Scraping By

The past few days I have been preparing the east side of our house for repainting. That means scraping. The process has turned out to be one of near constant economic calculation and forecasting.

Certainly the large flaps of loose paint must be removed, and they detach easily and float to the ground. Places where the paint film is still intact but has bubbled up must be lanced like a boil and scraped out, which is a bit more laborious but still clearly worthwhile because bubbly paint film is not a suitable substrate. In both cases, the investment of time and effort will undoubtedly pay off with a paint job that lasts much longer than it would if I didn't do this preparation.

But then there are the marginal areas. Draw a good tungsten scraper across a painted clapboard and some paint will come off. Does that mean that that paint definitely had to come off? Just because I can remove paint doesn't mean that I ought to. Before scraping this marginal paint, I must consider: To what extent does removing this marginal paint lengthen the life of the overall paint job, and by how much?

It's sort of like drilling for oil. At some point, it becomes uneconomic to continue lifting the oil out of a given well. There still might be oil down there, but the cost of lifting it outweighs the return. Obviously that point changes with the price of oil and the costs of production.

So what are the relevant factors in my case? The analog to the cost of oil is the economic value added to the house by having it freshly painted. Given our sideways housing market in Boston, this is probably pretty stable at the moment, but I don't know what the dollar figure would be. I guess I'd need before-and-after-paint-job appraisals. And anyway, I wouldn't be realizing this gain right away. I have no plans to sell the house now. So this factor would diminish over time, requiring some sort of depreciation calculation. On the other hand, I could possibly capture the enhanced value immediately by borrowing against the increased value of the home and investing the money elsewhere in search of a higher return.

The analog to oil production costs is the value I assign to my time. I guess this would be the amount I could get paid doing something else. With a bit of effort I would probably be able to wangle some sort of writing, editing, or graphic design work that would pay $X per hour, so $X per hour is the value of my time. I estimate I can move the scraper back and forth 500 times per hour, so each scrape-stroke costs $X/500 in foregone income.

For a given scrape-stroke, if the present value of the increased future cash flows due to enhanced exterior appearance and maintenance exceeds $X/500, I proceed with the scrape. If not, I move on. During scraping I am constantly calculating and re-calculating, deciding on a scrape-by-scrape basis whether or not to execute the scrape. Sometimes yes, sometimes no.