Residential property is treated like a hotel. That is, it is primarily used as a place to sleep, eat and watch TV in the time spans between working. And if you look at the pricing and what the mortgage and property tax payments add up to, you’ll discover that the daily price of residential property is about the same as that for a hotel in the same neighborhood.
Think about that for a minute. You are paying as much as if you were living in a hotel, and you don’t even have daily fresh linen.
At some points in history, this could at least be justified by insanely appreciating prices that would allow you to flip property at a profit in no time. But for most of us, those days are over and depending on where you live about a third of homeowners owe more to the bank than the property is worth.
Though real estate can certainly be a good investment in some cases, again, right now, for a great many people it is a poor investment. At least, it shouldn’t be considered an investment. Rather, you are paying for a place to live, and paying about as much as you would for a hotel except without maid service. In this role, residential real estate is just a living expense. What to do?
It is easy to turn your residential property into an income producing asset by using your lawn to grow vegetables instead of grass. You’ll spend, on average, an hour a day — but that’s an hour you are taking away from TV rather than an hour you are taking away from paying work, so you aren’t losing anything.
What are the vegetables worth? Using MiniFarming methods, you are really growing organic food, so your apples-to-apples comparison should be to the prices of foods in the organic food aisle or at the health food store, rather than to mass-market commodities. My own experience, plus that of many others including experiments done by Mother Earth News, is that on average you can produce $5 worth of vegetables per square foot of raised bed annually.
If you plant blueberry bushes in place of ornamental (and toxic) yew trees and apples in place of maples while growing grapes and raspberries in place of ivy along fences, you will grow thousands of dollars worth of fruit every year. And don’t forget a couple of black walnuts or a blight-resistance American chestnut.
You can easily produce $5,000 worth of food with a few fruit plantings and 700 square feet of garden, and that is really a low-ball estimate.
Have you ever checked out the price of organic whole chickens? Oh yeah — as much as $20 each. I raise them in batches of 14. Two batches a year. That’s $560, minus the modest cost of feed. I keep them in a chicken tractor I built for less than $60.
How about organic eggs? $4 or $5 a dozen? While I am currently winding down my farm in hopes of moving, at peak I kept 20 laying hens that free ranged. I routinely collected seven dozen eggs ($35!) weekly. I’d resell them to coworkers at the day job and never had enough to meet demand. $25×52= $1820. I DID spend about $500 on supplemental feed, bedding and so forth. But still, that’s $1,200 a year. And that’s just in eggs. That doesn’t count the fact that their prolific droppings turn my compost pile into organic gardeners heaven.
So you have a house that you bought for $150,000. If you sold it and put that money in a CD, you’d get back maybe $2,750 per year for it. If it is mortgaged, you’re paying $1,250 month for it, and it is an expense. (And don’t forget all the utility bills.)
But adding it up, with a year round investment of an hour a day on average, maybe two hours if you are slow and enjoy it so you take your time, you can get back over $7,000 year by turning your property into something that PRODUCES something, instead of just a hotel. That’s like getting half your mortgage for free, and you don’t even pay taxes on it while still taking the mortgage interest deduction.
Turning your property into a MiniFarm is a financial winner.
Filed under: Home Economics, Self-Sufficiency
