Three ways for the householder to survive the sub-prime crisis.
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This is different to the articles that usually appear on the site but I felt that operating a Bed and Breakfast business has given me some ideas which might help those householders who are facing the sub-prime housing crisis. I realise that the sub-prime crisis is severe with some U.S. householders seeing their repayments jump from $600 to $2000.
How about considering three possible strategies?
1. Leverage your household Anyway money;
2. Take in paying guests;
3. Rent out garage space to any local business needing storage space.
Anyway money is household gold and it is money that you have to spend anyway on laundry powder, surface cleaners, beauty products, vitamins and supplements. Rather than give this money to the supermarkets you could start your own business or co-operative supplying the neighbourhood with these basics. Network 21 has all the necessary household products, is not expensive to join and looks after all the ordering, delivery, bookkeeping etc. Everyone has to have soap powder and cleaning products etc. whether the times are good or bad. For further information please see a previous article, Anyway money.
Could you look at other sources of income such as paying guests in one or more of your spare rooms? Paying guests could be anyone from family, friends, friends of friends, university students, international students on an exchange programme, people transferring to the area from other offices and who need temporary accommodation, church members etc. You know your area better than me so brainstorming might bring up other ideas that I have not even thought of.
The cost of having paying guests is not high; food, washing of linen and towels, cleaning the room, basically cover it. Guidelines for costing breakfast are given in the archives of this site and costings for lunch and dinner use similar calculations. Even providing good quality meals need not be expensive and you can alternate a few basic, nutritional recipes throughout the week.
You can let out garage space for any local businesses wishing to store their deliveries. A business can quite easily run out of storage space and yet not want to go to the next level of paying for further commercial storage space. Hiring your garage space is far cheaper for the business, assuming it is clean and dry, and is another small source of revenue for the householder.
Any paying guests/business storage would help take the strain off your housing loan repayments for a time. It would pay to go and see your bank manager, outlining any concrete proposal you can come up with as that way s/he would see that you were being proactive and may even be prepared to renegotiate terms; from the bank manager’s point of view they do not really wish to repossess all these homes and would probably listen favourably to any reasonable plan. From your point of view you get to survive the crisis and consider other options other than being put out of your home.