Money Saving Tips for Housing

[freeazabird]

For a lot of people housing is the biggest expense. I'm curious what hacks others have for how to save on housing? What are some low cost of living areas with decent schools? Appreciate any and all advice. Thanks!

[Ron Scott]

1. Share the cost of housing with another or others. Rent out part of your house.
2. Get the rankings of best high schools in your area of interest from a rating organization (US News does one) and compare taxes with homes you would buy. This takes a lot of work but shortcuts get confusing fast.
3. FIREd or working from home exclusively? Move to LCOL areas.
4. If you own, keep it well-maintained.
5. Enjoy stay at home vacations. Skip “travel”.

[Paper Chaser]

Property taxes and insurance are two massive, yet vague variables when considering housing costs. An inexpensive house with high taxes and/or insurance costs might be just as expensive per month as a more expensive house with lower taxes/insurance.

When people on fixed incomes lose their homes, it's often because of unforeseen increases in these areas.

[Freedomin5]

Our househacking is rather extreme but very effective.

1. Get an expat package that provides a housing benefit.
2. Buy a condo using a mortgage. Rent it out. Use rental income to pay off mortgage.
3. Househack cottage vacations by pitching in with other family members to buy a cottage. Rent out the cottage to friends when we aren’t using it to cover operational costs.

Our housing costs have basically been $0 for the past 12 years. We cover utilities, but that’s about it when it comes to housing costs.

In the past we have also saved on housing by living with roommates.

[slappy]

I think there was a thread recently advising against choosing an area just because it's LCOL. I think the biggest thing you can do is buy a reasonably priced home in the area you want to be in.  Don't buy the smallest place available just to save money. Be reasonable as to what your needs are and make a decision based on that set of criteria.

[FINate]

Oh man, we've made our share of housing mistakes over the years. And we've observed those around us make messes as well.

THE main thing I've learned over the years: a house is just a place to live. That's it, just consumption. It's not an investment, not the path to riches, not a sign that you've arrived or achieved the American Dream. Nor is it something to get emotionally attached to... just a foundation, walls, roof. There's so much dysfunction around treating housing as something it's not. There's no such thing as a "forever home" -- the amount of money wasted chasing this is staggering.

Getting more concrete:

1) Focus on locations that optimize earning potential vs. COL. Don't be in a VHCOL city *unless* you're in an industry that pays a large enough premium (after taxes!) to offset the higher costs. For most folks with average incomes, this means avoiding very expensive cities. There are a ton of second- and third-tier cities with around average COL, great quality of life, and decent schools. Places like Pittsburgh, Iowa City, Omaha, Fort Collins, Boise, Spokane, and so on. These are relatively compact cities which means short commutes (huge time and money saver), with options for neighborhoods that are very bikeable/walkable.

2) Don't get too caught up on optimizing schools. School ranking sites are a fine start, but dig into the stats to get more info one what is contributing to the high scores. In many cases the "best" schools aren't necessarily better, but rather just packed with affluent families, and affluent families typically value education and pay for outside tutoring. I would might (depending on the details) avoid very low scoring schools since this can indicate deeper structural/management problems. But a middling score and above is fine. As long as the school is functional, how well your kids learn is largely a function of what you and your kids put into it.

3) Be VERY clear on needs vs. wants. The shorter your list of needs, the less you will spend. It's okay to spend on some wants, just be very honest with yourself that these are wants that you're willing to pay for. Far better to prioritize a smaller house with less yard in a walkable/bikeable neighborhood close to work, vs. commuting from a house in the outer suburbs that's way bigger than you really need.

[AMandM]

Buy a house that doesn't come with HOA fees.

Think carefully about how much space you truly need. Will you use a formal living room and dining room as well as a family room and eat-in kitchen or breakfast area? Do your kids need separate bedrooms? Will you host enough houseguests to justify an extra bedroom? Do you really need a separate room for work or hobbies (office, studio, workshop)?

[Askel]

-Running away and living in the woods (in homemade cabin/tent/camper)

-Squatting in abandoned buildings 

-Find an unused space at work and live there

-Van life! 

-Start a commune

-Get a job that pays for your housing

-Live on a boat

I know a few folks that have done at least one of the above....  If you have the freedom and flexibility to avoid the standard housing racket (apartments/condos/suburban homes/mcmansions/etc), you can save a bunch of money and usually get some fun stories to tell. 

[ChpBstrd]

As long as the school is functional, how well your kids learn is largely a function of what you and your kids put into it.

This is so true. It seems many parents think of their kids' education like they think about service vendors. I.e. I pays my monies and I gets my top quality result. Education is not a product. Your kid won't learn to love learning unless you - the parent, the source of love - does learning things with them. That means reading books together, playing flash card games, helping with homework, etc. I see it happen over and over again - people move to a fancy neighborhood "for the schools" or pay outrageous tuition to private schools, and then take a hands-off approach to their kids' education. Then they're shocked - utterly shocked - when their kid disengages from school and starts scoring poorly.

[Catbert]

I've never done either of these but have known/heard of people who did.

Do long term housesitting.  Years ago (pre-internet and cell phones) a co-worker did this.  Initially she somehow got hooked up with a rich person who did things like 4 months in Europe.  Her contact info got passed along to their friends.  Her parents did live in the area so she had a fallback living location between gigs.  It might be even easier today with websites that can match you to people needing a housesitter. 

Another idea I remember reading about in a newspaper article a few years back.  Living in a house undergoing remodeling.  The idea being that someone living there served as security against theft or squatters.  The downside, aside from construction chaos, is that they required people to be there for xx hours every night.   

[Radagast]

When looking at specific options, put together a detailed net present value spreadsheet with every possible factor you can think of, including paying yourself at your hourly rate for mandatory commuting to work/school/groceries plus any associated transportation costs. Include utilities, depreciation, investment return expectations, inflation expectations, maintenance, HOA, insurance, everything. You won't get it right. Your estimates will be worthless, but the result of the estimating process will be enormous.

Buy a duplex/ADU and rent out a part. Maybe not at current interest rates, see above.

[roomtempmayo]

We bought our current house in part because it has a walkout, semi-finished basement with a full bathroom.  It could pretty quickly and for a modest amount of money be turned into a basic one bedroom rental.

It's not an option we want to use since the basement is our laundry room, storage, gear shed, and spare bathroom, but knowing we could generate an additional $1200+/mo if necessary is a nice fallback if we ever need it.

There's also a chance that in the future we rent the whole house out, in which case we'd almost certainly split off the basement into an apartment and rent the property as two units.

[Metalcat]

I happen to own 3 properties, all very affordable across eastern Canada, even though housing prices here are batshit insane.

I seek out properties in the locations where few people are willing to live. I happen to personally like a lot of locations where people actively don't want to live, so it works out really well for me.

I've purchased all 3 properties in the past few years, and one is a duplex, so I own 4 homes for just over half of what the average home costs in Canada.

None of the locations are ideal, but they each have a lot to offer, so currently we split the year between two locations because owning two homes in two locations is still several times cheaper than buying one in a location that offers everything we want.

[Freedomin5]

Regarding the "decent schools" question...I think the more important factor is to live in a location that offers lots of opportunities - both school and non-school related - that allows children to explore their interests. So maybe the school itself is middling at best, but perhaps there are cultural centers, nature, a university with lots of opportunities that open to the public where interested folks can expand their knowledge, etc. Having the opportunity to pursue and develop interests and passions, with access to folks in those areas who can help further knowledge, is perhaps more important than going to a school that has great test scores.

[Metalcat]

Regarding the "decent schools" question...I think the more important factor is to live in a location that offers lots of opportunities - both school and non-school related - that allows children to explore their interests. So maybe the school itself is middling at best, but perhaps there are cultural centers, nature, a university with lots of opportunities that open to the public where interested folks can expand their knowledge, etc. Having the opportunity to pursue and develop interests and passions, with access to folks in those areas who can help further knowledge, is perhaps more important than going to a school that has great test scores.

Yeah, I have very wealthy immigrant friends who recently switched their kids from a very high end private school to a particular school for cultural and language reasons but the school is known for being abysmal at math and English. They compensate for this with a tutoring program that the kids actually really love much more than their previous "high end" school.

Kids don't have to go to great schools to be well educated.

Sometimes invested parents and engaging resources are even better than highly rated schools.

I did NOT get my love of learning from school. I became a voracious learner because my dad spent an enormous amount of quality time with me and we would work on educational projects together. If I asked any question, which I did often because I was a kid, my dad would never give me answers, he would say "let's go check the encyclopedia" or "let's go to the library and see if we can find the answer."

Unless the question was about music, which he was happy to be the "authority" on and would quiz me relentlessly about obscure 60s music trivia, all other knowledge was something to be discovered, not dictated.

And he was committed to the bit. We spent an astronomical amount of time in libraries together.

I'm dyslexic and can actually barely read, but that practice made me incredibly good at skimming for information, which made me an extremely successful student.

School taught me some reasonably useful stuff, but my dad taught me how to learn.

[sonofsven]

For a lot of people housing is the biggest expense. I'm curious what hacks others have for how to save on housing? What are some low cost of living areas with decent schools? Appreciate any and all advice. Thanks!

Well, when I was younger my approach was to buy fixers that needed everything and do the work myself, in addition to my everyday work as a contractor.
Having building skills definitely helped, but you don't need to be an ace contractor to buy a fixer and fix it up slowly while living there.
Eventually, when you're done with the work, and, hopefully, the house as appreciated in value, you can sell and pay zero capital gains taxes (there are some limitations) and start the process over again.

[elysianfields]

Our househacking is rather extreme but very effective.

1. Get an expat package that provides a housing benefit.
2. Buy a condo using a mortgage. Rent it out. Use rental income to pay off mortgage.
3. Househack cottage vacations by pitching in with other family members to buy a cottage. Rent out the cottage to friends when we aren’t using it to cover operational costs.

Our housing costs have basically been $0 for the past 12 years. We cover utilities, but that’s about it when it comes to housing costs.

In the past we have also saved on housing by living with roommates.

It's humbling that the Foreign Service covers our housing, including utilities (save for internet) when we're overseas, so we've got number 1 down.  Rent on a comparable place back in DC would set us back $40-48k / year, a significant savings for sure.

We bought a SFH in a HCOL area before joining the FS, and have rented in out for many years now.  We've been lucky, and our SFH has provided better return than a condo in the same area.

We haven't tried number 3, but we do sometimes stay with family without wearing out our welcome.  When we want to explore a new area, we AirBNB.

[2Birds1Stone]

early in our accumulation phase, we had roommates and other cohousing arrangements. Now we rent below our means and house/pet sit while traveling.

[Freedomin5]

Our househacking is rather extreme but very effective.

1. Get an expat package that provides a housing benefit.
2. Buy a condo using a mortgage. Rent it out. Use rental income to pay off mortgage.
3. Househack cottage vacations by pitching in with other family members to buy a cottage. Rent out the cottage to friends when we aren’t using it to cover operational costs.

Our housing costs have basically been $0 for the past 12 years. We cover utilities, but that’s about it when it comes to housing costs.

In the past we have also saved on housing by living with roommates.

It's humbling that the Foreign Service covers our housing, including utilities (save for internet) when we're overseas, so we've got number 1 down.  Rent on a comparable place back in DC would set us back $40-48k / year, a significant savings for sure.

We bought a SFH in a HCOL area before joining the FS, and have rented in out for many years now.  We've been lucky, and our SFH has provided better return than a condo in the same area.

We haven't tried number 3, but we do sometimes stay with family without wearing out our welcome.  When we want to explore a new area, we AirBNB.

The Foreign Service packages are amazing. We are on an international teacher package, which are pretty good, but the ones from the Foreign Service and MNCs are better.

[GilesMM]

Never buy more than you need and don’t overestimate what you need. Most dining rooms and guest rooms are wasted space. Don’t size the house for your max annual needs. Go small. Less is more for capex and opex. If you have more budget, go for location. Where you live is infinitely more important to your quality of life than the physical space in which you live.

[deborah]

It can cost a lot to move, especially if you’re selling one place and buying another, since there are a lot of transaction costs. The fewer possessions you have, and the smaller the space you use, the less the cost to move. Buying each place with the intention of having it as a good rental, or of staying there for longer than a few years will pay off.

[Morning Glory]

Ignore trends when it comes to house remodeling/beautification.  Strike the word "dated" from your vocabulary.  As long as everything is clean and functional, nobody will care about the color of your countertop or whether your appliances match. Spend some time browsing on mcmansion hell as an antidote to HGTV or whatever.

[Freedomin5]

Also, the smaller the space, the less it costs to heat and cool and furnish.

[Metalcat]

Ignore trends when it comes to house remodeling/beautification.  Strike the word "dated" from your vocabulary.  As long as everything is clean and functional, nobody will care about the color of your countertop or whether your appliances match. Spend some time browsing on mcmansion hell as an antidote to HGTV or whatever.

Sooo this.

My last 3 places have all had "dated" kitchen cabinets, and by dated, I mean hideous. But they were hideous because they were in bad shape or ugly colours. Nothing some paint or staining couldn't radically improve.

People would constantly ask me when I planned to replace my cabinets and I would look at them like they had 3 heads, open and close my cabinet doors for them, take out a can and place it back and say "they open, they close, they can hold items, why the fuck would I replace them??"

I'm very picky about the esthetics of my homes, but I lean into their age and character. I design with a combo of elements that are true to the age of the place contrasted with ultra modern elements to give each space its own personality that looks nothing like HGTV.

My condo was built in 1972 and you absolutely feel that in the design, but not like a horrible time capsule where the whole house looks 70s, just that I'm not trying to erase it's age from the design.

Like, I like mid century modern furniture as much as the next person, but I hate when designers make an entire space like a cosplay of a 60s home. That just feels contrived to me. It's also freakishly expensive.

By leaning into the age but not cosplaying the age, I can pick and choose older and more modern elements largely based on what's cheapest.

In my 110 year old house I refinished the cabinets that were custom made, probably in the 50s/60s, but I had an 8ft empty wall and needed more counter space. There was no way to match the existing cabinets, so the options were either to replace everything or have something that doesn't match.

So I went extreme to the side of not matching. I ordered a 7' stainless steel restaurant supply work table and stainless steel bars for the wall and hung all of my pots and pans Julia Child style. So one wall of the kitchen is super rustic and the other is all modern, minimalist stainless steel, which cost me about $800 and the contrast looks cool as fuck according to me, lol.

[Note that this was mid project, you can see the cabinets aren't refinished yet]

[Just Joe]

Don't blindly trust a home inspector at purchase time. I should have known better. I should have done a proper first person inspection. But hey, he wrote me a 30 page report and overlooked some very expensive problems.

This has led to a number of projects for us as a result of the POs likely also blindly trusting their maintenance service (or DGAF?).

Over the past 4 years we've undertaken a number of significant projects to improve the property - some DIY, some hired out. The house is definitely improving slowly and affordably.

The house has good bones but the POs were often motivated by style first choices.

They took the porch railing balusters out leaving only the top and bottom 2x4 and add stainless steel cables. Naturally the railing are unsafe to lean on now and the wood is twisting in every direction. WTH?

And the POs chose a roofing company who installed a simple asphalt shingle roof incorrectly so than just a few years into the future the roof decking was rotting under almost new shingles. So we had to install a quality roof with new deck sheeting for ~$8K.