Ways to Lower Housing Expenses


Cutting out the little things you waste money on is a good way to lower your monthly expenses. Lowering your costs for major unavoidable expenses, like your rent or mortgage is even better. Learn how to reduce housing costs whether you rent, are thinking of buying, or currently own.

Person learning how to reduce housing costs.
Figuring out how to reduce your housing costs frees up money for your financial goals.

Being frugal works wonders.

Frugality can help you get out of debt, build your savings, and reach your financial goals. Unfortunately, it’s too easy to obsess over plugging little money leaks while you neglect saving money on major expenses you can’t avoid. Like housing.

Significantly reducing what you spend a month on housing goes a long way toward helping you meet your financial objectives. Here are some ways to reduce housing costs.

How to Reduce Housing Costs

There are many ways to cut back on your housing costs whether you’re renting, thinking about buying a house, or you already own a home. Here are the best tips for reducing housing costs starting with some general tips for spending less on housing.

General Tips for Reducing Your Housing Costs

Certain housing expenses are universal. Here are a few things to consider if you’re looking to cut your housing expenses without staying in your mom’s basement or fleeing the rat race to a third-world country.

1. Live Where You Work

At various points in my life, to get to work I have routinely:

  • Walked
  • Biked
  • Rode the subway
  • Taken a commuter train
  • Taken a ferry
  • Driven in and out of the city through gridlock

Nothing ever beat living within walking distance to work for me. I had more free time, I got more sleep, and I spent way less money. I could go home for lunch and I didn’t need a car.

Commuting takes so much time, is costly, and is generally just a drag. The longer your commute, the worse it is.

Live closer to work and you could drastically lower your housing costs while improving your quality of life.

It’s not worth it for everyone, but I’ve worked with people who commuted to Boston from Rhode Island and New Hampshire. Commuting that far is an expensive lifestyle that gets old fast.

2. Move to a Cheaper Place

Rent, land value, property taxes, and the cost of living differ so much from place to place in the U.S. If your current living situation is getting financially unbearable, it might be time to consider moving.

Moving from Boston to Georgia was eye-opening. For the same rent, I got a gated community, much bigger rooms, modern kitchen appliances, a washer and dryer in the unit, and a parking space. I wouldn’t need a roommate to afford rent either.

If you rent and don’t want to move far, find a place that’s $100 cheaper. You might even be able to stay in the same neighborhood, complex, or building. Your quality of life probably won’t be impacted much, if at all, and you cut your annual living expenses by $1,200.

There’s almost always somewhere you could live where the cost of living is lower. It’s not the easiest decision and there are logistical issues to deal with, but it’s always an option.

3. Cut Costs When You Move

Moving presents the perfect opportunity for purging some of your stuff, like selling furniture you can’t or don’t want to take with you. The less stuff you have to pack, the less your move will cost. You can pack your own stuff and haul it to your new home in a rental truck or get multiple quotes from different movers and hire the most affordable.

4. Consider Renting Instead of Owning

Homeownership isn’t always a better deal. Whether renting or owning is better comes down to where you live, how long you plan on staying, and the opportunity costs associated with renting versus buying.

Sara and I have moved hundreds of miles for a job three times. Twice we realized within two years it was a huge mistake. So we’ve moved for work, moved back where we came from, and moved again more than once.

If we had purchased a house in the locations we ended up fleeing, we would’ve been miserable and stuck on so many levels. Renting saved us from that.

Read this then figure out what’s best for you: Renting Is Throwing Away Money…Right?

How to Reduce Your Housing Costs if You’re Renting

Just because you’re renting, doesn’t mean your monthly housing costs are out of your control. There are ways you can lower your expenses as a renter.

5. Negotiate Your Rent

Many people assume that rents are firm. In some markets they are, but that’s not always the case. Research prices in your area and see if you can talk your future landlord down.

Renewal time is also a good time for countering a proposed rent increase, especially if you’ve been a model tenant. Finding tenants can be an expensive hassle for landlords. They don’t want to carry rental properties that don’t produce income.

6. Sign a Longer Lease

See if your landlord is willing to offer reduced rent if you’re willing to sign a multi-year lease.

Your landlord gets income stability and doesn’t have to paint or find new tenants in 12 months. You don’t have to worry about a rent increase driving up your monthly housing expenses or moving all your stuff for a while.

It’s a win-win situation with financial benefits for both parties.

7. Get a Roommate

Cutting your monthly housing expenses in half might be as simple as welcoming a roommate. The extra money you save can go toward paying off student loans, building up your savings, or improving your financial life in other ways. Hopefully, they won’t leave forgotten half-full teacups everywhere as my wife does.

8. Know Your Rights as a Tennant

There are all sorts of laws that apply to rental housing. They cover things like evictions, deposits, rent increases, right of entry, repairs, utilities, and more. Know what’s legal and what isn’t where you live.

It’s in your best interests to know your rights. You might need to rely on them someday. Knowing the laws actually put cash in my pocket once.

Years ago when I lived in Boston, my roommate was down in the basement of our building. He noticed there were too few meters for the number of apartments. He called the city for an inspection.

We lived on the first floor. As it turned out, we were paying for all the common area lighting and the washer and dryer in the basement. That might’ve been fine when the owner occupied our unit, but for us as renters, that setup wasn’t legal.

Thanks to our landlord’s illegal metering practices, our electric and gas bills were immediately transferred into his name. We also got back every dime we paid for those utilities over the two prior years. My roommate and I each pocketed several hundred dollars from our refunds.

So it pays to know what a landlord cannot do and understand the laws that protect you as a renter.

9. Work for a Property Manager

Right after college, my wife worked as an admin for a property management firm. She was able to score a nice discount on a one-bedroom apartment in one of the buildings they ran.

Leasing agents who work for property management companies can also usually get reduced rent at the company’s properties. Some companies offer performance bonuses to agents that include free rent if you fill a certain number of vacancies.

Maintenance staff who live on-site also often get reduced or free rent. You might get people knocking on your door in the middle of the night, but if you’re handy and you want to cut your monthly housing expense, it might be worth looking into.

10. Refer a Friend

In some areas, apartment complexes offer incentives for referring new tenants. I’ve seen offers ranging from $200 to a free month’s rent for a referral. You don’t see this everywhere, but in college towns, bedroom communities, and growing places where new apartment complexes are springing up, I’ve seen these promos quite a bit.

Reducing Your Housing Costs When Buying a House

Shopping for a home is about finding the right home, but it’s also about avoiding the wrong one. It’s such a huge financial decision, you don’t want to get stuck with a money pit. The last thing you want is to find yourself unable to afford your housing payment or maintenance costs.

11. Buy Below Market Value

Fixer-uppers, foreclosures, and motivated sellers looking to unload offer unique opportunities to buy property at below-market prices. Do your due diligence thoroughly before you sign, however. In some of these cases, you’re not just getting a cheaper house, you’re getting whatever problems are attached to the property as well.

12. Buy a Smaller House

You should know how much house you can afford before you go shopping for a new home. But even if you can afford a big house, that doesn’t mean you should buy one.

A smaller house is generally a cheaper house to purchase and maintain. Less square footage usually means lower insurance costs, property taxes, and utility bills. Rooms are smaller and there are fewer of them to fill, so you won’t need to buy as much stuff.

If it’s your first foray into homeownership, a smaller starter home might be the best option. Your first home doesn’t have to be your forever home.

Buying a larger house thinking you’ll grow into it might leave you house poor. You could spend so much of your income on housing and its associated costs, you won’t have money left over to put toward your financial goals.

13. Put 20% or More Down

Putting a down payment of 20 percent or more on a house will save you thousands in interest over the life of the loan. You also won’t have to pay for private mortgage insurance every month for the first several years of your loan. If you can swing a down payment of 20% or more, you save a lot of money in the long run.

14. Opt for a Fixed Rate Over an Adjustable Rate Mortgage

Adjustable-rate mortgages offer below-market interest rates initially, which makes them attractive. After the first few years, that low initial rate is going to go up. Depending on the loan terms, your payment could rise frequently as interest rates increase, which could lead to trouble.

With a fixed interest rate, your payment stays the same for the life of the loan. The terms are simpler to understand. You’re also protected from sudden and significant increases in your payments regardless of mortgage interest rates fluctuating.

15. Choose a 15 Year Mortgage Instead of a 30 Year Mortgage

If you opt for a 15-year fixed-rate mortgage over a 30-year fixed-rate mortgage, you pay significantly less in interest. While mortgage interest is tax-deductible, doing a little math will tell you if you’ll save more by retiring your mortgage faster or taking out a longer mortgage and deducting interest on your taxes.

The major downside of a 15-year mortgage is higher monthly payments. A 30-year mortgage makes your payments more affordable, but the loan costs are higher than a 15-year mortgage.

16. Consider House Hacking

House hacking is a real estate investment strategy where you buy a multi-unit property, live in one of the units, and rent out the other units. House hackers use the cash flow from the rental income to offset the mortgage and maintenance bills.

The goal of house hacking is to bring in more in rent than your expenses. That might or might not be possible depending on a host of factors, but owning a multi-unit property and the additional income it provides could vastly improve your financial situation.

A house hack strategy is a smart option if you can afford it and you don’t mind dealing with tenants. It’s also a way into real estate investing and being a landlord if you’re interested in that.

How to Reduce Your Housing Costs When You Own a Home

Owning a home comes with many benefits like stability, tax deductions, and appreciation. There are also plenty of expenses like maintenance, repairs, and property taxes. Here are some ways to cut housing expenses for homeowners:

17. Pay Your Mortgage Biweekly Instead of Monthly

If you make your standard monthly mortgage payment on the first of every month, that’s 12 mortgage payments a year. With 52 weeks in a year, paying half your monthly payment biweekly works out to 26 payments or 13 full payments per year. You probably won’t even notice it.

That one extra payment a year saves you thousands in interest. You’ll also retire your mortgage early.

18. Make One Additional Payment on Your Mortgage

Making one additional lump sum mortgage payment every year can also make a big impact over time. You can shave years and several thousand dollars in interest off your mortgage debt.

If you get a yearly bonus, tax refund, or any kind of windfall, apply the extra cash toward your principal. If you get paid biweekly, during your 3 paycheck months you can put one whole paycheck on your loan if you budget as though it’s a normal, two paycheck month.

19. Refinance Your Mortgage

When mortgage interest rates fall, you might want to think about refinancing your mortgage. By refinancing, you’ll reduce the term of your mortgage and pay less in interest. If you’re planning on staying in the home long enough to benefit from the savings, it could make sense.

Since there are costs and fees associated with refinancing, you’ll have to do some math. Determine how much of an interest rate drop is needed for a refinance to make sense. It could be 1%, 2%, or more.

20. Rent Out a Spare Bedroom

If you have a spare bedroom, you can turn that extra space could turn into extra money. You can use a service like Airbnb for short-term rentals if you’d rather be a host than a landlord. Renting out extra bedrooms will boost your monthly income and ultimately help you save money on housing.

21. Learn Basic Home Repair

Fixing leaky faucets yourself and being able to check other regular home maintenance items off your list will save you tons of money. The time, money, and energy you spend when you DIY seems like a lot, but it’s often a drop in the bucket compared to what a contractor would cost you for their services.

While being handy enough to save money on annual home maintenance is wonderful, there are probably certain types of maintenance tasks you’re better off avoiding. I’ll suck it up and call an electrician if there’s an electrical problem, but I’m not hiring a plumber to fix a running toilet.

22. Review Your Property Records

Check the record of your property with your local real estate assessor’s office. Make sure your square footage, number of bedrooms, and all other information on file are correct. Your property taxes are based on this data, so any errors could be expensive for you.

23. Appeal Your Assessment

Property tax assessments determine how much you owe in property taxes. If you feel your assessment is too high, you have the right to appeal within a certain time after receiving it. Where we live, we have 45 days from the date of the notice to appeal.

If your home’s assessed value is out of line with houses in your neighborhood or comparable properties in your area, you might be able to get your assessment lowered by appealing.

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Featured Image Credit: Unsplash


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