Living in SF Bay Area (SJ) – how can I cut housing costs?

[Beric01]

Hi ERE forums! First a little background about me: I’m a 24-year-old working professional living in the California San Francisco Bay Area (in San Jose). I discovered Mr. Money Mustache around 4 months ago, and only a little more recently found Jacob’s blog. I have bought and read the Early Retirement Extreme book, which I found to be an amazing and very applicable book.

I’ve taken a lot of these concepts to heart: I’m now carless and travel everywhere by bike, am cooking a lot more, etc. I’m trying to cut everything I can as I don’t want to work an office forever. But one area I can’t seem to reduce on is housing costs. Housing in San Jose, one of the most expensive cities in the world, is currently eating 2/3 of my monthly costs!

My current accommodations are a small 250 square foot studio apartment about 2 miles from work and the grocery store, and walking distance to the airport and mass transit. It has a tiny kitchen, and also access to a full-service community kitchen. This is costing me $1000 a month, all utilities paid, plus $50 for internet (the cheapest plan available, sadly). I have done extensive research and the only way I could beat this price by renting an apartment is if I were low-income. This is literally the best deal on apartments out there.

First of all, I do plan to stay in this area. This additional amount of income I can make (and thus reach financial independence) far exceeds my additional costs for living here. However, I’m in a quandary for how to cut my costs further. My first thought was renting a room. Per Jacob’s book, I’ve gone on to Craigslist a number of different times and set my price limits, and it is impossible to find anything less than $800+ within 10 miles of work. And anything that is ~$800 is either:

• “females only” (I can’t believe this kind of discrimination is legal)
• foreign language speakers only (so they will reject me)
• a “commuter apartment only” (so no weekend living allowed)
• “light cooking only” (in other words instant ramen only)
• has a ton of other monthly utilities costs added on
• is at a reduced cost in order to solicit sexual favors

Ruling out these types of places, renting a room (100 square feet is more than fine for my space needs) seems to be no cheaper than my 250 square foot studio apartment!

I’ve also looked into ideas like buying an RV and renting a hookup, but couldn’t get the monthly price under around $850. I’ve even looked into more radical ideas like a storage unit or office space, but these seem extremely risky of getting kicked out. I could live in a car, but I need to try to maintain some “appearances” of respectability (I have a business job).

But I really want to cut costs and save more. Does anyone have any ideas on how I can significantly cut my housing costs until I can FIRE and move out of this area? It seems like it's even more expensive than since Jacob was here.

[JamesR]

So I'm in Toronto, I was renting a "bachelor" basement suite, basically one big room with a bathroom and kitchenette along a wall for $900/mo. There basically isn't anything much cheaper than that.

Now I'm renting a _room_ for $400/mo in shared accommodation. This setup is quite minimal, there isn't even shared living space, I'm just sharing a bathroom & kitchen with 2 other students. Is it worth saving the $500/mo difference? I think so! Edit: I guess you're saying you can't even rent a room for less than $800/mo? That sounds pretty crazy

Since you're in san jose, the weather is great for RVs (i.e. it never gets too cold). You might have to put more money up initially but it would pay for itself quick. Jacob got his RV for $4k (a market value of $8k) I think.

Another idea: Could share your place with another roommate. Partition it up somehow, hang heavy curtains or blankets. Find a discarded office cubicle. Something

[Beric01]

Since you're in san jose, the weather is great for RVs (i.e. it never gets too cold). You might have to put more money up initially but it would pay for itself quick. Jacob got his RV for $4k (a market value of $8k) I think.

This is interesting, but the only RV park I could find within 10 miles of my workplace is a "luxury" RV park that costs $700/month and requires owning a recent model. Add any maintenance on the vehicle plus the up-front costs and I'm not sure I'm coming out ahead! Of course, this could be another way to save: can one get away with living in an RV without a hookup? I know local ordinances prohibit living on the street/in parking lots, but I'll look more into this. I'm desperate.

EDIT: just found this post by Jacob! I'll have to try contacting mobile home parks now.

Another idea: Could share your place with another roommate. Partition it up somehow, hang heavy curtains or blankets. Find a discarded office cubicle. Something

I like this idea as well, though I'm not sure someone would want to share half of an already-small studio. Unfortunately the kitchen and bathroom are if anything TOO big, which doesn't leave much space! But perhaps there is someone else similarly frugal out there!


I really wish I could just rent a room, as a shared kitchen, bathroom, and laundry area would be awesome. I'll keep looking for that as well...

[JamesR]

There are also people that try to do some form of stealth RV camping around town, rather than staying in a mobile home park.

http://www.donniemyer.com/were-doing-this/1096
https://www.youtube.com/watch?v=BjiQFCunJqk (tynan.com has a bunch of articles on RVing & his Rialta in particular, which he was able to snag for $14k I believe)

[jacob]

@JamesR - You need to put a 1 in front of my RV numbers.

@Beric01 - "Hacker houses" are a standard solution to your problem in Silicon Valley/the peninsulae. That is, 4-5 people (engineers, programmers, grad students, ... typically they find each other at work) go together, rent a larger house, and split the rent. Alternatively, one person rents it and sublets the rooms.

[Sclass]

$900 seems like a good deal. I lived in a Los Altos basement (1br, sep kitchen and bath) for $700 during the last tech boom 1999.

You mentioned you're spending 2/3 of your expenses, but what are you saving? What I'm getting at is if you save a lot of your take home, the $900 is just overhead. People get paid more here specifically because employers factor in living expenses. I know this isnt what you want to hear, but there are limits. If you can keep more of your money than say a contemporary working in Antioch, you're getting ahead...or geoarbitraging as they say here.

Ok, if you want to push things you need to get creative. Get off Craigslist and start dropping flyers off in rich peoples mailboxes in Los Altos or Los Gatos. Both of my neighbors have big tool sheds...one has plumbing! I can read their minds, they want to rent them but they are really quiet about it. A lot of seniors in my area can certainly use the extra income of a border. You need to find these people. Kids have moved out, their careers ended in 2000...now they need rent from a nice Apache programmer.

As for a RV, I've told the story here about one of my techs who lived in a half shell camper in a big parking lot at his workplace. Security knew him and he just parked along the de la Cruz river which ran by the building. In the evening he unfolded some chairs on the bank and cooked on a tiny propane grill. Showered at 24 hr fitness. He said his propane generators were the big expense...but now there is solar. He saved a lot back then. Not a fancy rv. More like camping. Again, you have to do some social engineering. You're not going to get a good deal looking on CL and saying "ima tech professional and I like cheap rent."

Been there done that (15 years ago). I feel your pain...and greed. Remember it's what you keep. You are being paid a good salary right? If not, run away from here, fast.

I hang out at the business behind REI in Palo Alto. There are RVs in the alley back there right over the fence from Best Buy. The owners appear to have made arrangements with the RV people. Free security? One trailer parked on the property has a cord and plumbing hookups. On the street there are several beat RVs that have been there for years.

[Beric01]

$900 seems like a good deal. I lived in a Los Altos basement (1br, sep kitchen and bath) for $700 during the last tech boom 1999.

You mentioned you're spending 2/3 of your expenses, but what are you saving? What I'm getting at is if you save a lot of your take home, the $900 is just overhead. People get paid more here specifically because employers factor in living expenses. I know this isnt what you want to hear, but there are limits. If you can keep more of your money than say a contemporary working in Antioch, you're getting ahead...or geoarbitraging as they say here.

Ok, if you want to push things you need to get creative. Get off Craigslist and start dropping flyers off in rich peoples mailboxes in Los Altos or Los Gatos. Both of my neighbors have big tool sheds...one has plumbing! I can read their minds, they want to rent them but they are really quiet about it. A lot of seniors in my area can certainly use the extra income of a border. You need to find these people. Kids have moved out, their careers ended in 2000...now they need rent from a nice Apache programmer.

As for a RV, I've told the story here about one of my techs who lived in a half shell camper in a big parking lot at his workplace. Security knew him and he just parked along the de la Cruz river which ran by the building. In the evening he unfolded some chairs on the bank and cooked on a tiny propane grill. Showered at 24 hr fitness. He said his propane generators were the big expense...but now there is solar. He saved a lot back then. Not a fancy rv. More like camping. Again, you have to do some social engineering. You're not going to get a good deal looking on CL and saying "ima tech professional and I like cheap rent."

Been there done that (15 years ago). I feel your pain...and greed. Remember it's what you keep. You are being paid a good salary right? If not, run away from here, fast.

I hang out at the business behind REI in Palo Alto. There are RVs in the alley back there right over the fence from Best Buy. The owners appear to have made arrangements with the RV people. Free security? One trailer parked on the property has a cord and plumbing hookups. On the street there are several beat RVs that have been there for years.

Yeah, that's the problem - my current rent IS a good deal. I'm currently saving 2/3 of my take-home (counting 401(k) contributions), but would like to increase that to 80% or so. I'd like to retire with around 20K/year passive income (in today's dollars), though when I move elsewhere I most likely won't spend it all. With my current spending I can reach this goal in 9 years, which is similar to MMM, but not as much as Jacob here at ERE.

I am making a good salary - far more than I'd make any other area, particularly for a non-technical position (at a tech company). However, I'm doing some salary research and I think I'm worth up to $10K more than what I'm making. Perhaps it's worth investing some time into salary negotiation research (and/or interviewing at a different company). I see no point in burning bridges, but if I'm retiring in less than 10 years then job-hopping might actually make sense (so far I've only worked at one company for a little over 2 years now).

I like the idea of passing out flyers - there's a lot of SFH's near where I work. My lease expires January end so I have some time.

[altoid]

Is it legal to have multiple people share one bedroom? Like bunker bed, hostel style? Back when I was in Beijing in 2002, outside our campus, there were beds for rent by month, for like $50 a month. A friend of mine worked as 2nd hand landlord, and she had 8 tenants in a 2 bedroom condo. There was a locker, shared kitchen and bathroom, and it worked out great for students who wanted to stretch their money.

Doing the same thing here, will be considered crazy, I guess ?

[Beric01]

Is it legal to have multiple people share one bedroom? Like bunker bed, hostel style? Back when I was in Beijing in 2002, outside our campus, there were beds for rent by month, for like $50 a month. A friend of mine worked as 2nd hand landlord, and she had 8 tenants in a 2 bedroom condo. There was a locker, shared kitchen and bathroom, and it worked out great for students who wanted to stretch their money.

Doing the same thing here, will be considered crazy, I guess ?

Wow, I would totally do this, as long as there was enough space to store my work clothes (unfortunately I need business casual for now). I will bet I can live comfortably in 50 square feet. I don't even need a bed - a futon is fine.

And yes, this would be considered crazy.

[altoid]

I would totally settle with this arrangement as well. It was quite a pleasant experience, we all had curtains for each bed, and people were friendly too. Maybe sharing a room with 5 others is extreme, but two persons in one room will work out just fine. Of course, the hardest part is to find the roommate! Maybe you can share a room with someone who works night shift? So you don't have to see the person, but expenses got cut in half.

[Ego]

Reminds me of the cage homes in HK.



http://www.dailymail.co.uk/news/article ... tches.html

Things like this are not unusual here as well. They get caught when a neighbor complains about the number of cars.

[dot_com_vet]

If you're working in tech, there's jobs based in SF & NYC that allow telecommute. You could make SF & NYC wages, and live anywhere.

Option two, would to find a consulting gig with 90% travel, and be homeless. If one was young and liked to travel, this could be appealing.

I do think your apartment is a good deal in your current situation. Definitely not if you had a family, but I think you're in good shape for now.

[jennypenny]

Dragoncar posted a link once to Japanese style bunk/cube housing. I can't find the link now. Maybe someone remembers it?

You guys make me want to open an ERE boarding house.

[Beric01]

You guys make me want to open an ERE boarding house.

In an area this expensive I'm sure there would be demand for it, or even the cage-style housing listed above. The problem is zoning laws and ordinances will definitely not allow it, even if the demand is there. It's no wonder you have people living in their cars. I see evidence of this all the time - they're clearly not operating in "Stealth mode". Part of me wants to join in, but I'm just not that extreme yet.

[Sclass]

Good Lord people, this is third world ugly! This is where drug resistant TB and SARS breeds.

I applaud the OP for trying to put the Extreme in ERE by cutting down his single biggest expense. You've really cranked up the savings knob. I have some personal opinions about your approach, but heck, if the numbers work for you and you can take it, go for it!

As for legality, 90% of the granny unit rentals in my neighborhood are illegal in one way or another. The one I lived in from 1997 to 2002 was untaxed income...I found out when I filed for my renters rebate.

Silicon Valley is a gold rush town. The tents are expensive. There are arguments for staying out of a place like this. All of my friends got caught here - enticed by the high pay, then snared by the mortgage debt and inevitable shelf life of a tech professional. It's a trap.

But, knowing this and using some ERE strategies you can make it work for you. I think you're on the right track. Don't forget to make that 2/3 take home work hard for you...and clear out of here with your loot when you hit your goal.

[jacob]

@jp - Do you mean this? http://en.wikipedia.org/wiki/Capsule_hotel

@all - In any case, the key to making bay area rents cheap is supreme flexibility in being able to move easily and quickly. Minimalism! Be able to pack in an hour and move your possessions in a taxi/car. Unfortunately, there's very little public transport going to San Jose from/to the east bay (there's a train a couple of times each day last time I checked---when I lived there). Otherwise, that would be an obvious choice.

[Beric01]

@jp - Do you mean this? http://en.wikipedia.org/wiki/Capsule_hotel

@all - In any case, the key to making bay area rents cheap is supreme flexibility in being able to move easily and quickly. Minimalism! Be able to pack in an hour and move your possessions in a taxi/car. Unfortunately, there's very little public transport going to San Jose from/to the east bay (there's a train a couple of times each day last time I checked---when I lived there). Otherwise, that would be an obvious choice.

Yup, having thought it over this is my plan right now. I'm going to throw out all my junk (250 square feet can still hold a lot of it!) and get flexible enough such that everything I own can be moved by a single car. Then I can be opportunistic on finding the cheapest rents and shares by being mobile.

I plan to get a futon so I can avoid a bed +mattress purchase. Then my only furniture needed will be a dresser to hold my work clothes and a desk for my computer.

[jennypenny]

@jp - Do you mean this? http://en.wikipedia.org/wiki/Capsule_hotel

Yes, that's the one. It reminded me of a mausoleum for the living. A little too close to the Matrix for me.

[bryan]

I wonder how illegal it would be to put together a sort of capsule/micro/dorm rental situation mentioned in this thread?

Vandwelling is a great option for the Bay Area, thanks to the great weather and high rent, if you are able to be minimal and are fine with a little adventure. Worst parts are:

• 1) inconvenient restroom procedures (sitting on the toilet on demand with no time pressure is definitely taken for granted) unless you build a tiny restroom
  2) the food costs can extremely balloon unless you build a tiny kitchen (or plan your groceries out to avoid refrigeration or much prepping)
  3) maybe tricky to find a spot to do any self maintenance on the van

I've been at it in the bay area for about 6 months. It's been so easy that I have extremely procrastinated in building the van out, actually.

[Generation-X]

I guess it would depend on being able to find what's available in your area, but how about crashing at an office space you rent?

This will be my second year in doing so, at $350 per month which includes all utilities except it doesn't come with a shower - I believe some office spaces DO come with shower facility.

Average rent around my area has risen dramatically in the last year or so, to around $700 - $800 per month, excluding utility.

Maybe worth a try.