Exactly how cheap can housing be made?

How to avoid signing your life over to a mortgage
User avatar
unemployable
Posts: 552
Joined: Mon Jan 08, 2018 11:36 am
Location: Homeless

Exactly how cheap can housing be made?

Post by unemployable »

What's the cheapest, for a given country, it is possible to get one's housing nut down to? Parameters are:
  • Living by yourself in a separate fixed dwelling fully protected from the elements. A mobile home on a lot is fine; for this discussion, an RV/van/tent is not. Something like a granny flat or apartment above a garage is fine as long as it's all yours.
  • Must not be subsidized or shared in any way. No living with parents, no government assistance, no roommates chipping in on rent, no housesitting/housework in exchange for reduced rent. All costs of occupying the dwelling must be covered by the tenant.
  • Dwelling must have an area to cook and prepare food; a refrigerator; and at least one sink, toilet and bathing area, as a typical apartment in a developed country would.
  • Must be a long-term lease or ownership; no discounts due to seasonality, property about to be torn down or seized, etc
  • Include rent, water, sewer, trash, HOA fees, property taxes and other similar recurring costs necessary to live there. (Usually at least some of these expenses are bundled one way or 'tother.) Do NOT include variable costs that are possible to at least partly opt out of and maintain a "Western" standard of living. This would include electricity, TV, internet and parking. Also do NOT include routine maintenance costs that an able-bodied person can perform oneself such as lawn mowing and housekeeping.
  • If it is a purchased/owned house, include either the mortgage payment OR, the monthly opportunity cost of the price of the house at 4%*. For example, for a house that costs $120k, this would be $120000 * .04 / 12 = $400. Easy way to do this is to just divide by 300. Assume no immediate maintenance is required, or bundle such cost into the cost of the house.
I'm trying to standardize here, not come off as picky. I think y'all get the idea.

In the US the cheapest I can get this down to is the low to mid $300s, with electricity/heat another $40 or so on average. This is generally as cheap as it gets for 1br apartments in places with declining populations and aging housing stock. It is also around the imputed cost of smaller houses (~$50k purchase price) in the rural Midwest and Appalachians. Naturally such housing may come with other costs such as greater distance to groceries and the like, but I'd like to focus on just housing here. If you're willing to go into the $400s many more options open up in non-depressing parts of the country. I'd be curious to know the cost in other countries.

*This number was chosen because it approximates mortgage rates in many countries and as a side benefit is congruent with living off a 4% withdrawal rate. You are free to choose a different rate, including 0%, but I'd like have 4% as a baseline.

2Birds1Stone
Posts: 1170
Joined: Thu Nov 19, 2015 11:20 am
Location: Earth

Re: Exactly how cheap can housing be made?

Post by 2Birds1Stone »

In Poland you can find a flat outside of the city for ~$250/month easily, this would include waste/water/electric if you are conservative.

In rural parts of Thailand, Vietnam, etc this can be done for $100-150 a month. @slowtraveler @physdude and a few others can verify that.

RE: fridge/cooking requirements, you can put a small dorm style fridge and convection cooktop in almost any apartment you find.

User avatar
Bankai
Posts: 816
Joined: Fri Jul 25, 2014 5:28 am

Re: Exactly how cheap can housing be made?

Post by Bankai »

City where I live in the UK:

- 1bed in the worst neighbourhood £30,000 (£100 per month)
- local tax £1,180 / 12 x 0.75 for single person occupancy =£74 per month (this includes water, sewage and trash collection)

That's £175 per month total ($217).

Wants would be:

- electricity: we pay £45 per month for 100% renewable for 60sqm apartment, I assume 1bed half the size would be £25
- fibre broadband £21 per month
- cheapest mobile plan £5 per month

So £225 for full package ($280).

Seppia
Posts: 1484
Joined: Tue Aug 30, 2016 9:34 am
Location: Italy

Re: Exactly how cheap can housing be made?

Post by Seppia »

In safe areas of northern Italy, if you’re willing to live in slowly depopulating towns, you can find decent stuff for as low as 25-30000€.
You’d need to add around 50€/ month for all taxes.
Electricity would be (depending on your consumption but assuming a fairly frugal lifestyle) somewhere between 15 and 30 euros / month (we spend 22€)
Unlimited plan with a owned cell phone is 9€/month in Italy.

Examples
https://www.immobiliare.it/ricerca.php? ... %2C9.09462

These are in a nice part of Italy, with lots of nature and close to lake como.

You can find even cheaper in the south, but wouldn’t be much cheaper and would come with big drawbacks (second world style healthcare, shit infrastructure, mafia, etc).
If you don’t mind the above drawbacks, look for small towns in the Calabria region.

7Wannabe5
Posts: 6647
Joined: Fri Oct 18, 2013 9:03 am

Re: Exactly how cheap can housing be made?

Post by 7Wannabe5 »

I agree that is the minimum, but believe that at lowest end in the U.S. you will either be choosing to deal with relatively high level of crime and associated troubles and/or work/grocery store commute of distance beyond reasonable hike/bike.

I do and recheck this calculation all the time, but always get bogged down or tangled up in question of whether or not I want a bed mate, which renders this calculation moot as long as my answer is "Yes."

sky
Posts: 1145
Joined: Tue Jan 04, 2011 2:20 am
Contact:

Re: Exactly how cheap can housing be made?

Post by sky »

The expensive part about cheap houses is maintenance. A new roof can cost US $15,000.


https://www.zillow.com/homes/dowagiac,-MI_rb/

User avatar
Ego
Posts: 4918
Joined: Wed Nov 23, 2011 12:42 am

Re: Exactly how cheap can housing be made?

Post by Ego »

The question gets really interesting when you tweak it a bit.

How could you finagle the cheapest lifestyle in the place where you would live if you had unlimited money?

Cheap places are cheap for a reason.

tonyedgecombe
Posts: 438
Joined: Thu Aug 30, 2012 2:11 pm
Location: Oxford, UK Walkscore: 3

Re: Exactly how cheap can housing be made?

Post by tonyedgecombe »

Ego wrote:
Tue Sep 17, 2019 8:44 am
Cheap places are cheap for a reason.
I think it would be quite hard to fit in in these places if you have middle class sensibilities, as Scott found in that other thread.

User avatar
Jean
Posts: 1319
Joined: Fri Dec 13, 2013 8:49 am
Location: Switzterland

Re: Exactly how cheap can housing be made?

Post by Jean »

In le Locle switzerland, 400.- is possible all inclused, Sometimes even less. But i follow all tout rules, and my housing costs me 100.- but it's hard to reproduce.

User avatar
unemployable
Posts: 552
Joined: Mon Jan 08, 2018 11:36 am
Location: Homeless

Re: Exactly how cheap can housing be made?

Post by unemployable »

Interesting responses so far.

I unbundled electricity/internet because in the US they're usually paid for separately, although for some kinds of dwellings (condos, granny flats) these are bundled in the rent. Of course "everybody" uses them and has to pay them, so they should be accounted for. This is less necessary nowadays for TV, with more cordcutting and use of alternative services.

@Bankai: Is that tax amount the council tax? I've long wondered how that works in the UK. Am I correct in saying council tax is levied on the occupant (so that everyone living there pays it directly) rather than on the property owner (so that a renter doesn't pay it directly, but a landlord must recoup it in the rent he charges)? And that it covers several publicly provided utilities such as W/S/T?

@Seppia: I'd definitely choose northern Italy as it's closer to the Alps and probably makes travel to the rest of Europe easier, and I don't mind colder winters. I looks like you stop scraping the bottom of the barrel around EUR 30k.

@7wb5: I think my personal real minimum is around $400, with maybe another $40 or electric and $40-50 for internet, so around $500 all in. That's possible in parts of the Appalachians I wouldn't mind living in. I see the occasional studio or 1br for $275-300 in rural areas far from everything (need a car), but probably OK with crime. Most importantly you want to be a few minutes' drive from a chain grocery store or Walmart. You can go cheaper with roommates though. In the cheaper parts of the US around $600 for a 3br (so 200/person, maybe another 50 for utilities) is not unusual.

Two things are funny with $400-500/month. First, on a personal level it would be close to what my monthly nut would be if I bought a place, not counting the opportunity cost of the house price. So counting HOA, base utilities, taxes and maintenance. Second, at that level it doesn't become much cheaper to leave the US anymore, especially when other costs such as travel are considered. There's a lot of discussion about moving to Thailand or Ecuador or wherever in FIREland, but really cost alone is mostly a wash compared to being cheap in the US.

@sky: True but a shingle roof should last 20+ years. My mom replaced her roof this year after exactly 20 years and could have gone a few years longer. (She chose to do it now because a weather event occurred in the area which allowed her to make an insurance claim of it.) It was around $10k for a ~2000ft² house.

@Ego: If I had unlimited money I wouldn't live in one place at all. But for now I do live in Colorado ski country, which does not have a reputation for being cheap. The deal I have is well under market by now; I moved here when rental properties were going begging. My place is "cheap" mostly because it's pretty small. That said, there are resorty areas in the eastern US where one can buy a ~1000 ft² condo for $60-90k (furnished, decently appointed and maintained), have carrying costs of $400-500/month and rent it out in high season for well over $1000/month net. I'd do that while traveling elsewhere and live in it during shoulder and low season, which is still not too bad weather-wise.

User avatar
Bankai
Posts: 816
Joined: Fri Jul 25, 2014 5:28 am

Re: Exactly how cheap can housing be made?

Post by Bankai »

@unemployable: yes, council tax. Yes it's the occupant who's responsible for it whether owner or tennant, however it doesn't scale with the number of occupants (exception being 25% discount for single person). Re what's included, it depends on individual councils, ie in England water is usually not included while in Scotland water & waste both are. Another thing is that the bands were established decases ago and don't get updated and as a result some £1m+ houses in London or South-East are subject to lower council tax than 20x cheaper properties elsewhere.

Seppia
Posts: 1484
Joined: Tue Aug 30, 2016 9:34 am
Location: Italy

Re: Exactly how cheap can housing be made?

Post by Seppia »

unemployable wrote:
Tue Sep 17, 2019 11:34 am
at that level it doesn't become much cheaper to leave the US anymore, especially when other costs such as travel are considered.
Are you considering healthcare in the equation?
The real reason I suggest northern Italy is that healthcare is free and overall excellent quality (probably better than in the USA*)
In the south it's also free but hit and miss and mostly shit in small towns.

Other options closer to Como
https://www.immobiliare.it/ricerca.php? ... 2C9.194527

*The top 1% of hospitals in the USA are probably better than the top 1% hospitals in Italy, but the average is much better here than in the USA. Mostly because doctors do not have "profit" into their decision making process. They'll do surgery if needed and not do it if not.
I have a number of first hand examples where in NYC they would tell me "do this, do that" then go back to Italy and hear "this is completely unnecessary"

User avatar
unemployable
Posts: 552
Joined: Mon Jan 08, 2018 11:36 am
Location: Homeless

Re: Exactly how cheap can housing be made?

Post by unemployable »

Seppia wrote:
Tue Sep 17, 2019 1:04 pm
Are you considering healthcare in the equation?
No, because
  • Healthcare isn't a housing expense
  • In the US one has some choice in how much coverage one wants
  • Lifestyle choices affect one's healthcare costs to a significant degree
  • Subsidies/public insurance may be available, especially to someone at ERE levels of earning and spending
  • Medical tourism is an option, so you just end up in Thailand anyway
But I hope this doesn't turn into a discussion on health care, and I will not argue these points. That can be, and has been, done in other threads. My first bullet point is the most salient.

Seppia
Posts: 1484
Joined: Tue Aug 30, 2016 9:34 am
Location: Italy

Re: Exactly how cheap can housing be made?

Post by Seppia »

You were mentioning "other costs such as travel" (also not a housing expense), that's why I mentioned healthcare (also "other cost").

classical_Liberal
Posts: 2054
Joined: Sun Mar 20, 2016 6:05 am

Re: Exactly how cheap can housing be made?

Post by classical_Liberal »

The problem with looking at housing in isolation is that other costs do matter, particularly when looking at savings of only $100 a month or so.

It is possible to breach the $3-400 a month level with ownership in the rural midwest. About two years ago I looked at a small 1bed/1bath single family home in BFE South Dakota for 22K, it was 100 years old, but in turn-key condition. I estimated ongoing housing costs by using 4% rule on the principle + 2% annual ongoing maintenance + Taxes + HOI + utilities at about $230 mo. Not bad! The problem was it was located inside of a dying small towns city limits. The closest city that had chain grocery stores was about 20 miles away and the closest real city of 200K+ was about an hour away by car. This meant that transportation costs for entertainment or any part time work skyrocketed. Because it was single family, and likely not a high demand rental, I would have had to deal with yard/house maintenance if I left for longer term slow travel. So it depends on the type of life you want to lead.

User avatar
unemployable
Posts: 552
Joined: Mon Jan 08, 2018 11:36 am
Location: Homeless

Re: Exactly how cheap can housing be made?

Post by unemployable »

@Seppia: OK, but if an American moves to a third-world country, he goes onto their healthcare "system" such as it is, which is usually just paying cash. One can stay in America and enjoy that optionality for zero cost, paying it only when necessary.

My greater point, completely separate from healthcare, is that "retiring" to another country has significant other costs both hard and soft. This includes cost of the visa, required investment or deposit of funds that can't be accessed while on the visa, language issues, lack of familiarity with government or legal systems, lack of rights, cost of shipping/storing one's stuff, discrimination as a non-native or minority and so on.

User avatar
unemployable
Posts: 552
Joined: Mon Jan 08, 2018 11:36 am
Location: Homeless

Re: Exactly how cheap can housing be made?

Post by unemployable »

@c_L: If you're saying "what's the cheapest possible" and "what's the cheapest I'm comfortable with" are separate questions with separate sets of assumptions, and at least equally important, I agree, and I've made the distinction a couple times already. But I'm asking to see whether I'm missing anything and to see what differences and issues exist around the US and the world. And in fact I wasn't aware rural SD got that cheap. I sort of figured the baseline was $300s for an apartment and roughly $400 for a standalone house on a lot.

You can buy a $1 house in Detroit, but then you'd need to pay $5k in back taxes and make $15k in improvements if there's no fire damage. But then you couldn't leave the place for more than a few hours without it getting broken into, and when you were inside wouldn't want to leave a car anywhere it could be seen. So I'd pass.

Seppia
Posts: 1484
Joined: Tue Aug 30, 2016 9:34 am
Location: Italy

Re: Exactly how cheap can housing be made?

Post by Seppia »

unemployable wrote:
Tue Sep 17, 2019 2:01 pm
My greater point, completely separate from healthcare, is that "retiring" to another country has significant other costs both hard and soft.
Absolutely.
Having been an emigrant most of my whole life I can confirm 100%.
If I were American/with green card, I would probably ERE somewhere in Utah and call it a day.
Would keep an eye on healthcare as it's the only real wild card in USA spending.

Side note: if you have an American passport, being discriminated in Europe is a non issue. Maybe a liiiittle bit if you're African American. Maybe.

classical_Liberal
Posts: 2054
Joined: Sun Mar 20, 2016 6:05 am

Re: Exactly how cheap can housing be made?

Post by classical_Liberal »

@unemployable
I guess what I mean is the cost of housing is only one part of lifestyle cost. If I were more of a hermit type, who didn’t want to travel much, or work part time in the future, then that SD deal would have been amazing. Particularly if I could have eventually sold and gotten my capital back. But since that’s not my goal lifestyle the extra costs in other realms would have eaten into my savings. Plus I wouldn’t have loved where I live. You basically make the same point wrt cheap foreign living. It isn’t so cheap when all externals and preferences are accounted for. However, if someone preference is to “live large” with daily massages and eating out, then obviously Thailand is better than most of US.

Anyway if the exercise is just housing in isolation of anything else, then my previous comment stands as the cheapest I’ve ever seriously run numbers on. From a practical standpoint I think overall lifestyle needs to be considered first, then cheapest housing solution can flow from that.

User avatar
unemployable
Posts: 552
Joined: Mon Jan 08, 2018 11:36 am
Location: Homeless

Re: Exactly how cheap can housing be made?

Post by unemployable »

The cheapest part of the country I'm familiar with is southern West Virginia. Here is a house offered at $30k that looks to be in good shape and has more room than I'd know what to do with:

https://www.zillow.com/homedetails/99-L ... 0929_zpid/

They'd probably be thrilled if you offered $25k. So an imputed $100/month, tops. And if you buy it that place is yours, you're not selling it unless some sort of demographic shift occurs that causes people to move back there. I can't think of any that could occur within my remaining lifetime.

But my god, is that area depressing. It's in a county whose population has gone from 100k in 1950 to about 18k today. Walmart pulled out a few years back. Any services are a 25 mile drive along a twisty mountain road to Bluefield. Crime isn't too bad I think, certainly not violent crime, but I wouldn't to make myself known as someone with stuff to steal.

It's a fascinating place, for all the wrong reasons.

Post Reply