Tired of paying rent? How millennials are getting creative with housing
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For a record six years in a row, RV sales have increased — and it's largely thanks to millennials. But what’s even more surprising is they’re not just using these vehicles for camping. They’re using them as a way to live an “affordable, mobile lifestyle,” CBS News reports.
Due to a combination of factors — remote work, stagnant wages and social media-fueled wanderlust — millennials are looking for alternatives to typical housing arrangements. And RVs are just the start. From house-hacking to "boom-mates," here’s how the demo is getting creative when it comes to where and how they live.
For Melissa Dohmen, 30, and Carson Vaughan, 29, from Nebraska, experimenting with living in a trailer for a year seemed like a natural fit.
“We'd both been longing for an adventure for a while and were feeling complacent in our jobs and lives at the time,” Dohmen says. “We didn't have kids or a mortgage or any of the usual excuses for packing up and taking a year-long road trip like this.”
Their total expenses — gas, campsite fees, food, activities and dog care — for a year on the road was $24,000 or about $2,000 per month. Compared to their current housing costs of nearly $12,000 per year, or $1,000 per month, in Omaha, Nebraska, the cost of living and traveling in an RV for a year was actually less than the cost of living at home.
In addition, their income didn’t stop while they traveled. Vaughan’s career as a freelance writer is location-independent and Dohmen works as an entrepreneur, so both of them were able to work from the road in the comfort of their 125-square-foot trailer.
Even though they didn’t necessarily set out to save money during their year of RV living, the couple is happy to report they “came out ahead.” Unfortunately, that isn’t always the case, so it's important to consider your budget carefully before taking this plunge.
When Elizabeth, 29, and Brennin Colegrove, 31, from Anacortes, Washington decided to live on a sailboat, they did so to try and save money.
“We decided to live on sailboat due to real estate being way too expensive,” Elizabeth says. “In addition, it had always been my husband’s dream. The reality is that as a military family, we don’t necessarily have a say in where we live but I knew that I wanted to make the best financial choice.”
With a mortgage of $950 per month for the boat, the Colegroves thought they would be on track to save nearly $1,000 each month compared to the price of a house. However, it cost nearly $40,000 in repairs and maintenance to get the boat in living condition. Plus, a slip rental at the marina cost about $1,500 per month.
As of now, the couple hasn’t saved any money, but they have still enjoyed the experience.
“This is one of the few chances we will have to enjoy life on the water, since most of my husband’s duty stations are in the middle of the desert,” Elizabeth says.
Unlike the Colgroves, Drew, 27, from Washington D.C., who asked his last name to be withheld due to his plans for early retirement from the workforce, decided to “house-hack” for the sole purpose of saving money. House-hacking helps lower someone’s cost of living, or in some cases, allows the hacker to be paid to live somewhere. The most common method involves renting out extra units or rooms long-term. (You can also potentially Airbnb it.)
“The average studio or one-bedroom in my area starts at $1,500 per month,” Drew says. “The first house I bought had three bedrooms. I lived in one and rented the other two out.”
Drew’s roommates covered about two-thirds of his mortgage.
“In other words, I was paying about $800 to own a home,” he says. “This house hack saved me $8,400 in the first year. I also enjoyed the home appreciating in value, renters paying down my loan and tax benefits of owning a home.”
Drew was able to save more after refinancing his home roughly a year after buying it. The re-fi lowered his mortgage by about $400. That meant he was only paying $400 a month to own a home.
“I continued this living situation for six months,” Drew says. “Renting an apartment for six months would have cost $9,000 ...I’ve been able to save a total of $15,000 from house-hacking.”
With a goal of early retirement in his 30s, Drew has been funneling his savings into retirement accounts and taxable-investment accounts. For him, house-hacking is “completely worth it.”
For some millennials, saving money through alternative living arrangements is merely a fringe benefit. When Madicyn H., 25, from Los Angeles, California, who asked that her last name be withheld due to nature of her career, moved into her grandmother’s house, she started living with a “boom-mate,” (a roommate who happens to be a Baby Boomer), but the financial benefits were secondary to the fact that her grandma needed her help.
“I decided to live with my grandparents in 2011 when my parents’ house flooded and we needed to temporarily relocate,” she says. “The repairs to the house took months, and by that time, my grandpa had been diagnosed with cancer and had passed away. I chose to stay to keep my grandma company.”
With the average price of $1,200 for a one-bedroom apartment in the same neighborhood, Madicyn is able to save more than $1,000 per month.
“I’m very grateful to not have to pay rent, since the house is owned by my grandma, but I do most of the physical domestic chores and sometimes help my grandma run errands or go to appointments,” she says.
Whether you’ve got a boom-mate or are living in a home full of tenants, it’s important to stay properly insured. You can learn the ins and outs of renters insurance — and get some free quotes — here.
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