How to Save on Housing Without Downsizing

Housing Finances How to Save on Housing Without Downsizing

Last summer, I was forced to relocate out of my cozy, bungalow-style apartment in West L.A. Living in one of the most unaffordable rental markets in the U.S., I was resigned to the fact that, to enjoy my ideal setup of living by myself, I’d have to pay nearly twice as much for the same-sized apartment in L.A.

The thought of paying more for the same living situation did not sit well with my frugal ways. Spending more on what to me was a boring necessity would mean less money to spend on things I wanted to throw dough on.

After frantically apartment-hunting, I came across a one-bedroom cabin in a canyon area east of Pasadena. I’d have a small yard, and a creek flowing outside my bedroom window. The trade-off? While I would only be paying a few hundred dollars more in rent instead of paying double, my living space would go from a 500-square-foot space to a 300-square-foot one.

I would also end up paying less in utilities and furniture. But that would also mean a big change in scenery, dealing with the stress and logistics of moving, and living in cozier quarters.

You don’t necessarily have to downsize to smaller digs to save on housing. Here are some ways to save without having to move:

Rent a Room

If you have a room to spare or don’t mind renting out your entire home from time to time, consider renting out part of your home on Airbnb. My friend Jack and his partner live near a college. They rent out their two-bedroom home during graduation weekend, and also when both of them happen to be out of town at the same time.

Of course, you’ll want to factor in the extra work it takes coordinating rentals, and any additional cleaning and maintenance fees. And after doing a bit of research on the market rates of rentals in your area, you can gauge whether renting out your abode will be worth the trouble and costs.

Rent Out Your Yard

If you live on a larger expanse of land, consider renting out space in your yard for those traveling in an RV or for those looking for a camping space. This could be a lucrative way to earn some money without having to move. Before you can legally rent out part of your property to campers, you’ll need a source of potable water and a bathroom they can access. Plus, you’ll want to check real estate ordinances — at both the city and state level — on camping in your yard.

Rent Out Your Garage

Along those same lines, consider renting out the garage or basement as a storage unit, suggests April F., who lived in a house in college where the landlord rented out the garage separately. Unlike renting out a room, those who rent out your space most likely will visit their storage space only on occasion, so you can enjoy your privacy for the most part.

You can rake in extra dough by using a site such as Store at My House, which is the self-storage cousin of Airbnb. “If you’re renting it out on your own, look at what similar-sized storage units cost in the area,” says April, who is the founder of Age Gap Couple. “You’ll also want to put restrictions on how you can use the space, electricity, and sign some sort of lease agreement.”

Be More Energy Efficient

Being more energy efficient can save you in your monthly bills. For instance, Doug Nordman installed a photovoltaic array and a solar water heating system. The payoff? He pays only $18 a month on his electric bill, which is drastically lower than the $250 a month average in Hawaii. “We were early adopters in 2005, and the systems paid for themselves by 2010,” says Nordman, founder of The Military Guide.

You don’t have to necessarily invest a whole lot upfront to save on your utility bills. Making smaller tweaks, such as LED light bulbs, energy-efficient power strips, and low-flow showerheads and faucet filters, can reduce your electric and water bills. When I lived in a tiny studio apartment and was super frugal, I hung up strings of LED lights in lieu of fluorescent bulbs, and showered and cooked using a battery-powered camping lantern. It probably saved me $20 a month, and it was super fun!

Make the Most of Tax Breaks

Besides making money directly from your home, consider saving by way of tax deductions. There are a few ways you can go about doing this. The first is if you’re self-employed. If you set aside space in your home — say, a room, or designated area in your home — that you use exclusively for your business, then you could qualify for the home office tax deduction. The deduction is in direct proportion to your home. So if your home office takes up 15% of your place, you can deduct 15% off your rent and utilities.

You can also net tax breaks by installing equipment that has to do with solar, wind, cell-fuel or geothermal technology. The Residential Renewable Energy Tax Credit offers a 30% credit on both the equipment and installation of solar panels, solar-powered water heaters, and geothermal heat pumps.

You don’t need to necessarily downsize to a smaller home or own a multi-unit property to save money on housing. By looking for ways to both save on costs and earn more on your current home, you can boost your cash flow without having to uproot.

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