Zero housing costs.

[Exenos]

After 7 Months of fixing up our house we bought (was in desperate need of renovation), it's at a stage where someone else actually wants to pay to share it with us!

Our monthly payments towards the mortgage is £1,000.
Out of this about 400 is towards interest, and 600 towards to capital.

We are renting the spare room for £450/month, which means the interest of the house is covered, and so technically not paying to live anywhere! Of course there's the opportunity cost of the down payment, but in my head that's largely offset by the increased house value from the work carried out.

Makes a change from renting a 1 bedroom flat in London for £1,100 a month a little over a year ago!

[Miss Prim]

Mine are not zero, but very little.  We have a fully paid off house with a basement apartment that we rent for $600 per month.  We also have a pole barn we rent out for storage.  I haven't really figured out how much this house costs us per year, but it's not a lot compared to if we didn't rent anything out.

I tell everyone that everything is for sale or rent around my house!  Still, this house is too big for us now that our kids are adults.  I want to sell, but hubby doesn't want to leave.  We also have 4 acres to take care of and it is too much! 

                                                                                         Miss Prim

[arebelspy]

We're house sitting right now, so no housing costs, including utilities.

Of course, it's only temporary. We could do it the bulk of the year, but we'd have transportation costs between them places.

Someone mooching has no housing costs.

I think it's almost impossible to truly have zero housing costs (offsetting costs with income doesn't make the costs go away, IMO, despite semantic games--it's still neat to do so though!).

[runewell]

Our monthly payments towards the mortgage is £1,000.
Out of this about 400 is towards interest, and 600 towards to capital.

We are renting the spare room for £450/month, which means the interest of the house is covered, and so technically not paying to live anywhere!

It sounds like you are paying £550/month to live somewhere.  That's different from zero.

[Exenos]

Naturally it depends how you look at it.

The way I see it, the actual cost of living in our house is the interest, which is £400, the remaining £600 is going into equity. Which we will be pulling out in a year or so.
 
Where I get zero housing costs from, is similiar to if you owned a ferrari, you get the pleasure of using it, but every other weekend you rented it out to cover maintenance + some of the purchase price. If overall, the income from renting it = how much you paid, you could say that you owned the ferrari for free.
Similiar concept to this: http://www.mrmoneymustache.com/2016/01/28/the-man-who-gets-his-cars-for-free/

Arebelspys got it correct saying the cost hasn't gone away it's just being offset, there's also the imputed rent I'm losing, I could be out living in a tent and renting my room out too!

All it comes down to, is I'm doing something that makes a life a little less comfortable but helps reach FIRE quicker, which is what this section of the forum is for :)

[Roots&Wings]

Nice! Way to go Exenos with optimizing your housing. Renting out a room to cover costs is definitely badass and a huge savings boost. Sounds like you may have lucked out with finding a good roommate too, which can be key :)

I've thought about renting out a room too, but I'm definitely not as badass and can't seem to get past the loss of privacy.

[runewell]

Naturally it depends how you look at it.

OK I see your logic now. 
From a cash flow point of view, I am right, you are paying something every month.
But from a net worth point of view you are right, it is going up every month as long as someone else is covering the interest and the value holds.  So your net housing cost after the eventual sale will be zero assuming you come out ahead on the house sale.

Do you have some sweat equity coming from the fix-up?  I have to figure there are some transactions costs and two years is a short time period to own a house, hopefully you expect to make money on the sale?

[TallMike]

My family lives at a boarding school, where I work. We do not pay any cash for our housing, nor our utilities (oil, gas for stove, water + sewer, electricity, phone, wifi, and garbage). We catch ourselves talking about "free housing" and then remind ourselves aloud that it's not free. We pay for it in labor; it's just that part of our compensation is in this non-cash form.

The tax implications of this are quite interesting: upside is almost no federal tax burden except for FICA taxes, downside is lower social security payments in the future (which, to be honest, we're not counting on anyway...)

Regardless, I agree with what I see as the two major points in this thread: there's not really such a thing as free housing, but rental income can be a huge help to offset those unavoidable costs.

Congrats on finding a housing cost arrangement that makes you fired up! Don't discount the value of how this arrangement makes you feel and what it is doing to serve your future self.

[Exenos]

Yeah I guess that's the more actuarial method; it doesn't matter really, money in - money out = money saved.

Transaction costs of the purchase came to about £4,000 so selling after just 2 years seems a waste. At the time, it looked like we would living here (just outside of London) until we were ready to FIRE, however I underestimated the pay for my line of work in the town we wish to live in permanently so may be moving there sooner than planned.

Selling still depends on whether we get work lined up first, if not, we still plan on remortgaging to a lower rate (2.19 to 1.67%) whilst borrowing more to put down on a rental property.

We picked up the house originally for a very good price, the seller was in a rush to sell as it was his late father's, and was an absolute state. Lots of work carried out by ourselves, the place is completely different. The market has also been on our side. So overall it's worked out pretty well, especially considering the alternative is to rent, which would cost us over a £1000 a month.

-

With regards to privacy, we're letting out the bigger room, with own tv/sofa/table, we've barely seen her!

[Exenos]

Also, first rent payment landed today, such a great feeling :)

[arebelspy]

Also, first rent payment landed today, such a great feeling :)

Good job.  :)

[clarkfan1979]

Also, first rent payment landed today, such a great feeling :)

It is a very nice feeling and very addicting.