Congratulations on solving several problems with a well thought-out plan. Sometimes, utilizing the enbedded energy in a house is worth it, adn sometimes, it is indeed a losing proposition.
I have run numbers on a small, old farmhouse here, in anticipation of our daughter wanting to live on the farm. It was a beautiful site, for the most impressive asset. The house itself had literally been set on fire for a VFD training plan, then snuffed out when one of the former heir/owners found out and raised a ruckus about it, barely in time.
That site is where our employee's mobile home is set now...we brought it in at an angle that saved every tree of any size, so it is a nice, shady lot. The same money we would have thrown into the demolished cottage went towards buying the mobile home and for our daughter 's nice new home instead.
Like your son, she's got a mortgage, but HEAVENS! what a time to jump onto that train...lowest rates in my memory, and I've been watching for over 40 years. I doubt that he will ever regret building a reasonable, energy-efficient modern structure. If/when he does marry, that will be the time for his bride to start putting a decorating spin on it, with the "upgrades." It's may also be good that he owns the home before he marries, too.
Thanks so much for the update. We often have issues like this come up here, we offer information and opinions from our experience, and then wonder what happened....
