Saturday, April 16, 2011

Frugal housing 2


Look for a rental in neighborhoods very close to where you work. Sometimes, paying a little extra in rent is more than offset by the savings of a shorter commute. Look for the smallest, least expensive one that's realistic, then SAVE the extra money toward the costs of your next move. Pay attention to maintenance, safety, how the landlord or manager handles repairs, and try to talk to people already renting from them. Find out what percentage of tenants renew their lease after one year, and what percentage has been there more than two years. READ the lease closely and remember, if it isn't in writing (i.e. pets, additional tenants, included utilities, guaranteed parking), then don't be surprised if the landlord doesn't remember agreeing to it. 

Also, singles especially, consider less traditional situations. People sometimes are looking for roommates or to rent out a single room. But get any agreement in writing (or get reliable references for them from someone you KNOW), or you could get badly ripped off. If you look hard, you probably can find a comfortable situation that saves you money that you can then save for that move. Remember, moving costs money, not only the movers or moving van, but also new deposits on the new place and replacing things you can't take with you. Or, if you really want a house, a good down payment and closing costs. 

If you've hit bottom financially, but are now employed again, consider something really non-traditional while you climb out of that hole. An old camper if you have a place you can park it or trade work for a place to sleep, especially if you're known to be honest and reliable. If you live in a mild climate and have a safe place to set it up, a tent and a sleeping bag can let you save up money for a few months for deposits for a rental. I lived in a platform tent while working at a camp for 2 months when I was about 19, and I've been camping more than once when there was a hard freeze. Other than the social stigma or safety, I don't see a valid objection to doing that in a pinch as long as you have some access to sanitation facilities. 

For those who do buy a condo or house, be cautious and conservative. Make sure you know exactly what you're getting in terms of deed restrictions, covenants, owners fees, and loan terms. Buy the smallest place you can reasonably live in while planning for any family additions in the near future (don't buy a one-bedroom condo if you hope to have a couple of kids in the next 3 or 4 years). If you can have your income cut by half and still manage the payment and put food on the table, you've got the right idea.

Even those who are well-paid in stable industries should allow for the unexpected. Think small, think longterm and think surviving a crisis. One of the most traumatic things that can happen is to lose your home, and treating it as an investment is pure gambling.

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