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The world can go south at any moment, and the sooner you have everything ready for it, the better. Being self-sufficient with your energy, your supplies and your logistics is the only way to survive when the general infrastructure of the country goes down – aka SHTF. The American people are becoming more and more aware of the importance of early self-sufficiency. This is not just a passing trend: the consulting company Accenture forecasts that 12% of Americans will be off the grid by 2035. You can make the switch today, but are you aware of the financial costs involved? A self-sufficient homestead requires its own infrastructure, and you need to find a way to afford all of that. Selling your house will help, but if you don’t have your shelter ready to move in, doing so might not be the best idea at the time. Here are some alternative ways to finance your homestead project without becoming homeless in the meantime.
Just as any other major life change, moving to a self-sufficient shelter means that you have to sit down and do your homework. When you live connected to the grid and in a standard city or town, you take many things for granted, but now you will need to become aware of each one of them. Electricity should be one of your major issues to discuss. You have to weigh self-sustaining power systems such as a solar energy system, geothermic power or hydroelectric power.
The availability of resources where you are going will determine which system is most convenient for you, but all of them will cost. For example, if you want to go solar then prepare to pay at the very least $27,000 upfront. The cost of a hydroelectric system varies more because it depends on the geography; it starts at about $20,000 but could rise up to $100,000 depending on the slope and water intake. You can replace some of your electric energy consumption with propane gas or LPG, but you are less likely to find a source of usable gas bottles if the world out there crumbles down.
Besides your standard removal costs, you will need to consider housing. If you want to purchase land to start with the construction, the price will vary greatly from area to area. Some people decide to move away without buying a property, and instead settling for a motor home or a small cabin in the wild. The average price of a motor home is $200,000, but you can get pre-made cabin kits for three figures. Never forget that connecting your shelter to a water source will have its additional cost.
One of the main advantages of a motor home is that you have your transportation covered. If you settle for a home without wheels, you will need a vehicle, and those have expenses, too. You will need to travel for supplies, social interaction and emergencies. You are likely to own a vehicle already, but if you don’t, you must get one as soon as possible. A more challenging land like the mountains or off-road terrain will require a truck, or at the very least an SUV, and those range from $20,000 to $35,000.
If you don’t have enough savings to afford your project, then the quickest way to get the cash is a loan. If you qualify, you could get enough money to purchase land and/or a sustainable home, as well as all the equipment and installations necessary for your house to run on itself. However, you need to consider your actual chances for repaying your loan if the installments are due. Many people who move into the wild or to a homestead leave their jobs behind to embrace an alternative lifestyle, and that’s good for many things but bad for cash solvency.
Applying for a mortgage loan to fund your alternative property can also be tricky. You need to take a very close look at the terms and conditions, because many lenders will set higher interest rates for clients who want to move off the grid. Since the property you want to buy is considered non-traditional, don’t be surprised to see quotations for mortgage rates 1% higher than standard rates.
Alternative lifestyle ideologies were not the only contribution of the sixties to the off the grid movement. In 1961, the first reversed mortgage was issued. A reverse mortgage deal, also known as an equity release deal, is a kind of loan that allows you to release the capital from property you already own. It’s like a traditional mortgage, but instead of repaying in monthly installments, you leave your property to the lender once you have passed away. Most schemes don’t require you to pay a single cent at all.
Reverse mortgages are particularly interesting because they give you either a lump sum or a monthly flow of cash – depending on the arrangement – that you don’t need to pay back if you don’t want to. It doesn’t tie you to your lender as a traditional mortgage would, and you’re not at any risk of eviction, since the lender cannot claim your property before you have passed away. You would even retain the right to live in your property for as long as you consider convenient. This kind of deal is especially liberating for people who want to leave everything else behind.
Setting up a self-sufficient home require an initial investment, which can be challenging to afford. There are financing schemes you can consider, and reverse mortgages in particular are very convenient for a number of reasons. Standard loans and burning off your life savings are other options, each one of them with their pros and cons. Consider your possibilities very carefully and make the move before it’s too late.