The Great American Real Estate Fallacy
Are you about to? STOP! Think about it!
RV Boondocking is an ASSET... While a standard, sticks and bricks house is a huge, life sucking real estate scam of a LIABILITY.
I got sucked in too... and I entertain no fantasy that I'm gonna change the world.
But... If I can 'Save' a few good folks from the malicious, deliberate, Real Estate Fallacy, that a house is the largest 'Investment' most will ever make... That I also, foolishly bought in to... I'll consider my self successful in this lil' enterprise.
When did a house ever make anyone a profit? Well, they do... Just not like 'they' try to tell you. It ain't the owner putting the cash in the bank... and THAT is the Great American Real Estate Fallacy.
The only people who see a profit in this real estate fallacy, are the carpenters, the plumbers and the electricians who built it... The businesses that supplied them, the banker who financed it, and the Realtor who sold it. Then of course comes the government who taxed it...
... and guess who footed the bill?
Uh Huh! You got it!...YOU!... The "OWNER"... and there we stand, poster children for the Great American Real Estate Fallacy.
Let's take out our $4 Wal Mart calculators and do a little math here...
You bought a house for $292,000, when you signed up for this real estate fallacy, and kept it for 7 years... in which time it saw a 'good' appreciation... in 'Cost' terms, to a value of $417,000 (30% over 7 years + a reasonable 10% 'profit' over cost)
Sounds pretty sweet don't it? How is that a real estate fallacy?
Sweet? Uh Uh... Nope... not even...
You paid $89,712 in interest($1068 a month @ 6% or so interest), $12,180 in taxes and insurance, $3,500 in maintenance(assuming no major repairs) and $25,053 to the realtor who sold it(6%)... This is not principle payments... but only the COST that allows you to make those 'Principle' investments.
So... at the end of the seven years... your 'Profit'(the real estate fallacy) is a loss of $5,445 dollars... of course though... if you didn't see a period of pretty strong appreciation... your PROFIT is an even greater LOSS!
The truth is... you can only hope that the scam runs according to plan... to minimize how much you lose...
...if you timed it right... to get caught by a bursting real estate 'bubble', you got hurt way worse!... factor in inflation... you get even farther behind... and they still claim it's an 'Investment'... riiiight
Can you spell pigeon?
... and these are just the numbers on your 1st mortgage... if you also had a 2nd mortgage... your 'PROFIT' is an ever LARGER LOSS.
Investment... I don't think so... CON yes... real estate scam? Definitely. Investment? Not hardly...
Now... what if, instead, you put that, say, $358 you were paying into principle... toward paying for a pretty nice RV!... and say $400 a month, to simply park it in a decent RV Park... just for arguments sake... or... $400 for an acreage land payment to LIVE, RV Boondocking? :-)
Now you're spending $758 a month instead of $1068 int. + $358 principle + $145 escrow, for a total of $1,571... a difference of $813...
I'm not taking away the maintenance costs or utility expenses... you'll still have to take care of and power your Home! ... but you'll not be payin' that Realtor any more! ... and it costs a whole lot less to supply utilities for a rig than the smallest sticks and bricks house!
You'll see some depreciation on the sale value of the rig... but, maintained... it'll keep you housed and secure, indefinitely... and a whole lot cheaper than that $1068 a month in nigh on to larceny, (darn sure usery) interest!
Hmmm... what would those SAVINGS have stacked up to, squirreled away at just 2% for a lousy paying passbook savings account?... over that same 7 years?
Something in excess of $70,000!... and that's just a simple 2%, it doesn't include the power of that savings interest money compounding... which exceeds my feeble calculator skills to perform! :-)
So... buy a House... and loose somewhere between $4,000 and... in my case $100,000+ ... or Live in an RV... right from the get go... and SAVE a bundle to either SAVE... or TRAVEL!
The really bad thing 'bout this article is... It makes me look in the Mirror... and say; "Ya Gol' Durn Fool!"...
... can you hear that 'thumping' sound? ... that's my boot... bangin' on the side of my head...
Now... I HATE IT! when someone rips on anything... yet doesn't offer a viable alternative... Well, I claim to be offering a SWEET alternative.
But, everyone can't live in an RV you say?
Why not? Because we've been conditioned to believe we NEED 5 bedrooms 3 baths, a huge yard, a two car garage?... and the mindless, life sucking 'job' required to support it?
Back in the early to late 50's, when the real estate fallacy was just really getting cranked up, and when the average family was BIGGER... the average house was about 1/2 of what's built today.... do a little google research... find out the numbers for yourself!
You know what? Those people lived a whole lot better, with a whole lot less stress... and took a road trip vacation pretty much every year!
They say LESS IS MORE!... and if that is true... and it is for Heidi and I... the LESS of an RV... Less Cost, Less payments, less to maintain, less space to clean, less stress of worryin' about all that...
...The LESS of an RV is HUGELY more! :-)
AN RV is Shining Times ... shining a bright light on the Great American Real Estate Fallacy!
But... you say... you don't want to travel all the time? OK... Don't!
Buy a lil' piece of dirt... park your rig on it. Build a ramada over it... with CASH... maybe build a 'Lodge' room under the Ramada, to expand your living space a bit... with CASH.
... live on solar power as I did all summer... with ZERO shortages... no utility bill... = less stress...
People... there is a better way... and to my eyes... it ain't supporting the Great American Real Estate Fallacy...
Now... I can hear you; "If this is such a great idea... how come you ain't doin' it?"
Well... 'cause many years back... I blindly bought into the lie of the real estate scam too... and though I've been working to escape my mistake... for the past three years... the beast has a solid grip on me... I've been unable, as yet, to break Free...
... But I promise... and I swear... that is EXACTLY what I'm workin' to do... and EXACTLY what I intend to do... just as soon as I can fight my way loose from this Great American Real Estate Fallacy.
My only goal, here, is to try and help a few folks from gettin' sold that 'pig in a poke' BS... To give some folks the opportunity to learn from MY MISTAKES.
One thing here... and it's a Matter of Honor kind of thing. To get loose... I have to sell this house to... somebody... So... How do I do that and still look at myself in the mirror... and not be sick?
The thing is... not everybody, most as a matter of fact, are going to disagree with my 'OPINION' of real estate. The opinion that I've come to after enduring the reality of the real estate lie.
They're gonna claim that Ol' Cowboy landed on his head one too many times... He's Nuts!
OK... So let 'em. It's their right... and I'll sell this 'Place'... to one of those who still think that I'm an idiot... and 'Owning' a house still makes sense.
They can be happy in their world... and I'll be happy in mine.
Till then... Keep checking back in here once in a while... see if I'm making any progress.
I'll do my best to pass on the 'Lessons Learned' as I pursue a Lifestyle of Frugal RV Boondocking.