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Sherman, parked up at Valle de Bravo, Mexico, Mexico. February 17, 2012

Saturday, January 30, 2010

We don't own a house

And we don't plan on owning one again. Yes, we own Sherman, but he's not a house. He's our home!

Anyway, the point of this post is all about how expensive it is to own a house. Normally, you buy a house because you need somewhere to live. And you need somewhere stable to start a family and bring up your children. And because somebody told you that renting is just giving your money away.

And these are all the reasons that we originally bought a house and even in hindsight, it was the right thing to do at the time.

But times had changed for us. Now that our children are grown, we had no more need for a house. And, when this motorhome bug caught us, we were very fortunate to have sold our house at the top of the housing bubble.

And times had changed for the economy. Interest rates in Canada and the U.S. were heading for all time lows. They can't go any lower. That means they can only stay the same, or they can go up. In 1992, Japan had a housing bubble. They also had record low interest rates, which continued lower. But housing prices peaked in the Japanese asset bubble of 1992, and they have been heading down for the last 20 years!

Canada has been lucky in that it's real estate market did not collapse like areas of the U.S. did. But it will...because prices CANNOT go up forever, and people have become complacent in thinking that because they went up for the last 30 years that they'll go up forever.

Our house

I remember thinking that our house couldn't possibly be worth the $240,000 that we sold it for. It seemed ridiculous to me. And I still think it's ridiculous, especially if you're buying it thinking that it's going to increase in value at 10% per year or more like they have been doing.

Anyway, I think we could easily see a scenario where house prices actually decrease every year...maybe for the next 20 years or more.

So, besides the economics of housing prices, you also have all the miscellaneous costs of ownership. This is all good when houses are increasing in price. You have to pay property taxes when you own a house. In Canada, property taxes are higher than in the U.S (all taxes are higher in Canada!). We paid approximately $2,400 per year in property taxes. Then, we paid electricity, water, heating costs, and all of the repair and maintenance items that go along with owning a house. Besides the expense in decorating, there is always something needing to be done...a new roof, a new garage door, a new furnace, a new fence...always something.

So we bought a motorhome. Yes, there is some expense involved with repair and maintenance, but it is WAY less that owning a house. Or at least it has been way less for us.

We just don't have any ambition to be house owners right now, and may not for 20 or more years. In the meantime, we will live and travel in Sherman, and then do some house sitting in other areas of the world once Whiskey is no longer with us.
Posted by Kevin and Ruth at 10:18 PM

5 comments:

  1. Yup.... I agree with ya! And we will be right alongside of ya in 3 years. We got the rig, just gotta retire and sell the house. Maintaining a house and being on the road too is just not sensible to us either. Come on Open Road!
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  2. We are just in the process of getting our house on the market this spring. But, we are not sure we can go completely homeless, or if we should buy a condo, or rent an apartment ?? Our rig is only a 27' Class C, and it is close to being overweight with 6 batteries already. It is the ideal size for getting around smaller campsites, etc, so we don't want to buy a bigger rig, just yet. Also, we will be retiring early, therefore, we will probably work partime, to protect our small nest egg. We don't think we would be able to live day to day work life in such a small rig. To complicate things further, we want to move to BC in the near future, so, why buy a condo, then have to sell it in a couple of years anyway ?? And of course, Teresa has some sentimental things, she just can't part with, so we would have to pay for storage. Our kids are in small suites, so we can't really impose on them. And then there's the issue of not having a real mailing address, and what about getting your mail on the road, and...and...and.
    As you can tell, we go around in circles, and are having a difficult time pulling the trigger !! Oh well, my mother-in-law always says we analyze things to death, and take the fun out of everything....Guilty as charged...LOL
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  3. We hear where you are coming from. We did the same thing 3 1/2 years ago. Sold our house for a real good price,and material items,(just a few small things stored at sister in laws) retired early and hit the road in a 36ft class A, 2 bicycles and a toad. Spending 7 months in warmer climates (Mazatlan Mexico right now)and 5 months around Ontario visiting family and friends. Traveling places meeting people and enjoying the freedom and inexpensive lifestyle for as long as we are healthy enough to do so. Living our dream!
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  4. Thanks again for all the comments. Gald everyone likes the RV life. Trent, you and Teresa just need to sell. Put the money aside for a house or condo later on and then decide what you want. You may be like us and decide that you may never want a permanent location again. With the money aside you can always make that decision later. As for storage of things, there must be family that has room for some boxes, that can be stashed out of the way.

    Glad to see George and Suzie are living their dream. We like Mazatlan and we met Lee there who was great to know. We met her through one of the RV forums online.
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  5. Same for us...we don't ever want a stationary house again. We prefer to be on wheels.
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