Where you live – your home – may be one of your largest outlays of money. While your home is not part of the farm business plan, where you live and how you finance your home needs to be considered in your overall personal financial plan. This toolkit is developed with the assumption that you will live on the farmstead. In the land section we discussed structures you need to consider when evaluating land for your farmstead operation. Later, in the infrastructure section we’ll discuss utilities. In this section we’ll focus on the house, your home.
It’s quite likely that an available farmstead will not have a habitable house on the property. Or, if there is a habitable house it will likely need to be upgraded before it can be lived in. You can’t change the soil conditions of a potential farmstead. You may not be able to bring utilities to the farmstead. But you can add, improve or remove structures such as the house.
Where to start? Make a list of your “wants” and your “needs”. Consider how your life may change and how that might affect either list. Focus first on your needs. Needs are typically things like the number of bedrooms, bathrooms, heat, air conditioning and basements. Wants are typically things related to design features – attached garages, separate laundry rooms as well as their locations, outdoor spaces, finishes (floors and cabinets for example).
As you are developing a business plan for the farmstead you should have a sense for affordability. By now you should know your anticipated sources and uses of money to support the farmstead. Will you or another family member bring off farm income to support general living expenses, including the home? Depending on your personal financial situation there may or may not be resources to help you make your home more affordable. You may need both a short term and long term housing plan. For example, there may be a home on the farmstead that with some modifications could be lived. Your long range plan may include planning for a replacement home after a period of time when your financial situation has improved. Remember, a startup farmstead operation will have many financial demands. Being realistic about your budget is an important success factor.
House Needs & Repairs
First we’re going to explore the steps you need to take if there is a house on the farmstead that could be lived in. The value of this dwelling is likely a part of the purchase price of the farmstead. Working with an existing dwelling may be the most financially prudent strategy for you. Assuming the dwelling is livable or can be with reasonable modifications, has essential utilities and meets your basic needs.
Home inspections give you the opportunity to have the home thoroughly examined by a professional before you invest in it. A home inspector can help you develop a thorough understanding of any issues that require repair. A home inspector will climb on top of the roof and crawl into the attic. Their job is to protect your investment. They will check the roof, plumbing, electrical components, appliances, heating and air conditioning systems, ventilation, windows, fireplace and chimney and the foundation. What a home inspector won’t do is offer advice on whether you should purchase the property or the cost of repairs. A home inspector typically does not include irrigation systems, septic systems, air ducts, pests or mold. The inspection will be limited to the home only. Other structures will not be included. Vegetation and drainage comments will be limited to those that affect the condition of the home. For example, the inspector may recommend tree limbs be trimmed to prevent them from brushing against the house which might damage siding, roofing, gutters or downspouts. An inspector may alert you to the presence of lead-based paint or asbestos but may not be licensed to specifically test for those potential hazards. An inspection will take 2-6 hours depending on the size and condition of the home. After the home inspection you will have a detailed report on the overall condition of the home including any issues of concern along with necessary or recommended repairs. While there are a number of home inspection checklists online that you can access to do your own preliminary assessment of the dwelling, we recommend that you invest in an inspection from a professional home inspector to minimize your financial and safety risks. A professional inspection may be required by your lender.
You may be eligible for assistance with home improvements using the following programs.
The North Dakota HOME Program may be a resource for homeownership or rehabilitation. HOME can assist families whose Median Family Income (MFI) does not exceed 80% MFI in a given area as defined by HUD Section 8 income guidelines. The North Dakota Department of Commerce’s HOME staff will help you with additional information.
The Community Development Block Grant (CDBG) program assists very low and low income individuals with housing rehabilitation. CDBG funds provide financial assistance in the form of grants and loans through eligible units of local governments. To apply for CDBG funding applicants must contact the Regional Council in their area.
Souris Basin Planning Council’s Housing Rehabilitation Program assists owner-occupants of single-family homes with repairs and rehabilitation.
Community Action Partnership of North Dakota’s Weatherization Assistance Program is available to low-income households. Income guidelines are 200% of the poverty level. Households who qualify for fuel assistance through their local county social services department automatically qualify for the Weatherization Assistance Program. The Program uses various measures to increase energy efficiency and improve the health and safety of the home. An energy auditor visits each home to decide which energy and money-savings measures are most effective for the home. Examples are caulking and weather stripping, attic insulation, floor insulation, wall insulation, foundation insulation, windows, doors, furnaces or electric baseboards and building repairs. You can contact your region’s Community Action Program or your local human service (social service) zone office for help.
USDA’s Single Family Housing Program provides low interest loans to very-low-income homeowners to repair, improve or modernize their homes.
Current Farm House needs to be demolished
The property may have a house on the property that needs to be demolished. This house may have appeared to have potential, but after a home inspection proves too expensive to remodel or the house may be obviously uninhabitable. Whether you plan to demolish the house yourself or hire a contractor the following steps are needed.
Step 1: Identify potential hazardous materials.
If the house contains asbestos or lead paint, proper procedures for remediation need to be followed prior to demolition. A certified asbestos professional can test the home for asbestos as can a licensed lead paint professional test for the presence of lead paint. Home testing kits are not reliable testing methodologies.
The North Dakota Department of Health, Environmental Quality program oversees both asbestos and lead-based paint regulations. A fact sheet titled Demolition and Renovation in North Dakota will guide you through the necessary steps to be taken prior to demolishing a building to comply with North Dakota’s Asbestos regulations. The State maintains a list of licensed Lead-Based Paint Firms. Questions should be addressed to the North Dakota Department of Environmental Quality Department at 701-328-5166 or email@example.com. As there may be fines for non-compliance with both asbestos and lead-based paint regulations a call is recommended whether you hire a contractor or perform the work yourself.
Step 2: Permitting
Contact your local city or county government to identify required permits for demolition. Exact permits will depend on local and state laws and regulations. Permits may be required for hazardous materials demolition, noise and waste disposal. If you contract with a professional to demolish the property clarify whether testing and permit costs are included in their quote.
Step 3: Disconnect existing utility services
Utility services to the house need to be properly disconnected prior to demolition. This can be challenging as you may want electricity (light) to manually dismantle portions of the home, but need to disconnect electrical service before final demolition or removing electrical fixtures.
Utilities that will need to be disconnected are electricity, water, sewer, gas and communications. Electricity and gas pose particularly dangerous health risks if still active when demolition takes place. Neighbors may be at risk for losing service if services are not properly terminated. Local power, gas, water and drainage infrastructure may be affected. Most utility service termination requests need to be made in writing to the supply company with a reasonable lead time. Contact your local rural electric provider to schedule service termination. If the home is serviced by natural gas you need to call the local rural natural gas provider to schedule service termination. If the home is serviced by propane gas you need to call a local propane gas distributor to help you terminate propane service to the house and properly dispose of any residual propane and possibly relocate or remove the propane tank. Communication systems such as landline phone systems and possibly Internet or cable TV providers should be notified of planned demolition. They will determine whether they need to terminate services or if you can.
A call to your local public health unit is recommended. They should have records of your water and sewer systems. The health district can help you understand your obligation to ensure water and sewer systems are properly terminated. If your home is supplied with rural water you will call the water authority or department to arrange for termination. If the water is supplied by an on-site well a local plumber should be able to help you properly shut the water off to the house. Most rural homes are on either septic systems and/or have drain fields. A local plumber or possibly even your excavator can help you terminate the sewer system.
Step 4: Demolition
Mechanical demolition is done with the help of heavy equipment. This is the most common form of demolition. The house is ripped down with the help of excavators and other heavy machinery. Mechanical demolition is typically the fastest solution. Deconstruction is accomplished by tearing the house down by hand. With deconstruction, the house is taken apart piece by piece using manual methods. When “green demolition” is the method of deconstruction as many materials as possible are salvaged for reuse. Typical deconstruction projects can recycle or reuse approximately 70% of building materials such as lumber, beams, doors, windows and more. Interior doors, light fixtures, tubs, sink, copper pipes, glass from windows and nails from the floorboards can usually be recycled if not reused. There may be salvage value (money) for recycled materials. This method typically takes longer than mechanical demolition. Hired labor to deconstruct a house is typically 2-3 times the cost of mechanical demolition. If you do demolition the timeline may extend even longer but the costs will be minimal. Another option is to combine the two processes by partially deconstructing the home by hand followed by mechanical demolition with an excavator. This process is typically favored when cost, time and environmental responsibility are all important.
Step 5: Disposal
Debris is typically hauled away by the contractor who uses a trailer or dumpster.
Check with your local county to understand when they are open, how debris needs to be prepared for disposal and any limits on the type of debris they can accept. The North Dakota Department of Health maintains a list of Active Solid Waste Facilities .