smaller air filters and a washable pre-filter.  Long term savings come from reduced replacement cost and longer lifespans due to the reduced load on the system.  The average home owner replaces their HVAC unit every 10-15 years and cleans ducts every 1-5 years.  Average monthly savings in a vali home are $20-50/month
  8. Landscaping  | Xeriscaping not only uses less water but also native plants that require minimal maintenance.  By going this route there is minimal weeding, pruning or seasonal replacing of plants.  Everything is picked for its specific purpose and location and will thrive in the natural environment while serving the desired purpose, such as shade.  Yearly trimming of larger shade trees and occasional weed picking from that pesky neighbor’s grass in the summer is all that is necessary. Savings of $0-50/month



I assume I’ve bored you by now so I’ll stop there.  There’s plenty more to talk about so don’t hesitate to contact us or come by to see the end results for yourself.

I’ve used fairly conservative numbers and come up with a savings of $240-475/month on average for a better built home over the “norm”.  OR .75-1.4% of a $400,000 purchase price OR $50,000-100,000 in loan value.


So there you have it, relatively conservative numbers broken down piece by piece.  With just the calculated energy use and the 8 items I’ve discussed above we have identified a savings of:


  • $80,000 – 160,000 in buying power  OR

  • $390-775 per month


By building better homes we can all live with less anxiety and worry, truly save money and get over $100,000 in buying power, shifting our hard earned cash from maintenance and utilities towards mortgage payments and our own financial future.

The 2 images below are the breakdown of costs between a $250,000 traditional home and a $375,000 vali home.  Both of these homes have the same average monthly expenses but the vali home has over 50% of those expenses going directly towards a mortgage principle!  After only 10 years of living in a home the vali owners will have an extra $26,000 towards their principal payments while also owning a much more valuable home!

Don’t get fooled by sales prices and deals that seem too good to be true, make sure you have all the facts on the real costs of your future home.