{"id":172476,"date":"2024-05-27T08:55:02","date_gmt":"2024-05-27T14:55:02","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=172476"},"modified":"2024-05-27T08:55:39","modified_gmt":"2024-05-27T14:55:39","slug":"how-i-live-without-housing-costs-or-transportation-costs","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/how-i-live-without-housing-costs-or-transportation-costs","title":{"rendered":"How I Live Rent-Free and Car-Free: My Journey to Zero Housing and Transportation Costs"},"content":{"rendered":"\n

The two <\/span>largest<\/span> expenses for most households are housing and transportation. <\/span>In fact,<\/span> they account for over half of the average household budget. The <\/span>BLS Survey of Consumer Expenditures<\/span><\/a> found that in 2022, the average household spent 33.3% of its budget on housing and 16.8% on transportation. <\/span><\/p>\n\n\n\n

Knock out those expenses, and you instantly have a savings rate of over 50%. Imagine how quickly you could build wealth if you put half of every paycheck toward investments like real <\/span>estate?<\/span> <\/span><\/p>\n\n\n\n

I don\u2019t have to imagine. My wife and I live entirely on her (modest) income and save and invest all of mine. Over the last five years, we\u2019ve quintupled our net worth. <\/span><\/p>\n\n\n\n

Before you write me off as a nut or a FIREbug, hear me out. Admittedly, I\u2019m a bit of both\u2014but that\u2019s why these crazy ideas are so much fun. <\/span><\/p>\n\n\n\n

From Two Cars to Zero<\/span><\/h2>\n\n\n\n

Once upon a time, my wife and I each owned a car, like most American couples. But cars are expensive, and that goes beyond making car payments. <\/span><\/p>\n\n\n\n

Owning a car means <\/span>not just<\/span> making monthly payments on a car loan <\/span>but also<\/span> paying for auto insurance, gas, repairs, maintenance, and parking.<\/span> The <\/span>annual cost to own<\/span><\/a> a new car is over $12,000. Yikes.<\/span><\/p>\n\n\n\n

In 2015, my wife and I <\/span>moved overseas<\/span><\/a> to Abu Dhabi. We initially just assumed we would each rent a car because that\u2019s what people do, right? Every adult has their <\/span>own<\/span> <\/span>car<\/span>, end of story. <\/span><\/p>\n\n\n\n

But we paused and <\/span>actually<\/span> bothered to ask ourselves: Do we <\/span>actually<\/span> <\/span><\/em>each<\/span> need a car?<\/span> She would be commuting a half hour to the school where she\u2019d work, but our apartment was in a somewhat <\/span>walkable<\/span><\/a> area. Could I get by without a car during the workday? <\/span><\/p>\n\n\n\n

We decided to try sharing a car and see what happened. Within a few days, it was clear we needn\u2019t have worried. <\/span><\/p>\n\n\n\n

Then <\/span>in<\/span> 2019, we moved to Bras\u00edlia. We asked about housing options, and the school said most teachers live within a 20-minute walk of the school. <\/span>So we paused to think <\/span>once<\/span> again: Could we live without a car <\/span>at all<\/span>?<\/span> <\/span><\/p>\n\n\n\n

The city is walkable, with countless restaurants, cafes, bars, and grocery stores within walking distance of our apartment. Again, we decided to try it. <\/span><\/p>\n\n\n\n

Sure enough, we lived quite comfortably without a car. We walked, biked, and occasionally Ubered where we needed to go. If we wanted to have a weekend getaway, we rented a car. <\/span><\/p>\n\n\n\n

Last year, we once again moved to a new city. <\/span>In Lima, Peru, my wife once again needs to commute to work by car, but this time <\/span>we decided to go in on<\/span> a carpooling agreement with another teaching couple.<\/span> <\/span><\/p>\n\n\n\n

I don\u2019t miss having a car one bit. <\/span>In fact,<\/span> I dread moving somewhere with a \u201cdrive everywhere\u201d mentality. <\/span><\/p>\n\n\n\n

Getting Rid of a Car<\/span><\/h2>\n\n\n\n

What does it take to get rid of a car? It requires intentionally planning where you live. <\/span><\/p>\n\n\n\n

It helps to move somewhere walkable. <\/span>You can<\/span> extend your mobility radius <\/span>by biking as well<\/span>.<\/span> I often ride a bike or electric scooter to get around our city. <\/span><\/p>\n\n\n\n

Cohabitating as a couple also helps. It\u2019s <\/span>a lot<\/span> easier for two people to share one car than for a single adult to live carless. <\/span><\/p>\n\n\n\n

Plus, <\/span>telecommuting<\/span><\/a> also helps. <\/span>I can work from anywhere, although <\/span>in practice,<\/span> I opt to work from a co-working space.<\/span> That still leaves plenty of options for living within walking or biking distance from \u201cthe office.\u201d <\/span><\/p>\n\n\n\n

The bottom line:<\/span> To comfortably live with one less car\u2014or no car at all\u2014you have to choose where you live with intentionality. But it can save you five figures a year, which you can put toward reaching <\/span>financial independence<\/span><\/a>. <\/span><\/p>\n\n\n\n

And that says nothing of the health benefits of walking or biking over driving. There\u2019s a pithy quote floating around the interwebs: \u201cDriving costs you money and makes you fat; biking saves you money and runs on fat.\u201d I love it. <\/span><\/p>\n\n\n\n

Getting Rid of Your Housing Payment<\/span><\/h2>\n\n\n\n

You have plenty of options to shed your rent or mortgage payment.<\/span><\/p>\n\n\n\n

In our case, we enjoy free housing provided by my wife\u2019s employer. <\/span>It\u2019s a great perk <\/span>of<\/span> <\/span>working<\/span> in international education.<\/span> <\/span><\/p>\n\n\n\n

But you don\u2019t have to be an international educator to enjoy employer-provided housing. Plenty of jobs come with free housing. <\/span>Do <\/span>a little<\/span> internet research to see what jobs you <\/span>might<\/span> like that offer this benefit.<\/span> <\/span><\/p>\n\n\n\n

The more common practice among BiggerPockets readers is <\/span>house hacking<\/span><\/a>, of course. That could mean the classic <\/span>multifamily house hacking model<\/span><\/a>, where you buy a two-to-four-unit property, move into one unit, and rent out the others. Or it could mean any number of other house-hacking strategies. <\/span><\/p>\n\n\n\n

When I bought my first home years ago, I rented <\/span>out<\/span> a spare bedroom. My housemate\u2019s rent covered three-quarters of the mortgage payment. <\/span><\/p>\n\n\n\n

A friend of mine rented <\/span>out<\/span> a bedroom and bathroom in her apartment on Airbnb. She found that <\/span>if she rented<\/span> it for two long weekends each month<\/span>, it<\/span> covered most of her rent.<\/span> <\/span><\/p>\n\n\n\n

My cousin rented her entire apartment out on Airbnb. Whenever someone booked it, she crashed with her fianc\u00e9. <\/span><\/p>\n\n\n\n

My cofounder at SparkRental and her husband <\/span>hosted a foreign exchange student<\/span><\/a>. The monthly stipend covered their mortgage payment.<\/span><\/p>\n\n\n\n

\u201cGet creative as you brainstorm ways to house hack,\u201d Brian Meiggs, founder of <\/span>BeerMoney.co<\/span><\/a>, tells BiggerPockets. \u201cCould you rent out storage space? Parking space for a car, RV, or boat? Could you set up an <\/span>ADU<\/span><\/a> at your home inexpensively? Keep researching ideas until you <\/span>find a way to<\/span> knock out your housing payment.\u201d <\/span><\/p>\n\n\n\n

Don\u2019t Write Off \u201cRentvesting\u201d<\/span><\/h2>\n\n\n\n

The first property I ever bought wasn\u2019t a home. It was a rental property. <\/span><\/p>\n\n\n\n

Likewise, today, I live in a rented apartment on another continent. Do I worry about missing out on homeownership? <\/span>Absolutely<\/span> not\u2014because I <\/span>own an interest<\/span> in over 2,500 units spread across the U.S. <\/span><\/p>\n\n\n\n

You can invest in real estate without being a homeowner. You can house hack without being a homeowner. <\/span><\/p>\n\n\n\n

Stop fixating on homeownership as the only option, the thing that the Joneses do. \u201cFrom a cash flow perspective, your home is a liability, not an asset,\u201d notes Chad Ackerman of <\/span>Left Field <\/span>Investors<\/span><\/a>,<\/span> in a conversation with BiggerPockets. \u201cThe less you spend on it, the more you have each month to put toward real investments like investment properties, real estate syndications, stocks, notes, or funds.\u201d<\/span><\/p>\n\n\n\n

Chad should know. He and I <\/span>share a passion for<\/span> passive real estate investing, particularly syndications and notes. <\/span><\/p>\n\n\n\n

These are the kinds of investments we <\/span>go in on<\/span> together in SparkRental\u2019s Co-Investing Club. We meet every month, vet a passive investment together, and club members can <\/span>fractionally invest<\/span> with small amounts if they like.<\/span> <\/span><\/p>\n\n\n\n

By investing small amounts each month,<\/span> you can <\/span>dollar-cost average your real estate investments<\/span><\/a>.<\/span> And nowhere does it say that you have to be a homeowner to do it. <\/span><\/p>\n\n\n\n

Intentionality and Lifestyle Design<\/span><\/h2>\n\n\n\n

You can have anything you want in life. But you can’t have everything. <\/span><\/p>\n\n\n\n

I get to spend <\/span>10<\/span> months of the year overseas, enjoying free housing, a lower cost of living, and outstanding travel. As a trade-off, I can\u2019t swing by my dad\u2019s house for dinner on a random Tuesday or go to my nephews\u2019 baseball games. <\/span><\/p>\n\n\n\n

You can choose to live somewhere that doesn\u2019t require you to own a car. You can find ways to get rid of your housing payment. It may require a trade-off, but until you explore all of your options, you haven\u2019t made a conscious, intentional decision about whether the trade-off is worth saving thousands of dollars a month. Is it worth reaching financial independence years earlier than you would have if you just kept going on autopilot?<\/span><\/p>\n\n\n\n

Bring these decisions out of the <\/span>shadows,<\/span> and shine some uncomfortable light on them. You may still decide you want to keep doing what you\u2019ve always done but make these decisions intentionally. Calculate <\/span>just<\/span> how much you could save by ditching your housing payment or a car. Calculate how many years that would shave off reaching your goals. <\/span><\/p>\n\n\n\n

If you could quit your day job in five years instead of 10, would it be worth making some changes? Only you know the answer.<\/span><\/p>\n\n\n\n

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