Over the next 11 months from now, my wife and I have a little bit of a challenge concerning the house that we have bought, the one that requires a lot of renovation. As said, we were eventually able to secure a loan for the renovation portion, but it came with some conditions.
The law in Finland is that the max a bank is able to loan is 85% of the value of the home, and when buying, that means the purchase price, regardless of the level of work that needs to be done.
For example:
If the house is 100,000 dollars, the bank can loan 85,000 and the buyers need a 15,000 deposit.
If the same house needs 50,000 in renovation work for a total of 150,000, the bank can still only loan 85,000, meaning the buyers would need 65,000 in cash to complete the work.
This has stopped a lot of people buying homes that need any work at all, as the required cash can just be too high. For example, a typical family home might be 250,000, meaning that the buyers would need a deposit of 45,000 in cash. If that house needs a new kitchen or bathroom, they would need around another 20,000 in cash to cover it, for a total of 65,000 - quite a large sum.
For a young couple for example buying an apartment, they would be forced to buy new/ renovated unless their parents were able to front the cash. In the past, they would have been able to buy one that needs work, and with a small loan, put their sweat equity into adding the value that they could later use to increase the deposit on their next home. There are massive issues that are going to come f this in the next decade to fifteen years, but I won't get into that now.
However, for my wife and I, we were able to secure a loan, but as said, there are conditions. The condition is that we need to increase the value of the property so that in 11 months from taking the loan (a week ago), the extension will be able to fit under the 85% threshold. Using the example above.
Loan 100K
Extension loan 50K
total loan 150k
This means that the value of the property has to increase from the initial 100,000 to at least 172,500 within the 11 months from opening the loan. Meaning, the renovations done with the 50,000 have to on average add a factor of about 1.5x return on value. I use these numbers, but these are not the ones we are actually dealing with, although we thankfully didn't take that kind of 2:1 ratio for the second loan.
However, we are on what is pretty much a shoestring budget for what we have to complete, and that means a lot of the work will be done by us (me), to keep costs down where we can. Of course, we need to hire professionals for much of the work too, like electrical, plumbing and the wet areas - and they aren't cheap.
On top of this, it will all have to be done during the evenings and weekends, as both my wife and I have jobs, plus I have the second job on top of running my business also. And, there will also be a three year old who likely won't have a great deal of patience watching her parents renovating all the time. As said, it'll be a challenge.
But, it'll be the kind of challenge that I am looking forward to, as it the kind of thing that I can do with my hands and then see what I have created at the end of the day, or the week as the job might require. Sure, it'll be slow going, but at the end of it, we should have a home that has been built by us - really, our home.
When I was looking at this a few weeks ago, I wrote about how I was hoping to for the first time take some Steem each month to help cover some of the costs, a can of paint here and there, the rental of a machine kind of thing. However and as I said at the time, I can't rely on that, as relying on Steem for living is not overly possible for most people - and with the current state of the platform being effectively under siege, it isn't looking like it is going to be possible in the near future either.
Steem for me has been a bit like my sense of renovating the house, as I was hoping that at the end I would have a home - at the moment, it kind of feels like after 3 years of hammering away, someone has torched it and, I don't even have insurance. But, this is the nature of the investment, as while the house is something tangible in a mature industry, crypto and blockchain resides in a highly volatile and unregulated area. They are very different kinds of assets.
One of the benefits of the house is that it is solid, however, it doesn't travel well, which is a key benefit of crypto. And although it isn't tangible, due to the security of it, it is very much verifiable, it really is digital property. But, just like if I invest the renovation money we have into enhancements that no one would be willing to pay for, for any crypto to have value, there has to be a demand for it.
Will there be a demand for Steem? What about Steem.fork1, Steem.fork2, Steem.fork3....
As they say in real estate, location, location, location, and I am expecting that there will be various forks of Steem and users will have to decide on which they are willing to put their time and effort into. Do you remember all of those people who cried "Steem sucks!!" and went to Weku, BearShares, Whaleshares and several others (is scorum still around), but where are they now?
Some people cross-post across them of course, but I think that for many, that doesn't necessarily get the best results when it comes to building a strong presence, as in order to do so, one really has to understand the ecosystem and engage audience, and each is different. Spreading too thin will be neglecting all to some degree and it becomes much like post-and-running - something I do not appreciate personally. I think that if for the last three years I only had one finger in Steem, I think I wouldn't know what I do or be where I a today. It has taken a heavy investment of time, effort and money.
And, it is an investment that has a high potential to be heavily affected by conditions outside of my locus of control, kind of like a freak storm or a lightning strike could do to a house. Except, it doesn't need to be a freak storm or very low probability event, it could just be a couple of people who have no disregard for property and community. Steem arsonists?
But, regardless of the mounting risk to Steem and the increasing potential of forks, this home is one that I am proud to be a part of for many reasons, and I am glad that I have been able to build my house among a suburb of other people who value each other. I am of course not speaking of the entire Steem community, as I do not know all and I know many who are abusive extractors in various ways too - but that is the same in any community.
There are always going to be bad actors and people who will look to cut corners and harm others to get an edge, but that is also part of the growth process. What I do know though, is that if I hire a tradesman to do a job and that person ends up cutting corners in my home, they will not be hired again, and I will be sure to mention it to others who might consider hiring them. You know, good old word of mouth.
It is funny on Steem I think, as all of our words put here are recorded, yet word of mouth is far more limited than in the real world. However, what I have found is that for those who do actually spend time developing or harming relationships, news travels.
Well, regardless of whether my Steem home burns down, it has been a highly rewarding process and journey to get to this point so far. Having said that, I am not working toward it being reduced to ashes, I will fight the fires the best I can, because the location is great and the city it could become would be fantastic.
Taraz
[ a Steem original ]
