I always put off doing the figures for the 1/2 year because this makes me crazy! Financial stuff is so darn boring and always so bleak!
Last night when I was doing the figures for this year Hj exclaimed “that is a lot of money” and of course he is right. THO has cost $92,703 for the lot. There is a hidden cost too which is not included in here. This is the land debt. We have been doing projects on a pay as we go with the income that Hj and I live within, but we do owe money on the land still. $38,000 of the original $67,000 is still outstanding. With the payment of $250/month that is made on this but at this rate we are likely never ever going to pay this debt off. As a matter of fact when we got the loan in fall of 2010 it was about the same amount as it is today. Not too sharp! We simply must stop the financially costly improvements on THO and start paying down the debt. When you start adding interest to the figures it becomes NUTS to have debt!
Saying that we are not nearly as bad off as some people does not make this debt excusable or explainable.
The fact is that we are pretty privileged! We have two properties, one that is required in Southern Ontario as well as THO and together we pretty near have both land and space though not exactly a McMansion. Kent Griswold’s Tiny House Blog hosts an article by Andrew Morrison, which suggests that a Tiny Straw Bale home is the answer could be right. The interesting idea in this article is that he has taken some time to gather some very frightening unconsidered figures on what the McMansion cost their owners/ hour to live in.
I am not sure of his figures but I have done some of my own (to the best of my ability).
The Hamilton house value about $150,000 it is 1000 square feet. When I include all expenses including food, recreation, mortgage, upkeep, vets, dog care, car, home and debt insurance, … living in this small house costs ~$48,940 a year
As a purely recreational property without any improvements THO adds an additional ~$4,580 to this budget a year, plus extra transportation costs for back and forth between the two places. This makes THO a ~$400/month recreational property but as I mention we need to increase our payments on the land, perhaps $300/month which ups this to $700! Brutal!
Assuming we would still use two vehicles and the same amount of gasoline: if we moved to THO, full time, today and lived a similar lifestyle our living costs would drop to ~$26,180 a year, but we cannot. It is like that silly children’s round… there is a hole in my bucket, dear Liza, dear Liza! For him there is a hole – for us there is a different kind of hole. THO’s hole is the nearly $40K in land debt. Either I have to get a job or win the lottery if I want to move ahead… unless anyone wants to give me $40K… which I think is mighty unlikely.