Is there anyone doing ERE with traditional housing? (Renting a nicer apartment/typical 3 bedroom house.)
I think the RV idea is brilliant along with a sailboat. (Nice way to game around paying much property tax.) I know someone that is working up to ER that does stealth camping, and has been doing so for years.
But is there anyone doing ERE with mainstream housing? I love to camp, but also love the comforts of home/extended family/big dog/two sofas. Definitely not looking for the nomadic life.
Currently have a paid for 1950's ranch, bought it cheap, renovated it myself. The only major expense is property tax. Just curious if anyone is going a similar route and doing ERE.
ERE with Traditional Housing?
At this point, it seems like the most reasonable ERE solution for me is to buy a small house (2 bedroom or something, like a large cottage). I can also see the appeal of an RV/sailboat lifestyle but I'd rather settle down a little and have a little bit of land.
However, all this is several years in the future for me, at the very least.
However, all this is several years in the future for me, at the very least.
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dot_com_vet
- Posts: 603
- Joined: Mon Jan 31, 2011 2:07 am
I've been renting dive apartments, renting rooms, and keeping roommates. I lived in a tent for a while and have been voluntarily homeless for short stints (less than a month). All this so that I can boost my savings rate. Given that lifestyle, I'm just about FI right now at 27.
But I won't stop accumulating savings until I can afford a more typical house, a small cabin on a modest bit of acreage in a rural area.
So my road to FIRE has been with unconventional housing. But the road after FIRE ought to be more conventional.
But I won't stop accumulating savings until I can afford a more typical house, a small cabin on a modest bit of acreage in a rural area.
So my road to FIRE has been with unconventional housing. But the road after FIRE ought to be more conventional.
A paid for house in a walkable area with transit available is probably the best living situation you can have. It allows you to get to know the area to find the best deals on whatever you buy. Your taxes and expenses are predictable. You can mod the house to reduce energy and utility costs. You can find places to grow fresh food. In walkable areas you can often walk or bike to socialize or find free entertainment. You can even take in a roommate or rent part of it out.
I own an 840 sqft 3 bedroom house (houses are smaller in the UK). I'm not ERE though: 34 years old and I reckon at least another 6 years of work before I can cover my 1/2 of the expenses.
RV living is pretty much unheard of here. Caravans are for cheap 2nd homes for weekend getaways. I did have friends who lived in a lovely mobile home for a while, but the park closes for 3 months over the winter months and they had to rent an apartment for those months anyway, so it's not a whole-year solution. I have heard of people living in boats in very expensive cities like London, and at the height of the property boom there were even some people living in converted shipping containers.
But in the frozen north, house prices are lower and we also still have some 'social housing' with subsidized rents (and long waiting lists), so there isn't the same demand here for low cost housing alternatives.
RV living is pretty much unheard of here. Caravans are for cheap 2nd homes for weekend getaways. I did have friends who lived in a lovely mobile home for a while, but the park closes for 3 months over the winter months and they had to rent an apartment for those months anyway, so it's not a whole-year solution. I have heard of people living in boats in very expensive cities like London, and at the height of the property boom there were even some people living in converted shipping containers.
But in the frozen north, house prices are lower and we also still have some 'social housing' with subsidized rents (and long waiting lists), so there isn't the same demand here for low cost housing alternatives.
I didn't even know about ERE until a few years after we bought our house(2 bd/2 bth ranch). I'm taking steps now to reduce expenses and pay off the house within the next two years. After that, capital restoration and investment. But right now, we're throwing everything at the house. It helps that we bought less than we could afford, even thought we bought at the height of the housing bubble. Looking forward to one less monthly debt.
If you can get a house for the right price, it shouldn't keep you from an ERE future (or at the very least an early retirement). Of course the trick is getting the "right" price. In my case I got my house as a fixer-upper cheap a little over a decade ago and if not for an extended bout of unemployment it would have been paid off a few years already. Bringing in borders can quickly get you a paid off house. I had a border for 18 months that paid almost half of my mortgage payments. In my case, without the unemployment I could have been ERE ready after 10 years with a paid off house (Instead it'll be paid off by the end of this year). Like you, I prefer living in a house with amenities.
I thought I would fix up my place just like I wanted it before I retired. I did, over and over again until I got it "retirement ready". In fact, for 8 years while I was doing the apartments and living at home only occasionally, we put a bunch of bucks into new heat/air, kitchen, roof, appliances, etc. Finally in January of 2010, we retired and moved back to the house.
Speeeew Speeeew it needed a new water line ($1750.00)
Drip, drip, it needed a bathroom tub/shower faucet and lines ($450.00)
Hurmpf Hurmpf, I "decided" the garage appeared shabby, so I got a company to do new Roof and Siding and Windows ($8,500.00)
(I could go on, but the point is, when you live here you "see" things. I am always fixing something, it seems. Yes, I could not have done these things, or done them before I fully retired.
There is something about living here every day and your "to do" list grows and grows.
However, I think a modest single family home is the best bet.
Just have a fund to "do" things, because you won't be happy if you can't do them. Also an emergency fund for the "Speew Speew" you hear when everything is quiet in the house!!!!
Speeeew Speeeew it needed a new water line ($1750.00)
Drip, drip, it needed a bathroom tub/shower faucet and lines ($450.00)
Hurmpf Hurmpf, I "decided" the garage appeared shabby, so I got a company to do new Roof and Siding and Windows ($8,500.00)
(I could go on, but the point is, when you live here you "see" things. I am always fixing something, it seems. Yes, I could not have done these things, or done them before I fully retired.
There is something about living here every day and your "to do" list grows and grows.
However, I think a modest single family home is the best bet.
Just have a fund to "do" things, because you won't be happy if you can't do them. Also an emergency fund for the "Speew Speew" you hear when everything is quiet in the house!!!!
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DividendGuy
- Posts: 441
- Joined: Sun Dec 05, 2010 9:58 pm
I've gone back on forth on this question myself...almost to the point of analysis paralysis. I weigh the pros/cons of renting rooms or studio type apartments to buying a small condo. Every time I put the numbers into a calculator (NY Times buy vs rent) the numbers always favor renting. I'm basing a $500 rent vs a $50,000 condo. It really all depends on your lifestyle. If you have children and/or a wife then there will have to be some compromises somewhere.
You mentioned not wanting to live like a nomad. I feel the same way. However, I also can't see myself living in one place the rest of my life. One of the benefits to ERE is to be able to live anywhere..since you're not tied down geographically to a job. In this case, if you are renting...then you could theoretically rent in different places all the time. I love the idea of possibly renting rooms in different places every couple of years. Maybe stay in Chicago a couple years, stay in San Fran a couple years etc. That would be getting the benefits of traveling and seeing different places, but not having to confine yourself to an RV or something very small. I've seen rooms for rent and other small spaces in cities all over. Obviously if you settle down into purchasing traditional housing, this wouldn't work.
You mentioned not wanting to live like a nomad. I feel the same way. However, I also can't see myself living in one place the rest of my life. One of the benefits to ERE is to be able to live anywhere..since you're not tied down geographically to a job. In this case, if you are renting...then you could theoretically rent in different places all the time. I love the idea of possibly renting rooms in different places every couple of years. Maybe stay in Chicago a couple years, stay in San Fran a couple years etc. That would be getting the benefits of traveling and seeing different places, but not having to confine yourself to an RV or something very small. I've seen rooms for rent and other small spaces in cities all over. Obviously if you settle down into purchasing traditional housing, this wouldn't work.
@dot_com_vet, the responses to your question were very enlightening to me.
Until very recently, I was on track for ERE at around age 40, in a 3/2 condo, not quite 1700sf. It's an exceedingly efficient unit, in a very low property tax area, with good access by foot/bike/bus to almost anything one could reasonably want.
My plans have been thrown into disarray however, as I'm switching jobs and moving at the end of the month. I don't yet fully know the impact this will have.
Having spent a lot of time looking at housing in my new location, it seems that as your housing becomes more desirable (desirable in a traditional sense that is-- aka pretty, new, lower crime, etc...), the parasitic fees generally become more burdensome: taxes, insurances, association fees, etc... Finding exactly the right balance is quite challenging, and may not be possible without living in the area first.
Until very recently, I was on track for ERE at around age 40, in a 3/2 condo, not quite 1700sf. It's an exceedingly efficient unit, in a very low property tax area, with good access by foot/bike/bus to almost anything one could reasonably want.
My plans have been thrown into disarray however, as I'm switching jobs and moving at the end of the month. I don't yet fully know the impact this will have.
Having spent a lot of time looking at housing in my new location, it seems that as your housing becomes more desirable (desirable in a traditional sense that is-- aka pretty, new, lower crime, etc...), the parasitic fees generally become more burdensome: taxes, insurances, association fees, etc... Finding exactly the right balance is quite challenging, and may not be possible without living in the area first.
When I started aggressively pursuing ERE a year ago, I started living with roommates to save money. This went rather badly for me, repeatedly, resulting in me moving five times in the past year.
At this point I've resigned myself to a more traditional solution: a 1BR in a desirable location. The bad living situations ended up having lots of hidden expenses: increased food costs (not cooking much), money spent on moving, money spent to meet friends at coffee shops and other public places because I couldn't invite them over, money spent traveling, etc.
After struggling with this for a while, I decided the path of least resistance was to save up enough assets to cover a higher housing expense. My 1BR isn't that nice, but after the past year, it certainly seems that way.
At this point I've resigned myself to a more traditional solution: a 1BR in a desirable location. The bad living situations ended up having lots of hidden expenses: increased food costs (not cooking much), money spent on moving, money spent to meet friends at coffee shops and other public places because I couldn't invite them over, money spent traveling, etc.
After struggling with this for a while, I decided the path of least resistance was to save up enough assets to cover a higher housing expense. My 1BR isn't that nice, but after the past year, it certainly seems that way.
We bought a 3 bdrm house with a granny suite addition. The advantages to efficiency/ERE are:
Granny suite rental pays rent.
House has yard which we mostly maximize for food production.
Yard also has room to hang laundry in summer.
House has room for 2 deep freezes (maximizes our food storage capacity from garden).
No landlord.
Equity (house values always go up, right?).
Granny suite rental pays rent.
House has yard which we mostly maximize for food production.
Yard also has room to hang laundry in summer.
House has room for 2 deep freezes (maximizes our food storage capacity from garden).
No landlord.
Equity (house values always go up, right?).
It's true that traditional and more desirable housing costs more, but you do get something for that extra expenditure. akratic listed some good concrete examples. If you are comfortable hosting guests then you don't need to meet somewhere that costs money. If you are located near work, groceries, and attractions then you don't need to spend as much on transportation. If you are in a low-crime area you don't lose money to prevention, theft, or vandalism.
Sometimes the all-in costs of modest traditional housing will be less than the costs of super-cheap housing plus the countermeasures needed to make it livable. Since a renaissance person is more resourceful and less demanding than average, the untraditional approach will be the absolute cheapest more often. But not always.
In my case, housing is one area where I've made a deliberate decision to be frugal but not "extreme."
Sometimes the all-in costs of modest traditional housing will be less than the costs of super-cheap housing plus the countermeasures needed to make it livable. Since a renaissance person is more resourceful and less demanding than average, the untraditional approach will be the absolute cheapest more often. But not always.
In my case, housing is one area where I've made a deliberate decision to be frugal but not "extreme."