What are some typical FIRE strategies for living situations?

[DavidDoes]

It seems the most talked about method for getting to FIRE is buying and paying off a house before you retire. This makes sense, because it rids you of your largest expense come retirement, making your needed total retirement fund balance much lower. What are some other options though?

My partner and I are in our mid-30's and I'm about to start making triple digits, which will help us get us to where we need to be. Otherwise, it'd be impossible. We live in a very HCOL area. Buying a home here is out of the question. We're considering moving to a lower COL city such as Portland, buying a home there that could double as an income stream.

Is this the typical route?

[Metalcat]

Buying and paying off a house is one path to FIRE, but definitely not a given on the various paths to FIRE.

There are no rules.

It's a matter of figuring out what your priorities are: location, type of dwelling you need/want, commute, length of time you want to stay in one place, etc.

Rent, buy, house, condo, land, size, location, school districts, access to services, etc, etc, etc, these are all variables that you can scale up or down to find the right trade offs for your particular situation.

Don't try to follow "rules", that's how you fall into traps. Make real decisions based on real factors that are real FOR YOU.

Housing decisions are as big and as personal as career decisions. You cannot base them on simple metrics like: Mustachians do this or that.

Be smarter than that.

[LightStache]

Buying and paying off a house is one path to FIRE, but definitely not a given on the various paths to FIRE.

There are no rules.

It's a matter of figuring out what your priorities are: location, type of dwelling you need/want, commute, length of time you want to stay in one place, etc.

Rent, buy, house, condo, land, size, location, school districts, access to services, etc, etc, etc, these are all variables that you can scale up or down to find the right trade offs for your particular situation.

Don't try to follow "rules", that's how you fall into traps. Make real decisions based on real factors that are real FOR YOU.

Housing decisions are as big and as personal as career decisions. You cannot base them on simple metrics like: Mustachians do this or that.

Be smarter than that.

+1
In your situation, it MIGHT make sense to move to a lower COL city, but you need to look at the whole financial picture, not just housing affordability. I have owned two houses, but now I rent. Once I get to FI, I'll see how I feel about RE and then I might consider paying off a house. But I might also rent and be a nomad, or I might buy and carry a mortgage. It just depends on the lifestyle you want and tolerance for volatility.

Back to HCOL vs LCOL, when I've done an analysis of alternatives, growth of net worth is always higher in HCOL areas where salaries are higher.  I would move to a LCOL area, and I will if I decide to RE, but as long as I'm working corporate the equation points me to NY, DC, LA, SEA.

[remizidae]

I have this question too, since aside from financial considerations homeownership seems like a huge headache. Lawns, snow, homeowners' associations, utilities, repairs, UGH. Plus it would seriously limit a person's ability to change jobs without increasing her commute.

[Shane]

IMHO, the whole, "pay off a house and then you'll be set for life," thing is overrated. You still have to pay taxes, maintenance, insurance, etc., and then you're stuck living in that one place. Since we fired in 2016, my family and I have really been enjoying the flexibility and freedom of not owning any real estate.

Jeremy at Go Curry Cracker makes a good case for being Renters for Life.

[Zikoris]

I don't know about "typical", but here are some things people I know do/did.

Me and one other couple we know live in housing co-operatives. These are basically apartment complexes fully run and managed by the tenants, with no landlord or company trying to earn profits, which keeps the rent quite low because it only needs to cover the mortgage, utilities, repairs, etc. FIRE people are really great candidates for these because they depend heavily on volunteering in order to function, and FIRE people tend to bring a tremendous amount of skills and knowledge to the table there.

I know a number of people who have bought or rented a large enough space for multiple roommates, and were able to bring in enough income from the roommates to live for free or nearly free.

I've known people who lived in RVs or boats, but I never asked too many questions about it so I don't know much about the logistics.

Renting pretty basic places that lack various amenities (i.e. illegal suites) seems to drop the rent price dramatically. For example, places with shared bathrooms or only a kitchenette vs a complete kitchen start at about $600/month in my city, including utilities and wifi. These are only generally options for single people.

If frequent moving is not a dealbreaker, I had one coworker who had good luck renting houses that were slated to be torn down, and the owners just wanted tenants for six months, where the lower price reflected that. Weird-term-length places often seem to go for much less in general, tear-down or not.

Digital nomading/geo-arbitrage can also be an option depending on your work. We are strongly considering this for our long term plans, as we don't want to stay here forever.

Of course, many people go one of the standard routes instead (buying a house/renting a normal apartment). It just tends to be a lot more expensive to do things that way, but some people would rather spend more that do something else.

[Shane]

Right now, we're doing a 10 month work trade in exchange for our rent in a relatively HCOL area. Our agreement with our landlord is that we'll work ~15/week at taking care of the 4 acre property where we live in exchange for free rent, utilities, all we can grow in the garden and as many wild pigs as we can trap, butcher and put in the freezer. Recently, we found an interesting alternative school for our 10 year old daughter that happens to be almost 5K miles away. Over the phone, we've made arrangements with the school for our daughter to attend for the 2019-2020 school year. We're planning on spending next summer driving across the country, visiting national parks, relatives and friends, on our way to our new home on the complete other side of the country. We love the freedom to go where we like, stay as long as we like, and move on when we're all ready for something new.

[Linea_Norway]

It seems the most talked about method for getting to FIRE is buying and paying off a house before you retire. This makes sense, because it rids you of your largest expense come retirement, making your needed total retirement fund balance much lower. What are some other options though?

My partner and I are in our mid-30's and I'm about to start making triple digits, which will help us get us to where we need to be. Otherwise, it'd be impossible. We live in a very HCOL area. Buying a home here is out of the question. We're considering moving to a lower COL city such as Portland, buying a home there that could double as an income stream.

Is this the typical route?

You should use one of the calculators to see whether renting or buying is most profitable for you.

https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html

But in general, renting is more flexible than buying. If you think you might make your career grow faster if you are flexible and can move to other cities every few years, than renting might be a good option for you.

Moving to a LCOL area is typically something you can do when you FIRE. And then either selling your expensive house and buying something cheaper, or just pay lower rent.

[patrickza]

I'm most likely going to implement option 3. Live a nomadic life for a few years before I worry about deciding between buying or renting.

It seems that there are a few more like me out there too.

[tralfamadorian]

Another option not yet mentioned- buy a 2-4 plex where renting out the other units covers your housing costs.

It seems the most talked about method for getting to FIRE is buying and paying off a house before you retire.

Maybe this is true elsewhere in the FIRE community but in the MMM forumverse, investing that amount and paying off the mortgage on schedule is a mathematically valid option.

Another option in areas such as Seattle where $renting << $$buying, is to continue renting. As someone else mentioned above, GCC is a popular blog with FIREees who used that method.

[DavidDoes]

Thank you all so much for your views on my question.

We're definitely not opposed to renting, and we have considered cooperative living as well. Unfortunately, we haven't heard of any that take in families (we're a big family - two adults, a kiddo, two dogs, a cat).

Also, we're in rent-controlled unit right now, meaning our rent is capped at 30% of our income. Once I'm making more (hopefully this year), that is going to change. Typical rent for a 2x1 unit in Seattle is $2,700, which is 30% of about what we'll be making at first. I suppose the field I'm going into (software development) has a wide range of payscales, and my first year I'll make more than I do now, with upward opportunities, so it's not all gloom.

I feel like I should know by now (almost 31) if we're going to buy or rent. Then again, I should also be a lot further into my savings.

Thanks again, everyone!

Edit: I suppose it would make sense to rent, especially if you have to carry a loan, as that time and money spent saving for a down payment could instead be for your retirement.

[fuzzy math]

Having lived in both areas, I can tell you Portland is not that much cheaper than Seattle. depending on how picky you are about home condition and size and neighborhood you can find homes (or condos) in either local for < $500k. Don't hedge your bets on only being able to save $$ by moving.