Reduce your housing expenses – 11 Ways to Live Cheaply or For Free
We spend the largest percentage of our income on housing, and for most of us this is our biggest monthly cost. Whether it’s your rent or mortgage. In this guide I’m going to take you through all of the options you have to reduce your housing expenses, starting from the very easy to the much more complicated. If a section sounds too obvious or not tailored to you jump to the next until you find something that resonates.
So here they are all the housing options to reduce your costs:
- Rent out your rooms
- House share
- Downsize
- Slow flip
- House hack
- Be a property Guardian
- Be a caretaker
- Tiny Housing
- Work to Rent
- Alternative living
- Communal living
- Rent out your rooms
Since getting my first flat I have rented out my spare rooms. When I renovated my current house I had 4 flat mates sharing it with me. These changes can reduce your mortgage costs to practically nothing whilst you are still building substantial equity in your property.
If you rent out the value of your mortgage interest alone you will essentially be paying nothing to borrow money from the banks…..a big win.
- House Share
If you’re not at the point of owning your own home then dam well share one. The more people in a house the cheaper the bills and the less rent you pay. Yes house sharing can be a bit of a pain in the ass when you get to a certain age but it’ll help you get to your own property much quicker.
House sharing can save you hundreds of pounds a month.
- Downsize
If your home is bigger than you need/kids have flown the nest then downsizing is the perfect way to cut costs whether you are renting or buying. If you own your home you can unlock a lot of capital downsizing and invest it or buy additional property. If you don’t own your bank balance will thank you and you’ll be a home owner quicker (though possibly not as quickly as if you house share).
Use downsizing as a great opportunity to get rid of all the crap you don’t need, sell all this crap or donate it.
- Slow flip
My current home will probably end up as a slow flip. When I bought this house it needed – a new roof, new electrics, new plumbing, new heating, new windows, repointing, new flooring, new bathrooms…. basically, I bought some good quality walls as my friends like to remind me. As a result, the house was bought at a very low price. I’ve spent the last 4 years renovating this house and when it’s done I’ll have made £100,000 or more in profit if I choose to resell.
Slow flipping is a side hustle in itself – you’ll buy a cheaper home, pay a lower mortgage rate AND be adding capital growth to your bottom line.
- House Hack
House hacking can cover a lot of terms but here I want to specifically talk about the more common (American) variant of house hacking buying duplex style properties and renting out units you don’t live in. The problem in the UK for this is that we don’t have a whole lot of duplexes, triplexes etc. However, you can do this in a sneaky other way which is something I’ve considered in the past – buy a house and convert it into two or more flats. Unless you’re a builder the simplest way to do this is find a house that would easily convert into two one bed flats – many of our common terraced houses and other bigger houses are perfect for this. Essentially you’ll turn one property into 2 and use the income from on to pay for the other. Requires a hell of a lot of effort – and planning permission.
- Become a Property Guardian
I found out about guardianship from some friends of mine who lived in a school in London. Stewardship means you look after someone else’s property and in exchange you get a cheap place to live. The facilities aren’t always the best as they are often office blocks, schools or other commercial spaces but they are a very cheap way to live in very expensive cities. Searching for property guardian opportunities or apply directly through security companies like https://www.my-globe.co.uk/, Ambika Security or https://liveinguardians.com/ who specialise in these arrangements.
- Be a Caretaker
Becoming a live in property caretaker can also be a fantastic way to cut your housing expenses to practically nothing. Large blocks of flats often have live in concierge and caretaker staff. You could be responsible for day to day cleaning, repairs, dealing with residents problems and a whole range of other responsibilities from gardening to fire safety. Caretakers sometimes get to live in a property for free if the responsibilities are quite time consuming but normally get significantly reduced rent.
- Tiny Housing
The tiny house movement has become massive in America and there’s something really endearing about what are essentially mobile homes. The strategy is simple build a tiny mobile home that you can then park anywhere – or buy a small piece of land to park it on semi-permanently. In the UK this is quite a new concept and it’s not taken off massively yet. There are some planning roadblocks and hurdles and some red tape to jump through if you want to use it as a mobile home. As well as trailer style micro-homes you can also consider shipping container homes.
I really like this idea and recommend bingeing the Tiny House Nation show on Netflix (It’s research I swear). You can build a tiny house for less than £20,000 and have a home mortgage free forever.
- Work to Rent
This idea was brought to my attention by the book The Moneyless Man” which I highly recommend you read – available on Amazon here. The author Mark Boyle challenged himself to live for a year spending no money. He managed to get a caravan for free off Gumtree and negotiated a few days work a week with a local farmer to park it on his land. Whilst you might not want to live on a farm there are probably other ways you could make this work – providing cleaning and domestic chores instead of renting a room for example.
- Alternative living
You’ve probably read stories of people living in cars, vans and boats. These can be ridiculously cheap ways to save money quickly in a short amount of time – or live permanently if you so choose. I personally couldn’t give up some of my home comforts – but would love to convert a van for travel and camping trips. You can convert a van for a few hundred quid and park it pretty much anywhere (not necessarily illegally of course!). Boats and mobile homes are probably more viable for most people as they offer significantly more space and still at a much lower cost than renting or owning other property.
- Communal living
This isn’t one that particularly appeals to me but communes of various types are alive and well in the UK. There’s one locally to me in Somerset where you can live, build your own house, take part in growing and self sufficiency efforts and all you have to have is a small income to sustain you….which can be generated from the land you have around you. Communal living puts community at the heart of everything and may be for some of you.
Communal living is environmentally friendly and requires very little capital. Probably one of the fastest ways to FIRE out there if that’s your goal.
If you can think of a living option I’ve missed please let me know in the comments below as I always love to dig into new ideas!