There’s been some talk here lately about the expense of building a railroad. The other day I was talking about this with a buddy and came up with a different angle on it. People tend to drag out the building of their “dream” layout because of the expense. Well, how about financing it? I mean, a used car nowadays is 15+K, why not borrow, say, that amount and get the RR built? I haven’t got the space to need that much $$$, but if I did I’d consider just such a plan (or I could just do one hobby[:0]). Look at it this way, if you paid off the loan in 5 years you could set a goal of having the layout complete in that time. There would be no delays because the materials weren’t available due to cash shortages. A checking account could be set up and if you needed supplies they could be purchased. I think $15K would get a reasonable railroad built and stocked with trains if you stayed with P2K level locos and such, no expensive brass. Any thoughts?
Holy smoke! I used about Cdn$3.5K, and still chastise myself for the self-indulgence. Now, I know that many borrow for boats, ATVs, RVs, etc, and they are as much a luxury as are model trains and their layouts, but…$15K? Whew, I’m not sure that I’ll spend anywhere near that much on trains the rest of my life! At least, I sure hope I don’t. [:O][:D]
It has been a long time since I needed to figure a loan amoritization but wouldn’t it make more sense just to make the same monthly payments to the LHS directly? Building the layout should not have many delays due to funding with that sort of regular budget and at the end of 5 years you have a layout worth 15k + the intrest the bank would have charged.
The LHS needs the money worse than the bank does.
[:D] I was talking to a guy at a train store one day and the subject of homeowners insurance came up. As we talked he got to thinking that he needed more coverage for his trains. When I asked how much he had invested in them, he said he figured $100K!!![:0][:0][:0] Surely he was blowing smoke.
I do think it would be easy to spend $15k on a complete layout , trains and all. Think Locos, DCC, signals, track, buildings, benchwork, etc. But if you wanted something smaller the figure could be adjusted easy enough.
Not many lending institutions would consider an unbuilt layout as collateral so either you would have to do an unsecured loan at highest interest rates or take out a morgange on your home. Neigher sounds that appealing. I like the idea of paying monthly installments to the LHS on an as needed basis. My spending is so far ahead of my construction I could stop now and still be working in 2008.
True, but that takes more disipline than some folks are capable of. Once you made the commitment to borrow the money the railroad would not get sidetracked.
Space, could it not be borrowed on an open credit line? How about a home improvement loan?
Aren’t open credit lines secured by your morgage and tie up your equity?
I wanted to be able to run trains quickly, so got my main line up quite quickly. For me the hobby is the construction and buliding of the layout, so I am quite content to pace myself with projects. I hope my layout takes years to complete! I don’t think I would ever consider taking out a loan for the whole ammount needed to build the layout, just to get it done more quickly.
Grande,
Why not take the $15K, use it to secure income property, and use the monthly income to finace the train.
Well, cause I think the hassles would be to great and the profits would take years before they could be used for other than the property payments and repairs. Aren’t rental properties about building equity down the road?
Guys, I’m just thinking outloud for the guy contemplating building a model railroad. I’ve heard many say they’ve dreamed about their ultimate RR for years but never had the money. Life’s short, why not build it! Also, guys like me with kids want to run trains with them before they’re grown. Just some thoughts…
DON’T GET TO FAR BEHIND ON YOUR LOAN, THE REPO MAN [}:)] WILL COME OVER AND TAKE THAT VERY NICE FINISHED LAYOUT FROM YOU!!![:O][:(][|(]
IF you buy poorly, yes. If you buy well, no.
That’s cool. We’re certainly getting out of my area of expertise though.
I don’t want to get off the subject, but my Scottish background and limited funds find it a challenge to create a quality layout at the least possible price. Yes this drags out the process, but it gives me personal satisfaction. That being said if money was no object I would probably pay someone to build me a layout to keep me satisfied until I built one with my own hands. Dave
i dont know if got money like that i would use it to buld a home for my layout so it did take up room in the house. maybe a 2 story 2 stall garage bottem for my cars top for the train.
I’ve got about $3500 invested in my modest 4x8 and my most expensive indulgence was my Trix Big Boy. (Got it brand new on Ebay for $400) My other locos are Athearn BB’s, Stewart, Rivarossi and IHC. After experimenting and learning how to economize on different items, I would figure that $15K would build one heck of a layout!
An ideal situation would be “armchair” for a time while building the occasional kit and planning that “super RR”, all the while socking something out of every paycheck into a credit union account. Most CUs offer checknig accounts. When you get ready to build you’ve got some funds available and, by continuing to deposit as you build, the balance on the account can fluctuate…increase as time consuming aspects are done and drawn down to meet greater expenses as they come along.
Grande Man, I agree that a person who wanted a very substantial, all-DCC, multi-loco, and multi-stationary decodered layout could spend $15K in one evening, and then another $5K on bench materials. I don’t know of any LHS that would touch that with any line of credit, and no bank would agree to it unless you owned your home outright, and it was worth, say, $130K, and you had no other outstanding bills or revolving credit.
Unless you could establi***hat you were a master builder who could sell the layout to recoup some of the losses in the event of foreclosure (and I am nowhere near that good), a layout is not as moveable as a boat or an RV. The bank will insist on collateral, and used trains and layouts don’t move. So, you must put your house into potential jeopardy by offering it in exchange for a line of credit or a mortgage.
For those in retirement, it would be time to admit defeat. No one in retirement should be in that situation. For those working, it would be another matter.
Now, if a fellow could draw on his severance…
A dangerous idea. Wait until the refi guys start targeting retired model railroaders. I can see it now: For “2000 easy payments you could have the layout of your dreams”…
I have always felt that my hobby funds should come from discretionary income. Anytime I have to borrow a large amount of money it moves to a different realm.
I also think that lots of money would be spent on items that aren’t used and hence wasted. The tendency would be to pre-buy stuff that you know you are going to need only to decide later to do something else.
I think that for a large detailed railroad 15K may be to low…
15k for investment property? Not in my neck of the woods!!