Author Topic: Reduce housing costs to ZERO  (Read 14695 times)

Herbert Derp

  • Pencil Stache
  • ****
  • Posts: 508
  • Age: 29
  • Location: United States
Reduce housing costs to ZERO
« on: January 03, 2013, 01:42:59 AM »
I currently pay $875/month for a studio apartment. However, I think I can do better. On Craigslist I see that I can rent a room in someone else's apartment for as little as $400/month. However, I think I can do better. What if I bought a house, rented it out to cover the mortgage and other costs, and then moved into the basement (which would be illegal to rent out anyway, and not otherwise used for much)? In theory this means my housing costs could even become negative!

At the very least, my current plan is to reduce my housing costs to $500/month via the Craigslist method. What do you guys think about the idea of piggybacking for free on a house I rent to others? Regardless, I refuse to pay almost a grand a month for a tiny one-room apartment! Does anyone else want to take steps to reduce their housing costs? Note that I am a single 22-year-old, so I doubt my methods would work at all for people who have families.
« Last Edit: January 03, 2013, 01:46:06 AM by Herbert Derp »

marty998

  • Walrus Stache
  • *******
  • Posts: 6575
  • Location: Sydney, Oz
Re: Reduce housing costs to ZERO
« Reply #1 on: January 03, 2013, 02:02:31 AM »
I've heard the rationale for these things far too many times to count. But what I never understand is the privacy factor. Sure you rent out a room (or your house) and gain some cash but if I did it all I can think of is "stranger in my house opening my fridge using my toilet ewww and then how do you split bills.... repairs....shower times. Oh god I'm having nightmares just thinking about it.

Obviously you can tell I've never share-housed before. And that's just the way I like it.

Self-employed-swami

  • Handlebar Stache
  • *****
  • Posts: 1094
  • Location: Canada
Re: Reduce housing costs to ZERO
« Reply #2 on: January 03, 2013, 02:27:09 AM »
If I were single, I would do exactly that!

Herbert Derp

  • Pencil Stache
  • ****
  • Posts: 508
  • Age: 29
  • Location: United States
Re: Reduce housing costs to ZERO
« Reply #3 on: January 03, 2013, 02:53:55 AM »
It appears that in order to legally live in your own basement, the basement must be converted into a legal apartment according to the myriad of building codes and other legal bullshit. That sort of sucks and it's going to cost a lot more but I don't see why it's not doable.

-Edit-

Or here's an idea: I could technically live on the first floor apartment, but only use a single bedroom and an attached bathroom. The rest of the first floor I could rent to a roommate and I could use the basement for my own purposes, which would not be considered an apartment.
« Last Edit: January 03, 2013, 04:50:42 AM by Herbert Derp »

jpluncford21

  • 5 O'Clock Shadow
  • *
  • Posts: 83
  • Age: 34
  • Location: Tennessee
Re: Reduce housing costs to ZERO
« Reply #4 on: January 03, 2013, 05:44:59 AM »
My old roommate did that for about two years with myself and a friend of mine. I didn't know him at the time, but we had a mutual friend and it worked out well. We paid his mortgage, plus some, for the two years we were there. It was always a good time, but a house full of people does get old sometimes. If you are able to afford the house payments without roommates and are in a situation where you can afford the down payment, I would say go for it. You could make double payments, or whatever you decided to do with the extra money, as long as you kept the place rented. Issues with privacy and having "strangers" living in your house all boil down to personal opinion. I say "strangers" because in my experience, anyone I've ever lived with hasn't stayed a stranger for long. Just be smart about  who you rent to

Herbert Derp

  • Pencil Stache
  • ****
  • Posts: 508
  • Age: 29
  • Location: United States
Re: Reduce housing costs to ZERO
« Reply #5 on: January 03, 2013, 06:56:52 AM »
Living in one house with many roommates could also work, however I would prefer more privacy. The current idea I have in my head is that it would be a house that is subdivided into several apartments.

Each apartment would be self-contained, so the people inside are not considered roommates. They are tenants and I'd have a somewhat normal landlord-tenant relationship with them. The exception would be the ground floor apartment, which I would live in as well as sublet to a roommate. However, I would only occupy one of the bedrooms and a bathroom, so my roommate would have the entire rest of the apartment to himself.

I would then convert the basement into a living room, office, and cooking/dining area. I could even have a contractor install a trapdoor and ladder that goes to my bedroom, so that I don't have to pass through my roommate's area to get from my bedroom to the basement. So in effect I would have transformed the basement and the above bed/bath into its own self-contained apartment with a loft, and me and my roommate would never need to be in the same room.

The important part is to make sure that the basement is not considered an apartment in the eyes of the law. That would lead to a bunch of legal shenanigans. I think that as long as the basement doesn't have a bedroom or bathroom it wouldn't be an issue. If any of you are lawyers or knowledgeable about real estate, I'd love to hear your opinion on the legality of my idea.
« Last Edit: January 03, 2013, 07:04:53 AM by Herbert Derp »

Ben

  • Stubble
  • **
  • Posts: 123
  • Location: SC
Re: Reduce housing costs to ZERO
« Reply #6 on: January 03, 2013, 07:20:25 AM »
If you are averse enough to human contact that you want to build a trap-door and ladder to get to the basement without spotting your roommate, you probably should consider a plan that does not involve people living in your house.

The need for kitchens will make it very difficult to subdivide into fully autonomous apartments, unless you buy a huge house and do substantial renovations.  If you want to go that route, I would look for a duplex or triplex, live in one unit, and rent the other(s). If we had duplexes in my part of the country, that is the tactic I would take.

Another option is to buy a house that already has a mother-in-law suite (preferably with a separate door that exits the back of the house, and a small kitchen). You can then decide whether to live in the suite and rent out the bedrooms in the rest of the house, or live in the house and find a renter for the suite to supplement your housing costs. You probably couldn't reduce costs to zero with a single renter, but it would help.

Renters are ok with sharing commons space as long as they have some personal space as well. You can have a cleaning service come through 1x/week or every other week and include the cost in the rental.

Another alternative is to find other 22-year-olds that would be fun to live with and share any kind of house with them. A buddy of mine just bought a 4BR house and will be renting to three of his high school buddies, some of whom he has rented with before and thoroughly enjoys spending time with- an easy win-win situation.

Herbert Derp

  • Pencil Stache
  • ****
  • Posts: 508
  • Age: 29
  • Location: United States
Re: Reduce housing costs to ZERO
« Reply #7 on: January 03, 2013, 07:34:00 AM »
Where I'm from, it was common to see large houses that had been subdivided into autonomous apartments. When my parents owned real estate, two of their houses had three floors each, with one autonomous apartment per floor, and there was another such house across the street from me when I grew up. The basements of these houses were not part of any of the apartments and were just used as storage space. That's the sort of house I'm looking for.

clarkai

  • Stubble
  • **
  • Posts: 217
Re: Reduce housing costs to ZERO
« Reply #8 on: January 03, 2013, 07:51:03 AM »
Here's a different take on it.

We are currently renting a 4 bedroom, 2 bath house for $1200/month. We (my husband and I) live in an attached garage that was redone into a bedroom + huge closet + private bathrooms. We currently have 2 sublet/renters, who pay 2/3s of the rent and 1/2 of the utilities. We could, theoretically, rent out the 3rd bedroom (which currently serves as a study room between the two renter's bedrooms) and have the renters pay all of the rent and 3/5ths of the utilities. Around here, $400 is in the middle to low range for a bedrooms.

However, both my husband and me think that not paying any rent when we ourselves are renting is kind of morally on the fringe. We wouldn't have such hesitations if we owned the place, but when renting, it feels different for some reason.

That said, both my husband and I like having people in our house, and we find that they quickly stop being strangers. Of course, we don't have to share a bathroom, so that helps a lot.

Jack

  • Magnum Stache
  • ******
  • Posts: 4734
  • Location: Atlanta, GA
Re: Reduce housing costs to ZERO
« Reply #9 on: January 03, 2013, 08:28:31 AM »
Here's my advice: find a realtor to act as your buyer's agent, tell him "I want a multifamily building that can cash-flow with me occupying one of the units" (along with all the rest of your price/location/features requirements, of course) and let him have at it finding one for you.

Based on your comments, especially the bit about the trap-door (which isn't such a great idea for several reasons, notably safety and resale value), I think you're best off buying something configured the right way from the start, and with the benefit of professional advice.

However, both my husband and me think that not paying any rent when we ourselves are renting is kind of morally on the fringe. We wouldn't have such hesitations if we owned the place, but when renting, it feels different for some reason.

Maybe you're just uncomfortable knowing that your landlord is being dumb and leaving money on the table? (Or maybe the landlord doesn't know about this arrangement, and you're uncomfortable about deceiving him?)

If I were your landlord I would be pissed and force the agreement to be restructured such that I would get the profit next time the lease came up for renewal. However, if I were in your position I'd happily stay there with no moral qualms whatsoever: your landlord is running a business, and his [in]ability to extract the profit from it isn't your problem.

BPA

  • Handlebar Stache
  • *****
  • Posts: 1191
Re: Reduce housing costs to ZERO
« Reply #10 on: January 03, 2013, 08:35:46 AM »
I like the idea.  I am currently renting to my brother.  While I charge him lower than market rent (because I love him and want him to stick around), it works well for us.  For those who don't want to live with "strangers," although I agree they aren't strangers for long, friends and family might be an option.

Don't knock some of those legalities too much, Herbert.  One chat with a firefighter will change your mind about living in illegal basements.

Self-employed-swami

  • Handlebar Stache
  • *****
  • Posts: 1094
  • Location: Canada
Re: Reduce housing costs to ZERO
« Reply #11 on: January 03, 2013, 08:51:42 AM »

Don't knock some of those legalities too much, Herbert.  One chat with a firefighter will change your mind about living in illegal basements.

Yep.  There have been a number of fatal fires in my city within the last boom cycle, because of illegal suites. :(

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 28234
  • Age: -999
  • Location: Seattle, WA
Re: Reduce housing costs to ZERO
« Reply #12 on: January 03, 2013, 09:12:04 AM »
Jack's got good advice.  Buy a fourplex, live in one unit rent free while the three tenants pay off the mortgage and possibly even provide cash flow.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

Jack

  • Magnum Stache
  • ******
  • Posts: 4734
  • Location: Atlanta, GA
Re: Reduce housing costs to ZERO
« Reply #13 on: January 03, 2013, 09:29:32 AM »
Jack's got good advice.  Buy a fourplex, live in one unit rent free while the three tenants pay off the mortgage and possibly even provide cash flow.

People here keep telling me that... I just wish I was better at following it myself!

clarkai

  • Stubble
  • **
  • Posts: 217
Re: Reduce housing costs to ZERO
« Reply #14 on: January 03, 2013, 09:35:46 AM »

Maybe you're just uncomfortable knowing that your landlord is being dumb and leaving money on the table? (Or maybe the landlord doesn't know about this arrangement, and you're uncomfortable about deceiving him?)

If I were your landlord I would be pissed and force the agreement to be restructured such that I would get the profit next time the lease came up for renewal. However, if I were in your position I'd happily stay there with no moral qualms whatsoever: your landlord is running a business, and his [in]ability to extract the profit from it isn't your problem.

The land lord knows we're subletting, and even has a stipulation in the lease that we can't have more than 3 sub letters. The previous tenant lived here for 7 years and according to the landlord had sub letters coming and going at a pretty constant rate. I think he's just happy to have someone who is taking better care of the place and keeps the same people around for months/years at a time.   

Jack

  • Magnum Stache
  • ******
  • Posts: 4734
  • Location: Atlanta, GA
Re: Reduce housing costs to ZERO
« Reply #15 on: January 03, 2013, 09:40:31 AM »
The land lord knows we're subletting, and even has a stipulation in the lease that we can't have more than 3 sub letters. The previous tenant lived here for 7 years and according to the landlord had sub letters coming and going at a pretty constant rate. I think he's just happy to have someone who is taking better care of the place and keeps the same people around for months/years at a time.

In that case, quit worrying, carry on, and smile all the way to the bank!

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 28234
  • Age: -999
  • Location: Seattle, WA
Re: Reduce housing costs to ZERO
« Reply #16 on: January 03, 2013, 09:44:25 AM »
The land lord knows we're subletting, and even has a stipulation in the lease that we can't have more than 3 sub letters. The previous tenant lived here for 7 years and according to the landlord had sub letters coming and going at a pretty constant rate. I think he's just happy to have someone who is taking better care of the place and keeps the same people around for months/years at a time.

In that case, quit worrying, carry on, and smile all the way to the bank!

Agreed.  In essence, the landlord is happy, as they are getting the rent they want from a stable tenant (you) who will pay regardless of if other tenants are there.  You are getting to live "free" via putting up with the hassle of finding and screening other tenants, having less living space, etc.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

kudy

  • Pencil Stache
  • ****
  • Posts: 945
  • Age: 37
  • Location: RV Traveling the U.S.
Re: Reduce housing costs to ZERO
« Reply #17 on: January 03, 2013, 10:24:14 AM »
I dream of building a tiny house on a trailer bed or getting an RV, and then renting out my house while living in the driveway; unfortunately, there's a 98% chance my HOA would not be happy with the mobile housing permanently parked in the driveway.  I also assume having their landlord so close and in such an unconventional arrangement, would scare some people away.

Herbert Derp

  • Pencil Stache
  • ****
  • Posts: 508
  • Age: 29
  • Location: United States
Re: Reduce housing costs to ZERO
« Reply #18 on: January 03, 2013, 12:27:48 PM »
After getting some sleep, I believe I over thought things; my idea was naive and unrealistic. This concept works just fine without using a basement as half your apartment. In any case, I am going to do the Craigslist thing first because if I want to buy an apartment building I need to save more money for a down payment and build credit.

I don't think I could move forward with this plan for at least another year. Plus, after subletting for a while I will know how much I enjoy living with random people.
« Last Edit: January 03, 2013, 01:51:38 PM by Herbert Derp »

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 28234
  • Age: -999
  • Location: Seattle, WA
Re: Reduce housing costs to ZERO
« Reply #19 on: January 03, 2013, 06:27:32 PM »
Sounds like a much more realistic plan.

That is the nice thing about a fourplex; aside from potentially hearing them through a shared wall, they're completely separate apartments without interaction. It's not like having a roommate.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

totoro

  • Handlebar Stache
  • *****
  • Posts: 2102
Re: Reduce housing costs to ZERO
« Reply #20 on: January 03, 2013, 08:26:51 PM »
We live in the third unit of our triplex essentially for free.

destron

  • Bristles
  • ***
  • Posts: 377
  • Age: 41
  • Location: Seattle
    • Mustachian Financial Calculators
Re: Reduce housing costs to ZERO
« Reply #21 on: January 04, 2013, 07:39:43 AM »
What if I bought a house, rented it out to cover the mortgage and other costs, and then moved into the basement (which would be illegal to rent out anyway, and not otherwise used for much)? In theory this means my housing costs could even become negative!

This is entirely possible. In fact, it is not even that difficult to do if you are in the right market. I live in a 4-bedroom house with a single renter and it only costs me $600/month (I count principal as money in the bank). I could easily have another room rented. My friend has a duplex and rents out the main house for enough to pay the mortgage and tax. She essentially lives for free. -- And we are in a very expensive market, Los Angeles.

What you WILL need is a down payment. If you can put down 20%, you can avoid PMI.

BPA

  • Handlebar Stache
  • *****
  • Posts: 1191
Re: Reduce housing costs to ZERO
« Reply #22 on: January 04, 2013, 08:27:25 AM »
What if I bought a house, rented it out to cover the mortgage and other costs, and then moved into the basement (which would be illegal to rent out anyway, and not otherwise used for much)? In theory this means my housing costs could even become negative!

This is entirely possible. In fact, it is not even that difficult to do if you are in the right market. I live in a 4-bedroom house with a single renter and it only costs me $600/month (I count principal as money in the bank). I could easily have another room rented. My friend has a duplex and rents out the main house for enough to pay the mortgage and tax. She essentially lives for free. -- And we are in a very expensive market, Los Angeles.

Excellent point.  Really, my brother pays me only $250/month so that means I'm only paying about $150/month in interest.  I like your way of thinking.
What you WILL need is a down payment. If you can put down 20%, you can avoid PMI.

Nate R

  • Bristles
  • ***
  • Posts: 340
  • Age: 34
  • Location: Milwaukee, WI (Bay View)
Re: Reduce housing costs to ZERO
« Reply #23 on: January 04, 2013, 08:50:10 AM »
I've had similar thoughts on what my wife and I want to do.

We live in a cheap SFH now, but would like to move to a different neighborhood for the long term. But prices in that area are fairly high for single families, and real estate taxes in my area are pretty high. So even a paid off SFH home in this area would cost me $250-400/mo in taxes alone.

On the other hand, if we buy a duplex and rent out the 2nd unit, we can eventually pay off enough of the balance to get to the point that our housing costs would be zero. That to me is VERY attractive. (And the premium on a duplex in that area over a SFH is less than the 75-112K I'd need in the bank for a 4% W/D rate to cover taxes on a SFH)
  I would assume over time rents would increase enough to offset increases in insurance and property taxes, so I would think I could likely maintain that cost of zero or less. (When the other unit is rented.)  Lots of old duplexes around there. (Up/down, not side by sides.) Many are a full 2 stories with unfinished attics with decent headroom. We're thinking of buying one in that format, and eventually maybe finish off the 3rd floor attic. Then we could live on floors 2-3 in the upper unit, and rent out the lower unit. (Lowers often command more rent than an upper would, too.)

idjces

  • 5 O'Clock Shadow
  • *
  • Posts: 20
  • Age: 32
  • Location: Australia
Re: Reduce housing costs to ZERO
« Reply #24 on: January 05, 2013, 01:22:46 AM »
Bit late to the thread but am almost in this situation.

Brought a house 3 months ago with 10% down, had been saving for the last year. It's a 4/2 house with an extra living room which i plan to turn into a room after a bit more research on the topic.

I took the master room, and filled up the other rooms (totaling 3 couples and 1 single guy).  Under the current arrangement i receive $390 weekly in rent from them, all bills split 7 ways (of which gf pays mine since I've always payed the rent/housing costs).

Mortage interest (5.59%) worked out to $1650 for the previous month.

Not sure what the other ownership expenses total to, insurance is $30/month, taxes maybe $1-2000 a year.

Must be getting pretty damn close to zero living costs :)





Personally, i love living with flatmates, have pretty much done so since uni life (8 years ago). We're all mates, if you want someone to socialize with they're just down the doorway so to speak. We always have small parties/gatherings on the weekend and half the people already live here.

I'm pretty easy going though, the girlfriend seems to have trouble living with other people at times - most of the people we've ever lived with together :)




marz1982

  • 5 O'Clock Shadow
  • *
  • Posts: 73
Re: Reduce housing costs to ZERO
« Reply #25 on: January 05, 2013, 02:01:51 AM »
As another house sharing/renting idea, my MIL had an average size 2 floor house.  When her husband passed away, she split the house in two, not bottom level/top level, but half/half. 

The existing housing plan was that the master bedroom (with en-suite) had a study built on top of it (which they had built years ago), and the rest of the house contained a kitchen, 2 other bedrooms, lounge and bathroom.   She simply closed the bedroom door that connected the master bedroom to the rest of the house, and added a small kitchenette to the study room upstairs.  Voila - instant private "suite" to be rented out to a bachelor or young couple that doesn't mind a small living space.  The bedroom and study already had their own doors outside, and a private patio.

She makes a tidy amount renting that "room" and the converted garage space outside that she also managed to squeeze a private suite into. 

She's a very smart woman!

As an aside, subletting over here is *severely* frowned upon, mainly because of the perceived wear on the house.  If the landlord expects 2 adults, 1 kid to be in the house, they would not be happy to hear that you've sublet the extra bedroom to another couple.  I guess that's different in the US.

kudy

  • Pencil Stache
  • ****
  • Posts: 945
  • Age: 37
  • Location: RV Traveling the U.S.
Re: Reduce housing costs to ZERO
« Reply #26 on: January 05, 2013, 10:00:30 AM »
I took the master room, and filled up the other rooms (totaling 3 couples and 1 single guy).

Wow! Sharing 2 bathrooms with 7 people must be hard. Is it a relatively large house? I rented a big house while in school, and at most we had 6 people living in it at one time... I remember the kitchen was pretty much always a disaster.

Debbie M

  • Stubble
  • **
  • Posts: 106
Re: Reduce housing costs to ZERO
« Reply #27 on: January 05, 2013, 01:55:42 PM »
I went directly from shared dorm rooms to shared apartments to still having a housemate when I bought my own house.  I never had a nightmare housemate, probably out of good luck.  But with the more fun ones, I stayed home more often, and with the less fun ones, I went out more.

The roommate paid for half the mortgage payment and half the utilities; I paid for all upkeep and repairs.  Utilities for a 960 square foot house were double those for a 670 square foot apartment; you get charged for more stuff.

We once rented half a duplex from a lady living in the other half who admitted that she got her entire mortgage payment from us.  Yet she still complained that she had to use vacation time from her job to stay home and wait for the locksmith when our lock broke.  We did not feel sorry for her.  After we left, she found someone to pay even more (they were from New York City).

When we fantasize about living in a trailer and renting out the house or vice versa, our trailer is in the back yard rather than in the driveway, and it's a beautiful Spartan, not an eyesore.

I always liked having a landlord nearby--easy to reach to pay rent or report a problem.  But then I didn't have loud parties or invite people over for dog fights or whatever.  I was even happy to have them let themselves into my place to do repairs and spray for bugs or whatever while I was at work--it was so nice not to have to be there for them.

idjces

  • 5 O'Clock Shadow
  • *
  • Posts: 20
  • Age: 32
  • Location: Australia
Re: Reduce housing costs to ZERO
« Reply #28 on: January 05, 2013, 07:15:02 PM »
I took the master room, and filled up the other rooms (totaling 3 couples and 1 single guy).

Wow! Sharing 2 bathrooms with 7 people must be hard. Is it a relatively large house? I rented a big house while in school, and at most we had 6 people living in it at one time... I remember the kitchen was pretty much always a disaster.

The previous house i lived in had more people (a lot of our friends which had been relocating from NZ). Looking at the other houses nearby (with 4 cars outside each house), i'd assume that a lot of people nearby have somewhat similar living arrangements.

No we don't seem to have problems with the bathrooms, perhaps because no-one needs to use them for long periods of time :).

The kitchen is probably a bit more restricted to use, our meal time's have kind of spread out so we can use it easily. The single guy typically eats dinner late at night, i eat really early since i work nightshift, etc

totoro

  • Handlebar Stache
  • *****
  • Posts: 2102
Re: Reduce housing costs to ZERO
« Reply #29 on: January 05, 2013, 07:56:41 PM »
You can take this one step further and make money while living for free.  This works particularly well if you are flexible in your schedule, ie. through early retirement or working in two locations, and own more than one place that you can move between while you rent out the other place furnished for weekly rentals.  Works well if you have a summer and winter vacation rental. 
   

Nudelkopf

  • Pencil Stache
  • ****
  • Posts: 899
  • Age: 28
  • Location: Australia
Re: Reduce housing costs to ZERO
« Reply #30 on: January 06, 2013, 03:18:50 AM »
Looking at the other houses nearby (with 4 cars outside each house), i'd assume that a lot of people nearby have somewhat similar living arrangements.
Or... They only pretend to be mustachians by making you believe that 4 adults live in that tiny house, whereas in reality it's one young guy with 4 cars. lol. Maybe.

keith

  • Bristles
  • ***
  • Posts: 311
  • Age: 35
  • Location: Seattle/eastside
Re: Reduce housing costs to ZERO
« Reply #31 on: January 11, 2013, 05:15:17 PM »
At the very least, my current plan is to reduce my housing costs to $500/month via the Craigslist method.

Late to the thread, but wanted to add that this is exactly what I'm doing now. I'm young and single, so I have no problem sharing a place with others.

I'm renting a single room in a large house (7bd/3bth). I only have to share a bathroom with one other person, which is nice. All the other tenants are young working professionals and we get along. Its sort of a dorm style situation really which is pretty fun.

Doing this to keep my housing expenses as low as possible until I am ready to purchase my own place.

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 28234
  • Age: -999
  • Location: Seattle, WA
Re: Reduce housing costs to ZERO
« Reply #32 on: January 11, 2013, 05:40:01 PM »
Yeah, if you're young and single, it's a good route to take.

My best friend rents a room in a house in the Seattle area for $250/mo.

He's planning on his total expenses being about $500/mo. this year.

He just quit his job after saving up some FYou money to take a year or more off and live off savings/tiny income streams (not much is needed with a yearly budget of 6k).
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

fidgiegirl

  • Handlebar Stache
  • *****
  • Posts: 1085
Re: Reduce housing costs to ZERO
« Reply #33 on: January 11, 2013, 05:43:20 PM »
Interesting challenge.

If we sold our properties, we could increase our net worth by $300K.  We would earn the other $200 through the next two years, but wouldn't be able to save it all.

Somehow I think it's a hole in the math to count your mortgages against your net worth but not count the value of the homes toward it.  All you did was liquidate that asset, but you still had it before.  I thought when reading about net worth calculations you count both the value of the asset as well as the liability, or you count neither one.  Am I wrong on this point?  No one raised it yet.

Overseas move is not going to happen, though I find it extremely interesting.  I did live abroad myself about 10 years ago but worked in a non-profit and did not earn big bucks, not by a long shot.  But the experience was life-changing.

I am not trying to be a pickpants on your data.  I think it's cool what you've done!  :)  Thanks for sharing the love - that's what this place is about - blowin' the lid off of it!

fidgiegirl

  • Handlebar Stache
  • *****
  • Posts: 1085
Re: Reduce housing costs to ZERO
« Reply #34 on: January 11, 2013, 05:44:43 PM »
Well shit, guys, that was meant to go under the $500K in two years thread.  How the heck did I do that?!  Sorry . . . mods?  Help?

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 28234
  • Age: -999
  • Location: Seattle, WA
Re: Reduce housing costs to ZERO
« Reply #35 on: January 11, 2013, 06:31:55 PM »
Hmm.. Without me doing messy splitting/merging topics to move it, the easiest way is for you to cut and paste the comment as a new reply into that thread, and then post in this one when you've done so, and I'll delete the above two comments, this one, and the confirmation one.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

needmyfi

  • Stubble
  • **
  • Posts: 213
Re: Reduce housing costs to ZERO
« Reply #36 on: February 06, 2013, 07:39:13 PM »
Old thread -I know.  Just wanted to say I did a very similar thing.  Bought a fourplex when I was still in my twenties.  Positive cash flow from day one.  Expanded into a second apt. (half the house) in my 30's when I got married.  By then (actually shortly after I think) it was paid off.  Worked out for me.

funnybunny

  • 5 O'Clock Shadow
  • *
  • Posts: 17
Re: Reduce housing costs to ZERO
« Reply #37 on: August 19, 2013, 01:40:19 PM »
I know this is an old thread but I just joined the forum so I wanted to offer my input.

I think this is a great idea. In fact that's what I'm doing. I have a 3 bedroom house so I'm renting out 2 of the rooms which covers most of my mortgage. I'm about to take it a step further and build a guest room in the back yard and rent out the 3rd room in the house. This will cover my mortgage and utilities. I plan on doing this for 5 years until I will have enough savings to pay off the house.

Daleth

  • Handlebar Stache
  • *****
  • Posts: 1201
Re: Reduce housing costs to ZERO
« Reply #38 on: September 03, 2013, 06:16:20 PM »
We're doing much the same. We owned two rental properties that brought in a big net cash flow and then just bought a property to live in that has two buildings on it, one a house zoned 2-family but not set up as two family (only one kitchen, no separate entrance), the other light commercial (with a stable tenant already in it when we bought). We converted the main house to add a kitchen and separate entrance. Now our tenants are completely paying all three mortgages (two of which are 15-year with a bit over a decade left on each), and giving us about $200/mo on top of that. And I mean they're paying the mortgage, taxes and insurance.

As I see it, to make money you can sell either your time (salaried or hourly work), your space (real estate), your stuff (anything from garage sales to eBay to manufacturing) or your ideas (inventions, artwork, books you wrote--basically intellectual property). My preference would always be to sell space (that is, own more space than I need and rent the extra out) or intellectual property, because those options leave the greatest possible amount of my time free for other things.

totoro

  • Handlebar Stache
  • *****
  • Posts: 2102
Re: Reduce housing costs to ZERO
« Reply #39 on: September 03, 2013, 07:55:58 PM »
We're doing much the same. We owned two rental properties that brought in a big net cash flow and then just bought a property to live in that has two buildings on it, one a house zoned 2-family but not set up as two family (only one kitchen, no separate entrance), the other light commercial (with a stable tenant already in it when we bought). We converted the main house to add a kitchen and separate entrance. Now our tenants are completely paying all three mortgages (two of which are 15-year with a bit over a decade left on each), and giving us about $200/mo on top of that. And I mean they're paying the mortgage, taxes and insurance.

As I see it, to make money you can sell either your time (salaried or hourly work), your space (real estate), your stuff (anything from garage sales to eBay to manufacturing) or your ideas (inventions, artwork, books you wrote--basically intellectual property). My preference would always be to sell space (that is, own more space than I need and rent the extra out) or intellectual property, because those options leave the greatest possible amount of my time free for other things.

I strongly agree.  Renting space to cover living costs frees up a lot of life energy.  Worth putting the time in to find the right place and fix it up properly.