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Thursday, September 9, 2010

Radioland

So I turn on the radio in my truck. There's a bunch of experts all talking about the housing market.

Now I'm no expert . . . thank god.

Their advice left a lot to be desired. I don't remember everything they said, but a few things stuck out. One caller asked about strategic defaults. That's where the home owner can afford to make the payments, but they paid way too much for the house. The place is worth a lot less than what they owe, so they walk away from it.

The so called experts were all against this tactic. Shows you what they know. Sure, your credit rating will take a hit, but you can repair your credit in less time than you could pay off the house. Besides, what does anyone need credit for? Making more debt? Isn't that how all these problems started in the first place?

Suddenly, all the experts are promoting renting instead of buying. Didn't this same bunch of goofs, not too many years ago, say you couldn't lose in real estate?

Now they are saying that real estate has always been a bad investment???? Historically houses only go up 1% a year over inflation, they claim. Where they get their statistics, I don't know.

I've seen plenty of people make money with their house. I did it myself. Buy an affordable house that needs work. Fix it up yourself. Make it a more comfortable place to live. Should you want to sell, it's worth more money due to the sweat equity put into it.

Point is, you've got to live somewhere. As far as I'm concerned, rent is like setting your money on fire.

Another way to look at a house is how it can work for you. Does it have a well and septic system so you don't have to pay water and sewer bills? Good garden space so you can save money on food? Can you raise chickens, rabbits or bees? How is it situated for alternative energy: solar, wind, microhydro? Does it have a woodlot for firewood? Space for a home based business? Critically, do the local laws prohibit some or all these things? Some places even prevent people from having a clothesline, one of the easiest and cheapest ways to save energy.

There are all kinds of ways around housing expenses. Some people buy cheap junk land and slap a trailer on in. It's not pretty, but has low debt and low taxes. Quite a few families live in RVs and never own any land. Plenty of places to stay for free or darn cheap. Some people live on boats. There are co-housing arrangements where more than one family lives in a house and shares the expenses. Frankly, that's about the only way any of these Mc Mansions could ever make any sense.

Don't expect anybody in main stream media to say anything about alternatives. A house doesn't have to be a prison. There are options, but middle America isn't suppose to know about them.

I had to turn the radio off. No sense getting all worked up over those guys. There are times I do wish there were more radio stations available out here in the woods. On the other hand, silence is good. Better sometimes.

-Sixbears

1 comment:

  1. Sixbears,gotta love the Experts.Usually what ever they are spouting I go the other way.I believe its what investors call contrarian investing,works well in a lot of things.

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