{"id":144498,"date":"2022-09-01T13:59:16","date_gmt":"2022-09-01T19:59:16","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=144498"},"modified":"2023-08-08T14:56:44","modified_gmt":"2023-08-08T20:56:44","slug":"this-strategy-can-buy-you-a-house-several-years-faster","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/this-strategy-can-buy-you-a-house-several-years-faster","title":{"rendered":"Sublet or Save: This Strategy Can Help You Buy a House Several Years Faster"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm?e=BIGPOC6119104424&#038;light=false\" width=\"100%\"><\/iframe>  \n\n\n\n\n<p><a class=\"editor-rtfLink\" href=\"https:\/\/www.rentcafe.com\/blog\/rental-market\/market-snapshots\/downsize-for-a-downpayment-in-less-than-5-years\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">RentCafe recently released data<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;that suggests one-in-three renters are willing to downsize their homes to save more money for a down payment on a property.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">In an analysis of 200 markets, the city with the best opportunity to save cash by downsizing by just one bedroom was Dayton, Ohio, where renters could save an extra $3,168 annually. Given Dayton\u2019s cheap housing market\u2014with starter homes costing a median price of $57,652\u2014it would take a renter a little less than two years to save the money needed to make a 10% downpayment.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Sounds great! Right?<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Not really. Why downsize when you can sublet? In this article, we&#8217;re going to cover subletting and how it makes more sense to sublet your rented property than to downsize in the name of savings.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">What is Subletting?<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Subletting, or&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/glossary\/sublease\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">subleasing<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;(usually used in commercial real estate), is where you rent out a room or part of your rented home to another tenant. Think of it like <a href=\"https:\/\/www.biggerpockets.com\/real-estate-investing\/house-hacking-strategy\" target=\"_blank\" rel=\"noreferrer noopener\">house hacking<\/a>, but you\u2019re a renter, not a homeowner.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Subletting can be an excellent way to create passive income if you have the extra space. However, it\u2019s not always possible to sublet. You\u2019ll need permission from your landlord first. Then you\u2019ll need to ensure local laws allow for it and if your renter\u2019s insurance will cover it.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">If you get the green light from your landlord and the other two pieces are in place, then this would be an excellent opportunity for you to earn extra income and dramatically accelerate the path towards homeownership.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">How Much Time and Money Can Subletting Save You?<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">In this analysis, we\u2019re going to use the same markets that RentCafe suggested had the best savings potential, but show the difference between subletting and downsizing.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">To do this, we used data from&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.rent.com\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Rent.com<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;to find the average cost of a one-bedroom rental property in each market. This is used as the market price for what the average two-bedroom renter would sublet one of their rooms for.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">In this scenario, you would sublet your second room at market price and collect monthly revenue. For simplicity, we\u2019re not going to factor in the various expenses associated with landlording. Instead, we\u2019re just calculating the length of time it takes to generate enough revenue to place a 10% down payment on the typical starter home in the market.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">The results are pretty amazing.<\/span><\/p>\n\n\n<p><iframe title=\"20 Markets Where Subletting Is More Effective Than Downsizing\" aria-label=\"Table\" id=\"datawrapper-chart-uiqxB\" src=\"https:\/\/datawrapper.dwcdn.net\/uiqxB\/4\/\" scrolling=\"no\" style=\"width: 0; min-width: 100% !important; border: none;\" height=\"898\" frameborder=\"0\"><\/iframe><script type=\"text\/javascript\">!function(){\"use strict\";window.addEventListener(\"message\",(function(e){if(void 0!==e.data[\"datawrapper-height\"]){var t=document.querySelectorAll(\"iframe\");for(var a in e.data[\"datawrapper-height\"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data[\"datawrapper-height\"][a]+\"px\"}}}))}();\n<\/script><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Here\u2019s what each column means:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><span data-preserver-spaces=\"true\">Market<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;- Location<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Avg. 1BR Price<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;- The average price of a one-bedroom unit in the market<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Annual revenue<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;- Avg. 1BR price multiplied by 12<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Median 10% Downpayment -&nbsp;<\/span><\/strong><span data-preserver-spaces=\"true\">Based on median sales prices in the market<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Time Needed to Save -<\/span><\/strong><span data-preserver-spaces=\"true\">&nbsp;The amount of time it takes for revenue to reach the 10% downpayment<\/span><\/li>\n\n\n\n<li><strong><span data-preserver-spaces=\"true\">Time Saved by Subletting -&nbsp;<\/span><\/strong><span data-preserver-spaces=\"true\">The amount of time you save subletting compared to downsizing by one bedroom<\/span><\/li>\n<\/ul>\n\n\n\n<p><span data-preserver-spaces=\"true\">Quite clearly, it is significantly more lucrative and efficient to sublet a room than to downsize. Of course, you\u2019d be paying taxes and other expenses during the process, but you could still shave as much as two years off in some of these markets.<\/span><\/p>\n\n\n\n<p>In Cleveland, for instance, subletting instead of downsizing results in time savings of nearly three years! <span data-preserver-spaces=\"true\">If it\u2019s allowed, why would you not sublet?<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Conclusion<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">I think the biggest takeaway from this analysis is that with an extra few minutes of thought, you could accelerate the path to homeownership by years while generating extra income at the same time.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Of course, subletting is not always an option, but perhaps that\u2019s something you should be thinking about when looking for somewhere to rent in the first place. It shows that even as a renter, there are still ways for you to get actively involved in real estate investing.<\/span><\/p>\n\n\n\n    \n  <div id=\"visibility-group-block_64dd5ab97ed79\" class=\"visibility-group  hidden\">\n        \n\n<div id=\"hero-block_62df1a82bfc88\" class=\"first:mt-0 hero-block py-4    has-background has-slate-200-background-color has-text-color has-slate-900-color\">\n    <div\n        class=\"gap-10 lg:gap-20 flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 lg:w-2\/3 \">\n            <main class=\"py-4\">\n                \n\n<p class=\"has-large-font-size\"><strong>Analyze Deals Like a Pro<\/strong><\/p>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color\" style=\"font-size:16px\">Deal analysis is one of the first and most critical steps of real estate investing. 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Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more. <\/p>\n\n\n\n<div id=button-custom-event-block_64dd2888dba9e class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/signup\" x-on:click=\"window.analytics.track(&#039;Blog Block | Acquisition | Free Membership Signup&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/this-strategy-can-buy-you-a-house-several-years-faster&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Sign Up<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n            <\/div>\n<\/div>\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n  <\/div>\n  <\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>RentCafe recently released data&nbsp;that suggests one-in-three renters are willing to downsize their homes to save more money for a down payment on a property. In an analysis of 200 markets, [&hellip;]<\/p>\n","protected":false},"author":612375,"featured_media":144500,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7119,5183],"tags":[],"class_list":["post-144498","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-biggerpockets-daily","category-landlording"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/144498","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/612375"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=144498"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/144498\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/144500"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=144498"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=144498"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=144498"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}