According to the Business Insider, Americans spend 37% of their post-tax income on housing. This is more than the <30% recommended. There are many common methods to obtain a home for less including settling for small apartments, getting roommates, and checking the less mainstream apartment listing sites like craigslist. Even today, that is not enough. Some people claim they cannot get to the recommended <30% of their income on housing in places like Brooklyn even if they rent the smallest place and have at least one roommate. It is not enough just to make sacrifices in many situations, if you want a home for cheap in many places, you must get creative.
Work For You Landlord
When I went to college at UPJ about 6 years ago, I knew someone who lived off campus in an apartment complex. He told me he never paid rent. He instead worked in pest control for the landlord of the apartment complex. Instead of money, his rent was paid by time and effort establishing pest control methods, setting traps and baits, and even taking care of mice and squirrels killed by these pest control methods. As far as I know, he never had any issues with time nor his landlord. He found a great way to get a home cheap.
I have heard of other stories like his. Some people cleaned/repaired apartments instead of paying rent. Sometimes it would be good just to ask you landlord if they need any help with anything. But note, many of these jobs are likely to be “dirty jobs,” some work that for one reason or another is not very desirable for people. You might want to be sure that your health insurance will cover for any potential injuries on these jobs.
Unfortunately, my colleague at UPJ is one of the lucky ones when it came to this rental agreement. His landlord never gave him any reason to find a lawyer. There are many cases where people “work for rent” but the landlord claims they never paid for rent. This may sound like backstabbing, but my colleague tried to fulfill his agreement as much as possible, I can see situations where there are disagreements with an informal agreement because the tenant has not held up the end of their bargain.
If you want to “work for rent” with your landlord, I highly recommend signing a contract agreeing upon the cost of your labor and how many hours you will have to work. You may find that you have to work undesirable hours or even agree to a discounted rent instead of free rent, but nothing comes for free.
Flip A House
I have lived in Philadelphia for over 4 years. Sometimes it is easy for me to forget that paying $700/month for a one bedroom apartment is very below average in Philadelphia with an average rent of $1,549/month. Philadelphia may not be as expensive as New York City, but it is about half of the way there at $4,141/month on average. Many of my colleagues were forced to move due to rent increases, I am among the only person in my school who did not have to move recently due to rent increases.
One of my colleagues found a good way to get a home for cheap. He bought a house to flip. In addition to his PhD, he is taking some real estate repairs and sales courses at a community college. Suffice it to say, he is a very busy person. By purchasing the house for cheap and fixing the place up, he is currently living in the house as he flips it. This is actually not an uncommon practice and has many benefits including tax benefits. Furthermore, he has purchased real estate, a very solid investment.
There are some drawbacks to living in a house as you flip it. For one, it requires much time and effort. And imagine if you are trying to do a job on top of that (or a PhD). Your schedule will be full if not even overfilled.
In addition to the work, you will have to be willing to live in the house for at least 2 years to receive tax benefits. In those 2 or more years you will have to live in a construction area. This itself can be stressful and possibly dangerous . The stressful issues can be anything from needing a fresh coat of paint to toilets that do not work/no toilets. The dangerous issues can be anything from having asbestos in the house to the house being a tinder box just ready for a spark.
The point is, buying a house to live in and flip is going to be stressful, and potentially dangerous. It is not for the faint of heart.
These are among the two most creative ways I know that people have lowered their cost of living in a home or even made it their cost free. These methods are creative, but they are not uncommon. While lowering the costs sounds appealing, most people would never attempt any of these methods. They are difficult to pull off properly and sometimes they could be dangerous.
If you know of any other creative methods (aside from roommates, typical landlord negotiating, and living with your parents) to save on housing costs, please leave them in the comments below. These methods can be used to save money that you can use to forge your wealth.