Monday, August 11, 2008

My Best Move Ever (Part 1)

My best move ever was moving to a smaller house. Actually, it was more than just that. It was simultaneously moving to a smaller house, moving out of the suburbs into the country, and switching from owning to renting. Those three factors have combined to give me more benefits than I could probably list...but I will try.

First, the financial benefits. My mortgage for the old house was $1492/month. Rent for the new house is $340/month. My car insurance dropped by more than a third because I moved out of a major metropolitan area. I pay no property taxes and have no maintenance costs.

Aren't I tossing money away by renting? Not necessarily. When I owned, I was tossing away nearly $10,000/year in interest (after you deduct what I saved in taxes). Now granted, over the course of 30 years, my interest payments would have gone down, IF I actually stayed put--but being a rather typical American, I move every few years. And IF I stayed put, the house would likely have built equity to at least counteract some of my interest payments. Maybe...but just because markets have performed in a particular way in the past is no promise that they will continue to do so. So you never know.

What I do know is that so far, given the current housing slump, renting has been the better deal for me. The timing was just right and the fact that I was simultaneously downsizing has made it work for me.

The other financial plus is that renting has broken me of thinking like a homeowner. As in: Gosh, wouldn't the kitchen look better with a tile floor, or new white cabinets with glass fronts? We really need a new front door. Why'd the old owner's ever put carpet in the bathroom? A shed would sure be nice out back. And a deck. With a pergola. I never cared for rosebushes much, let's put something else in. It's never-ending when you own a home. There's always some project lined up.

Renting breaks you of that. Sure, I can think of things that would improve my little house, but the fact is it's incredibly charming just the way it is. I don't need to make any changes. Renting has helped me appreciate things as they are, has got me to stop fiddling and fidgeting with everything and just leave them be. Which is ultimately very nice on the wallet.

Then there are the utility bills. My old house was 2440 sq. ft. with an additional unheated 900 sq. ft. attached garage/workshop. My new house is 485 sq. ft. Which do you think costs more to operate? Here, I spend about $500/year for heat and about $400/year for electricity for everything else. Trash service is not mandatory (okay, that has its downside, i.e. neighbors burning noxious crap!) But, I take my own trash to the landfill and since I compost and recycle and don't buy much in the first place I go about once every 2 months. It generally costs me between $3.50 and $5.00 per visit. (In the metro area, trash service was mandatory and if you wanted to take a special load to the landfill it cost $20-something per car-load.)

Being 90 miles from the metro area has other financial benefits as well. Dinner at a restaurant in town costs around $5.50 or $6.50. The one time I went out for breakfast my total bill was $1.75. I can see a $3.00 movie in a neat old theater that still has its original stage curtains and is full of rich architectural detail. And vet bills are extremely low. A visit for a kitten's first shots was $10; for a cat with an infected wound $30, including meds. The most I've ever paid was $38.50, and that was a very dire situation. Back in the city, it seemed like every visit was at minimum $300. They always wanted to run every test under the sun when something was wrong. It's refreshing here to see these country vets taking a very no-nonsense, down-to-business approach to their work.

In the three years I've lived here I've saved thousands of dollars.

In Part 2, I'll get to the other benefits beyond money.

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