Thursday, August 7, 2008

The Housing Crunch

I recently moved to another house. I was renting my previous house and i'm renting this one. I want to share with you some the financials of this.
In the previous house I paid about 3400 lempiras. I'm not going to convert to dolars but the exchange rate is roughtly 19 lempiras per dollar. In the house I live now I pay 5000 lempiras. That is an increase in my rent of about 1600 lempiras.
In the previous house there was no garage to park my cars, so I had to pay parking for my cars. That was 300 lempiras for both cars total. In this house I have parking for 3 cars so I can fit my two cars and could even rent parking for one car for someone that could live close.
With the parking included the difference is about 1300 lempiras. Not the most wise financial decision when trying to get out of debt. However there are some intangibles.
First one is security. In the previous house my daughters had to cross a busy street to get to their school bus stop and back. Nothing ever happened to them but it was always scary when they showed up at the house and the maid hadn't go to pick the up. My wife got her cellphone stolen twice walking to our house from the parking area. I personally was never a victim of crime but at least two people were assasinated within one block from my house. Comming home from work at night was always a concern to my family. My mom and dad always worried that something would happen to me there.
In the new house I live two blocks from my mom and dad's house and I lived in that neighborhood all my childhood and young adult life. I know it is safer. There have been cars stolen or vandalized there but it's not the norm. There is no busy streets and the neighboors do check on my house and either call me or the landlord if something is wrong and there is no one there. Like when the water tank was overflowing. What is that security worth ? For me it is hard to define.
I've been there only one month but there are some things that i've noticed already that sort of help my finances while living there.
My electric bill on the previous house was usually around 800 lempiras. We moved the same appliances to the new house and the same number of people and my electric bill in this house came yesterday. It was around 300 lempiras. I attribute this to this house having better electric wiring and better natural lighting.
There is less electricity wasted by the cables and less lights turned on during the day. Another point is that all the lights here are flourescent. In the previous house I tried to change the incadescent lights to fluorecent but for some reason they didn't all work. I think again it was the cabling and the lousy service we got back there.
So even if the bill increases to 400 lempiras I still would pay 400 less in this house. That would make the difference just 900.
The other reason for the move was comfort. I'm not talking US comforts. I'm talking basic comforts. The old house had been flooded by hurricane Mitch and some things never got repaired. Doors didn't work well and the sewer water would flow out well. Let's just say that sometimes that house didn't smell good at all. We also didn't have a water storage tank. Since tap water was available every other day that mean I had to keep 55 gallon drums in the house and use it to take baths, service the toilets and wash clothes. It worked but it was always something that made lifer harder. We also had to use the stove a lot more since on the non-water days we would heat water on it to take baths. Maybe that's the reason for some of the electric savings. The new house has a reasonably working sewer system. Inside and outside doors work well and the landlord installed a huge water tank right before I moved in. What is the price of that basic comfort and more sanitary conditions ?
Honestly i'm not trying to justify my move to this house to you, I just stating the things I notice that improve my quality of life, my safety, and my comfort.
Even some strange things have happened. The previous house was close to several malls and other places to buy stuff, but it was a little distant from supermarkets. Both cars were used in many short trips every day to go to places "relatively close". This house is more distant from my place of work but the road to it is less congested. Also we have a discount supermarket about half a mile away. My wife now shops there and there is some savings in our monthly groceries that are not eaten up by a long car trip to the supermarket. Since we now life our far, we plan our trips more carefully and I think that helps on the fuel savings too. I haven't measured scientifically but I know we put more brains into going out more now than before.
By the way, the old house is now being rented and the new renters pay 5000 lempiras, exactly what I pay in this safer, healthier, roomier house.
What do you think of my move? was it unwise ? was it wise ? do you need more info to have an opinion ?
I appreciate your comments, and super-saverman does too. I'm drafting up an article on fuel saving tips, honduran-style ;-)
Well, at least this blog is free (cause the housing sure isn't!)

1 comment:

Steve Smith said...

Well the rule of thumb I go by is no more than 25% of your net income for housing. If you're taking home Lps. 20,000 a month or more you're good to go.