Reducing Your Costs/Budget in the Pursuit of FI/RE w/ 'Unconventional' (Perhaps Extreme) Housing Tactics?

[ScrewTheAverage]

Like many on the ERE forums we're always on the lookout to optimize our money (savings/investments/expenses/etc.) but eventually hit a 'wall' with reducing housing costs, arguably one's largest recurring monthly expense. We managed to get our housing costs down to $450 a month for a one bedroom apartment, but couldn't really get much lower without drastically impacting quality of life.

On top of that, one of our goals for life post FI/RE is travel, especially since we're both fortunate to be able to work remotely (one of us is an IT consultant, the other is a project manager consultant (PMP) and corporate trainer.

So, we started to look for creative and unconventional ways on how we could further cut our housing costs, travel, and have a similar quality of life. As the old saying goes... eating our cake while retaining it too!

From house sitting and RV'ing, to work exchanges, volunteering, and travel hacking and co-housing, nothing was off the table.

In 2016, after careful consideration we eventually settled on house sitting as the best 'fit' for us. In our first year of pursuing FI/RE and concurrent long-term travel, we completed 18 house sits and found that we very much enjoyed it. It allows us to travel, explore new places, live like a local, make life long friends (in some cases), and take care of pets with varying personalities that we get to play with, pet, and love.

Fast forward to the present and we’ve been on the road for three and a half years (four continents, 26 countries, and ~80 cities) all while having the pleasure of doing over 60 house sits.

The costs savings when house sitting, as we suspected, can be phenomenal (and spill over to more than just housing/lodging). For perspective our total 2019 housing/lodging costs were $293.38 and our yearly budget (all-in) was $7,000 ($3,500 each), and that includes 'living' in places like Alexandria, Philadelphia, Chicago, Atlanta, and a few months in New York City.

With that being said, it's not all rainbows and butterflies! House sitting can come with its fair share of challenges and work. Although, some will have you believe it's free lodging OMG! it’s way more involved than simply ‘a free place to sleep while traveling’ (it’s not a hotel or Airbnb after all), you need to weigh the pros, cons, amenities, etc. of every house sit and choose wisely.

We don't plan on doing this for the rest of our lives but we're curious, are others that are mindful of their fiances and pursuing FI/RE (especially the ERE flavor) applying 'extreme/unconventional' housing tactics to keep their budgets low? Any lessons learned, mistakes to avoid, or tips for your specific approach?

[Stahlmann]

lentil baby
marrying up

[classical_Liberal]

Good thread. Lately I've been going through lifestyle options I have at the 2JAFI or less price point. Trying to work out how I could do various things to make it work.

Personally, I've managed to get my housing costs down to about 250/mo through standard means. These means living with my GF and splitting costs, but could be done just as easily with a roommate. This is about the best I can do in finding an acceptable "homebase" location for a few years, while still being able to leave and travel, or move locations easily, and without significant "sweat cost reduction". Sounds like OP had similar results back when living this way.

The key to this is to strategically choose housing options based on your lifestyle preference. This means you have to choose the lifestyle you want to lead first, then housing solution follows. Also decide whether or not the "sweat cost reduction" is worth it to you.

What OP has done with perma-travel lifestyle is AMAZING. Obviously a traditional airbnb route in some of those areas for temp housing would have run orders of magnitude more. I'd guess maybe 50-100X. Obviously you can't do much better than this if someone wants to be a FT traveler and is willing to put in the sweat cost reduction of house sitting. The next best thing here is learning to get local deals in international travel. That is probably a combination of a learned skill and time commitment of sweat housing cost reduction. Once you learn to do it somewhere, you can probably do it most places. One could also learn an in demand skill (like medical) and volunteer that skill in needed areas for free housing and travel.

I think if someone tends to be of the mind to stay put in their lifestyle. Purchasing a multi unit, or larger than needed SF unit with rooms to rent can provide similar results in that situation. Again "sweat cost reduction" is needed in the form of managing renters. Also at least some upfront financial capital. However, it would allow someone to live in more urban environments for low or no cost in cashflow. Also there's the idea of an intentional community, usually with quite a bit of work associated with building the community. Without the sweat cost reduction work, the next best thing is outright ownership of a very small house in a rural area. I've seen turn key properties for 25-30K in more rural USA.

Of course the whole vehicle living is also a good option if one wants to live in more wilderness locations and limit travel to a certain geographic area. See C40, or a ton of other examples on the interweb for how people have done this for years with very low housing costs. Edit: ohh, or sailing as well in this category.

What other lifestyles am I missing?

[WingsOnFire]

I could see myself living in a truly tiny house or a yurt, if I were alone. Alas, I have a daughter living with me (and perhaps my husband again at some point?) so I made the decision to buy a little old house of 678 sqft and large garden (lost of building permission left). I'm paying cash for it and the living costs will be under 200 e /month, including RE tax which is not too bad around here (unlike income tax..).

The house is about half of my NW at the moment, but on the cheap side for the location. Because it's so small. And old. But they don't even make houses that small these days. A "normal size" house with that huge garden and nice location would cost so much more. I estimate that about half (or a little more even) of the price is for the lot and half, or a little less, is for the house.
And if I stayed here where I now live, I could not even get the tiniest under 200 sqft apartment with the same amount (165K). In fact, I owned one such tiny apartment and recently sold it for 175K.
If I calculate by the whole family's NW the house price is only 25% and my husband has a well paying job that he enjoys so if he wants to move to the little house at some point (and I'll let him) we'll save around 3000 e per month in rent (living in separate apartments now).
He can work from home so there is no reason why he wouldn't move as well to be at least closer to us, if not in the same house.. He could rent a nice place for 800-1000 e /month there so it'd still save us 2000 e every month.

For DD and me the little house is just the perfect size. Our current apartment is slightly smaller and we feel like this is more than enough space for us.
If my husband would move with us at some point, I think he should have his own study either in the garden or rented from downtown. So that we would both have some breathing room.

But hey, if I were ever in a real pinch financially, I could just rent out the little house and live in tent or some such set up in the garden myself

[ScrewTheAverage]

@classical_Liberal

Great thoughts and examples, and we completely agree with being intentional about your lifestyle and building your life around those choices! Unfortunately, there are so many people who think in weeks and months instead of years and decades and don't realize the power of intentional living... especially when the outcome of those choices compound over the years (just like money).

In our case, the $450 a month apartment in downtown meant that any possible job offers would be weighted higher (all things considered) if we could walk to them from our apartment. It also meant that driving was kept at a minimal (about 5K miles a year), which in turn meant more physical activity, reduced fuel/maintenance/insurance/etc., and foregoing being stuck in traffic.

You're also right that ultimately really creative strategies to reduce house/lodging costs will come down to trade offs (as most things). How much 'pain' and/or inconvenience are you willing to endure to keep costs low? Are you willing to have roommates? How about renters? How about driving 30+ minutes to get to a large grocery store? Would you be up to rent a room instead of an apartment? Is sleeping in a shared space a deal breaker? Would you be willing to relocate every few weeks or months once your current house sit came to an end (like us)? Are you willing to endure 'bad' weather?

It's funny, we were just talking with our friend last weekend about intentional communities. They sound like a good mix of things but our fear is that someone won't pull their weight, someone will get power hungry, or the 'Ds' (Divorce, Drugs, Death, etc.) will happen and cause things to go south.

We have a friend who just FIRE'd at 41 and he kitted out a RAV 4 to be able to stealth camp around the country, great way to reduce housing costs indeed!

[classical_Liberal]

@ScrewTheAverage
Very good point about the compounding effects of intentional living. It's a skill one gets used to using that provides tons of nonfinanical capital.

Your previous apartment situation is exactly the situation we are in. One of the great things about this is the optionality it provides us in playing with/trying out other lifestyles that may be of interest. We can go on month(s) long road trips or international travel trips and test the waters without breaking the bank. It's also great for people trying to accumulated in their finances. We live downtown in a small college city with a great economy(at will jobs of various calibers/pay), and many very good local entertainment-type options. This city and the specific apartment unit were absolutely intentionally chosen after much research. There's a period of at least 9 months in my journal where I continuously lament about various options for a "home base" before we pulled the trigger.

You're also right that ultimately really creative strategies to reduce house/lodging costs will come down to trade offs (as most things). How much 'pain' and/or inconvenience are you willing to endure to keep costs low?

Right, and this is where you lose a lot of people. They tend to think very middle class salaryman. Like,"I make $30/hr, why not just work for longer and save extra money so I don't have to house sit when I travel." Ok, that's a fine, but less robust, solution if you like your life now. But, if you like it so much, why are you trying to RE to travel?

The reality is that many of the things you mention may actually be super enjoyable for people. For example, if you like pets and international travel, but pets are almost impossible to international travel with, why wouldn't you pet sit? It seems like the best of both worlds, you get to play with animals and travel for pennies on the dollar! It's more robust than just another 100K invested because that network of pet sitting you develop will not evaporate in the next market crash or recession, and will not inflate away with currency devaluation. Your bets are hedged.

Anyway, just my thoughts. I wish there were more examples of folks like you to help people like me think more in terms of systems/intentionality. It's hard to do when it's so outside the scope of day-to-day life for most salaried middle class thinkers.

[mooretrees]

We're hoping that moving into a converted school bus next year will dramatically reduce our total living expenses. We're (really DH) building it now and I hope to shed about $1000/month in utilities and mortgage. I've waffled about selling our house or trying to rent it, and decided to try renting it. We've thought about tiny house living for years and starting to focus on retiring early (nothing extreme for us as we're solidly in our 40's) pushed us to reconsider tiny living. I'm in it for more than the money, though. I'm really excited to pare down our possessions and clean up a 200 sqft home. Also, it will be beautiful and totally crafted to fit us, something I've never experienced. We'll be in it next year, hopefully early in the year. With the reduction in expenses a lot of options open up to us. I don't know if we'll travel with it initially, but definitely at some point.

@screwtheaverage do you see yourselves doing this house sitting long term? It does sound interesting but do you ever long for a home of your own? I don't seem to have the international travel bug anymore and home is meaning more and more to me. But home is a flexible term and I'm not in love with our current home.

[fiby41]

1 Living with parents
2 Living in organisations viewtopic.php?t=11498
3 Living in pods, hostels, boarding schools viewtopic.php?f=14&t=10741
4 Living with in-laws
5 Living in vehicles: RV a la jacob, van like C40, car
6 Squatting on free land
7 Living under a bridge viewtopic.php?t=6833

[ScrewTheAverage]

@Classical_Liberal

There's little doubt that your choices now will pay off exponentially in the future! Our past situation very much sounds like a mirror image of your current, as we too lived in a small to medium college town that was booming.

It's more robust than just another 100K invested because that network of pet sitting you develop will not evaporate in the next market crash or recession, and will not inflate away with currency devaluation. Your bets are hedged.

This is a really fascinating way of looking at things that we hadn't considered but definitely ring's true. Case in point. Like nearly everything, house sitting has been severely impacted by COVID-19 (i.e. the number available sits) since people are by and large not travelling. Thankfully, we've been able to continue to secure house sits and while we've of course been impacted, the impact has been overall minimal.

It sounds like you're in a great place indeed, good on you both for having the foresight. We both seem to be very fortunate as we have partners that are pulling with us instead of away from us!

[ScrewTheAverage]

@screwtheaverage do you see yourselves doing this house sitting long term? It does sound interesting but do you ever long for a home of your own? I don't seem to have the international travel bug anymore and home is meaning more and more to me. But home is a flexible term and I'm not in love with our current home.

@mooretrees

We've been doing it for four years and still enjoying it, so it looks like we're in it for the long run. We've had conversations about life post FI/RE, and at this point we're both thinking that, we'll probably still house sit in some capacity or another. Maybe not as much as we do now (i.e. more AIrbnbs/Hotels/etc.) but we really enjoy being able to live like locals, making friends around the world, and have a pet (even if temporary).

As for a 'home' of our own we part jokingly say that home is where the other is. It must be a byproduct of only carrying 36L backpacks and discovering that what we thought we needed and was important, for the most part, actually isn't.

[AxelHeyst]

@StA ha my partner and I say the same thing: home is whatever space both of us happen to be concurrently occupying.

In mid-2018 I finished converting a cargo trailer, and have been off-and-on living in it since. The Plan was to travel the US slowly, boondock on BLM/NF land, prioritizing proximity to climbing and mountain biking. According to The Plan, my CoL would be quite low.

My Plan lasted less than a year, because two weeks in I met my gf. I still lived off and on in my rig until about a week ago, but my rig wasn't designed to fit two people's lives, and so my CoL has been higher than I thought it would due to spending money on "fixing" the problems that arise trying to stuff two people's lives in one 68sf space. Jacob said recently (or was it in the book?) "Spending is a sign of friction resulting from bad design."

I basically designed my rig for a life I didn't wind up living, so the design was "bad" from that perspective. If I were single still, I think it'd be working great. So I suppose I'm just posting this comment as a cautionary tale - my design was for a somewhat narrow scenario. I failed to design for "what if I decide I want a serious gf again? How well will this work?" I was so sure that I wanted to be single for, like, ever, that I didn't even consider it.

[ScrewTheAverage]

@AxelHeyst Awesome insight and wisdom Axel! Hopefully the 'mistake' hasn't been too costly and totally worth it! We have a friend who recently FI/REd and his plan is to travel throughout the country in his converted RAV4, so far it's working out pretty well!.

Are you and your girlfriend continuing to travel in the same cargo trailer, did you go larger, or are you laying low because of COVID-19?