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Welcome to the latest article in the Health Management 101 series. This article builds on the concepts discussed in our earlier articles, so before reading this you may want to catch up or revise the previous articles in this series. Our last article covered wellness maintenance and choosing the right job. Some earlier articles included an introduction to the wellness equation and advice on how to get value for money when it comes to wellness. If you're new to eRepublik you might consider reading this introductory article on keeping your wellness up or perhaps read about some good habits to avoid wellness loss when fighting.

Why buy a house?

Owning a house gives you wellness in a similar way to consuming food, but rather than buying it every day (like food) buying a house is a one-off investment in your wellness. The quality (Q) of your house, along with the wellness multiplier, determines how much health you will gain each day at day change simply from having a roof over your head. Remember the wellness multiplier we discussed in previous articles? If not you should go back and revise previous articles, in particular the introduction to the wellness equation. The wellness multiplier, which applies to food and housing, has the following equation:

wellness multiplier = (1.5 - (current wellness / 100))

So if you are on 90 wellness points at the moment, your multiplier is (1.5 - (90/100)) = 0.6. This multiplier is used to determine the wellness you gain immediately after day change each day. The product of this multiplier and the Q level of the highest Q house and food in your inventory is the amount of wellness gain, ie:

wellness gain = (1.5 - (current wellness / 100)) * (Q of food + Q of house) + (Q of gifts * number of gifts received)

Housing-related rules and issues

A couple of important rules/issues to be aware of:

* Unlike food (which is consumed when used) houses are durable. Your house does not get consumed when it is used, it stays in your inventory to be reused for wellness every day.
* Only the highest Q house you hold in your inventory at day change will be included in the wellness gain calculation. There is no point owning multiple houses.
* You cannot use a house as a complete substitute for food. If you have no food in your inventory you lose 4 wellness points at day change regardless of whether you hold a house or not. You MUST consume food every day.
* Changes are flagged for the next release of eRepublik (v2) that will involve houses degrading over time, i.e. they will not be permanent, but we don't know when that will be released or the rules around how a house will degrade.

The Investment Decision

Buying a house is not a cheap proposition and should be considered carefully like any other major purchase. Though there are many non-financial reasons why buying a house might make sense for your (e.g. convenience, reduced exposure to price fluctuation in food/gift markets) I'll just focus on the financial benefits for now. The wellness and financial benefits of owning a house vary according to your personal situation, and market prices of food and gifts (and of course the cost of your house). There are a few ways you can calculate the daily financial benefit of owning a house, the choice is really up to you considering your personal situation:

Option 1: The food equivalent cost - A Q2 house gives exactly the same wellness gain as a Q2 food, but the Q2 food is consumed daily. So you could say the market price of Q2 food is the market value of the daily increase in wellness received from a Q2 house. The current market price of Q2 food (and this varies considerably over time) is $2.20. Let's imagine a Q2 house sells for 6G, or about $300. Using $2.20 as the daily value of a house means your payback period is $300/$2.20 = 137 days.

Option 2: The gift equivalent cost - Remember that a Q2 house gives a wellness increase of (1.5 - (wellness / 100)) * 2). A Q1 gift gives exactly 1 health, and the current market price is $2.50. So you could argue that the market price of 1 wellness is $2.50. If you target an average wellness of 95 then the average daily wellness gain from your Q2 house is (1.5 - (95/100)) * 2 = 1.1. So the market value of your average wellness gain using this measure is $2.50 * 1.1 = $2.75, and your payback period is $300/2.75 = 110 days. Also bear in mind that if your wellness drops below 95 for any reason the wellness multiplier increases, as does the daily value of your house.

Option 3: The reduced marginal cost of wellness maintenance. This is the most complex method. We covered in our earlier article wellness maintenance and choosing the right job how to calculate the daily cost of maintaining your wellness. If you calculate the cost of maintaining your wellness using that method without a house, then perform the calculation assuming a house of the level you can afford, then subtract the latter from the former, you have the reduced marginal cost of wellness maintenance. That is a very personalised measure of the daily financial benefit of owning a house. I won't provide an example here, but you get the gist I hope.

What I have calculated above is the pay-back period. If you expect to be alive for longer than the payback period then you will start to recoup the investment after that period. So in our first example with a daily value of $2.20 and payback period of 137 days the total annual financial gain can be calculated as (365 - 137) * $2.20 = $501.60.

Also remember that your house is an asset that can be sold again at a later date. You do not lose the value of your investment, so in fact your net financial position taking into account the value of the house at the end of 1 year is $801.60 (your savings from reduced wellness maintenance costs plus the value of your house).

Non-financial benefits

That covers the financial reasons for your housing investment, but there are others worth mentioning:

Flexibility - A citizen is limited to receiving 10 wellness points from gifts each day. In a major battle this means you can fight 6 times instead of 5 by gifting yourself 10 times. If you don't have a house and need to use gifts to maintain your wellness you have less flexibility in managing your wellness and fighting.

Trading up - Most people don't buy a Q5 house as their first house, they start with a Q1 and gradually trade up using their savings. There is a market for trading of 2nd hand houses that will allow you to recoup the value of your investment as an offset to the cost of purchasing a higher Q house.

Automatic stabiliser - If you suffer from wellness loss by forgetting to fight or not storing enough food when you take some time off, the wellness multiplier means your house will provide significantly more benefit to you. If your health drops to 40 for example, a Q2 house will now provide (1.5 - (40/100)) * 2 = 2.2 wellness per day (at a value of $2.75 * 2.2 = $6.05 using the food gift equivalent cost).

Advice for Buying a House

Due to the high cost of housing compared to other commodities many transactions are made in the black market rather than in the marketplace. Usually these transactions are denominated in Gold rather than local currency. BUYER BEWARE, the black market is full of cheats, fraudsters and rip-off merchants who will take your gold and never provide anything in return and you have no means to recover your gold if this happens. There is no court system and admins have ceased enforcing contracts between citizens. Only deal with people you trust completely.

A great new initiative by your eAustralian government, the Australian Housing Exchange now provides a safe exchange market for housing. Subscribe to the newspaper linked above to see current offers, or PM the Australian Housing Exchange Org if you're interested in trading a house.

Also bear in mind that no tax is paid on the black market, so if the price is equivalent between an on-market and off-market seller then buying from the market will provide your country with more revenue.

Summary

This article covered the wellness benefits received from housing, and I hope helped you to evaluate the benefit and payback period of your decision to invest in a house. Buying a house is one of the larger transactions you will make in this game so it is worth considering objectively and with all information to hand. This information will change over time as market prices fluctuate and your personal situation varies, so the conceptual understanding of how houses and the housing market operate is well worth revising and remembering for your future wellness management. It will come as no surprise that I heartily recommend all citizens to invest in a house.

Wellness management and the cost/benefit of housing will change substantially with the next release of eRepublik (no date known). Houses will be durable, but not permanent. Gifts will be abolished. You will not only have to manage your wellness, but also your happiness. Stay informed and keep watching the media for more information as it comes to hand.

This will be the last article I'll write in the Health Management 101 series as my term as Minister for Health in the Xavier Griffith government is now nearing an end. I hope the series has been informative and helpful, and I'm sure the next Minister of Health will be keen to hear from you about your ideas for improving health in this great country. I'd like to say what a privilege it has been to serve in this capacity and thank the public and my colleagues for the support and encouragement I have enjoyed.

Some departmental resources:

* How to Keep Your Wellness Up - An introductory article to health
* Fighting and Wellness - Good Habits for Healthy Citizens
* Health Management 101: The Wellness Equation
* Health Management 101: Wellness and Value for Money
* Health Management 101: Wellness Maintenance and Choosing the Right Job
* Some Healthy Initiatives - Some Wellness Related Initiatives from your Government

To your good health!

Chris Carnage
Minister of Health

Kirkzzy
Deputy Minister of Health