Tuesday, May 13, 2008

House Value

The value of our house is moving up again this month, since our insurance gets renewed in May and the insurance company updated the cost of rebuilding at the same time.

As I mentioned in last month Net Worth Update, I now use an average of house value provided by our the municipal tax bill and the rebuilding cost stated on our insurance contract to calculate the value of our house. This month, that will increase by $5 500. I only report my part of the house (60%) on this blog, but that will still generate a hefty $3 300 increase in my net worth.

Personally, that doesn't make me feel any richer, but that increase in value does mean something. What we pay for the house hasn't really changed much. Some portions of it have come down, some others up, but overall the increase has been about 2%, in pace with inflation.

Would we be able to say the same if we were renting? I kind of doubt it, for one important reason. When you rent, you have very little control on the increases. Although a large part of the ownership costs leave you limited control (mortage, insurance, utilities), you have more wiggle room. If you feel that heating costs are too high, you can improve insulation. If your mortage costs are too high, you can renegociate or move your mortage. Same thing with insurance.

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