Thank-you FV. :)

[peanut]

I was chatting with friends today. A bunch of us stitch together at one of the libraries in town. Well today the library was also holding a program on how to tell whether it's time to move or not. Mostly for seniors I think. One of the ladies went in there and listened, rather than attend stitch-in. She emerged about the same time as us and went to coffee with us. The discussion was fascinating...

I asked her about the program. Turns out it was given by a real estate broker and focused a lot on leaving houses and going into condos and apartments. The upshot was we, the ladies, got to discussing how much it costs to run a house.

One lady was insistent it was cheaper to stay in an apartment. I was puzzled. DH and I have done the math on our house and it is only costing us about $600/mth. to stay in our home...excluding repairs and renovations. One bedroom apartments rent starting at $850 in our city, and that will be a small slum landlord apartment. So I comment... more to myself than them... 'how can it cost that much to live in a house? We live in a 2 storey 1500 sq. ft. home in .... and it costs us a lot less!' They started asking questions...

Well, I have to thank the Village. Turns out I am more frugal than I thought. I mentioned YAK Communications and only one had heard of it. I mentioned everything being on power bars and the table fell silent. I mentioned CFL lights. Silence again. They started saying how everyone had utility bills $100/mth. or more for each utility!

I was stunned. The only ones that ever go that high here are natural gas (heat) in winter, and electric (in winter). But electric averages out to about $70/mth. Natural gas is about $90/mth. Water is $70/mth. on average. Our phone is at $35/mth. That shocked them. I don't have a cell phone, and with YAK for long distance and no bundle, we're doing fine in that department. Property taxes run about $250/mth. That all adds up to $515/mth, without renos. Renos this year ran about $6000. That's $500/mth. So $1015/mth. And it's over 1500 sq. ft.

The thing that got me is they were giving these figures for one person households - 1200 sq. ft. bungalows and smaller. We have 2-3 people in our home at any given time, and over 1500 sq. ft. to heat!

The catch, I have a feeling, is maintenance and repairs. Which run us a lot right now because we've neglected the house for the last 16 years.

Still, a condo for $700-800/mth condo fees is $8400 - 9600 for maintenance a year! And then taxes on top of that?! Another $300/mth. for a two bedroom. I don't know... That's $1000-1100/mth. = $12,000 - $13,200/year. Compared to being in the house...$12,180.

Hmm...not much difference. But right now we're doing lots of renos that won't need to be done for ten years or more. So averaging that $6000 over 10 years would give a more accurate figure. And there is a world of difference in space between a condo/apartment and our house!

I guess it all depends whether you're a condo person or a house person. Either one works, depending how you look at it. It's a question of how much space you want to trade your hard earned dollars for. And how frugal you want to be to stay in that house!

My thanks to the Village for motivating me and inspiring me to keep at it so I can stay in my home, and teach others about frugality as a result!

[DaveP]

Heckuva good post, peanut, and bang on. If your home is paid for you are most likely saving money over a renter or a condo owner. Even still paying your mortgage you're putting your money into an asset. Plus you have the advatages of space (both inside and out), privacy and peace (Nobody on the other side of the wall.)

[mauimagic]

Well that sure summed it up really well Peanut!! And I have a feeling that there are a lot of people who don't really know what they are paying for. You are your DH make a great pair--- charge ahead!!

[frugalfranny]

The catch, I have a feeling, is maintenance and repairs.

Way to go peanut..........you will get the renos done too, I am sure.

The m&r is a big "catch" for a lot of homeowners. I still say there should be some sort of 'homeowners class' that people can take before buying a home, so they will realize the upkeep............not all people are willing to research or LEARN about this upfront. (some of the "habitat homes" are perfect examples of this!!)

I have a friend that 'is buying' a home that should be in a rental!!

She can't afford any repairs............let alone when her house needs to be painted............or other upkeep. I can't imagine what she will do when she needs a new roof........since she had to borrow money to get it painted...........which she let go for years.

[HappyMama]

Great job Peanut for not only being frugal, but willing to research, do the work in your budget , cutting costs in your food budget and life to make it all work.

Being diligent and the financial planner for your family sometimes isn't the easiest job for most but you have done a fantastic job! I for one am very impressed.

It is wonderful that you share your knowledge with others in real life, on here and in your Church as well. You have blessed many others and gave them pause to think I am sure.

In time you will get your maintenance and renovations done as well.

[peanut]

The m&r is a big "catch" for a lot of homeowners. I still say there should be some sort of 'homeowners class' that people can take before buying a home, so they will realize the upkeep............not all people are willing to research or LEARN about this upfront. (some of the "habitat homes" are perfect examples of this!!)

I have a friend that 'is buying' a home that should be in a rental!!

She can't afford any repairs............let alone when her house needs to be painted............or other upkeep. I can't imagine what she will do when she needs a new roof........since she had to borrow money to get it painted...........which she let go for years.

Yeah, that's the other catch. Don't over buy. Buy what you can afford, not one iota more. I know someone deep in debt and we've talked housing. They've decided to put it off because they can't afford it. Plus, they don't plan on having children and really don't want the upkeep of a house. That's a lifestyle choice. And all the more power to them for making that decision. Better to realize it before they get stuck with a big mortgage than to realize it after!

We also know a single young man in his late 20s who has embraced simplicity and is living in an 8 x 12' cabin right now and loving it! Not for me, but for him it's just the ticket. Think how easy it would be to clean.

ETA: you know, the mortgage is one cost I didn't calculate into the equation. We paid ours out six years early. But if you add the cost of the mortgage to housing costs it would add quite a bit to the cost of owning a home. However the value of our home has also increased three fold since we bought it. So maybe that can be written out of the equation. Definitely being mortgage free makes a huge difference!

[dcompton]

What you say is true, but for me, renting still makes more sense. First, part of it is location. I have a nice 1 bedroom apartment in a nice, if not super fancy, well managed complex for 491 a month. Cost aside, I would not be able to do any apartment/house or yard maintenance for health reasons. Management takes care of the grounds and if anything is wrong, I call the office and it's fixed, usually the same day.

Then, there is the house to dispose of someday. I have no family, so should I have to move to some kind or assisted living or nursing home, I would be stuck with selling the house, which as all of you know involves a lot of work, at the time I would be least able to deal with it. Should I die while still living there, some poor chump of a friend would probably be burdened with dealing with it. There are downsides. Yes, there is the possibility of bad neighbors across the wall, but there is also, in a house, the possibility of bad neighbors across the fence. I can call security, and if there are enough legitimate calls about them, my bad neighbors will be moving out, whether they want to or not. I also like the freedom of not being tied to a house. If I want to pick up and move, it's a lot easier from an apartment.

So sometimes there are circumstances to consider beyond the mere costs. There are advantages to owning a home. But I think there are also other advantages to renting.

[Libby]

I love the break down and comparison peanut! Thank you. A lot of people aren't in the 'know' of what being frugal is but its all a matter of perspective right?

[peanut]

Donna, yeah. There's always the lifestyle component. And all the more power to you if that's what you want. I've come close to making that decision myself.

But I do get tired of people saying living in a house is more expensive than an apartment. It's how you live that makes the difference.

[Incognito]

Yes, it's important how you live, but it's also where you live. Our town affixes a $3,000 - $5,000 yearly tax to every homeowner's tax bill just for water treatment plant costs.
There are lots of largescale livestock operations all around the town perimeter, dumping into the river and creek, and leaching into the groundwater, so the whole town is on reverse osmosis water.
The taxpayers were shocked when that local law went through; they thought they'd get away indefinitely with the bad water and no tax increases, but it finally caught up with them.

My point is that things are always changing, and having a house doesn't give you too many options during those changes.
Renters have lots of flexibility in their choices and it's easier to move to find employment.

Having said that, I've had my eye on a little house in another town that's going for $10,000. However, I'd have to wait till I get my Old Age Pension, before I could afford it or one like it.
But by then, my health will be gone.
Oh well, maybe it's meant to be that way. Just a dream.