Making Housing More Affordable for Renters and Owners

6 Ways to Make Housing More Affordable

Housing is one of the highest expenses we will ever face, whether you own or rent. There are valid arguments for both sides of the rent/buy debate, but no matter what you need to do, there are ways to reduce your expenses.

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RENTERS:

Offer to exchange services for reduced rent

My partner and I used to live in an apartment building, and the superintendent was an older lady. She had assistant supers who worked outside jobs, so when it snowed, there was not always someone who could shovel right away. (Don’t forget I am in Canada, and we can get whoppers of snow fall now and again!) My partner used to come home from work, and immediately grab a shovel to clear the walkways and exits. He did this without being asked, as he saw the superintendent struggling with it, or because it was easier to clean the walkway than to track in snow throughout the hallways and wait for it to be cleared. Our superintendent was not able to reduce our rent for this help, but come summer, we did not pay for air conditioning hydro charges AND she was going to give us a free window air conditioner. We did not do this for the benefits, but sometimes offering to help out can reduce your expenses.

I have also heard of agreements where the tenant is responsible for grass cutting, or snow removal, or painting units in exchange for rent reductions.

Note: Get your agreement in writing if it is a substantial amount of work being exchanged.

Pay Rent On Time For A Discount

Some property management companies and property owners will offer a discount if you pay your rent on time. It can range from 5-15% of the total rent, provided that each month, you pay on or by the due date. Ask your superintendent or landlord about getting a discount if you pay on time, every time.

Rent a Less Desirable Unit

I’m sure you’ve heard of penthouse suites as the most desirable units, and there’s always rumours about those nasty units that are like caves or crawl spaces. Some property owners have renovated basements into lovely apartments, with decent windows, a lot of natural light and they rent for less because they are a basement unit.

When looking for a new place to live, ask your property manager if there is a cheaper unit. Sometimes it’s a few square feet smaller, by an elevator, or partly in-ground… but they can be just as nice or nicer than the units that go for premium dollars.

Pay For Your Own Utilities

If your apartment has the option to be independently metered, or you are looking for a new place, try to find one that does have separate meters for utilities.

If you live in a building without separate meters, then you usually pay a share of the total bill. Problem with this is, your neighbor Jill knows she doesn’t pay for gas or water, so she runs hot water on everything, and as often as she can. You, on the other hand, wash laundry in off hours on cold water, have short showers and never waste hot water if you can help it. Why would you both pay the same amount towards utilities when it’s clear you are not the main user?

Even if the units are only metered for hydro or gas, it will help reduce your costs because you are in charge of the usage. If you are conscientious about turning off lights, using little hydro and being as energy efficient as possible, your hydro bills will be but a percentage compared to your neighbor.

Savings on your utility bills means more in your pocket!

RENTERS AND OWNERS

Rent Out A Room or Space

Renting out a room doesn’t always equal a full-time roommate. You could:

  • Rent space in a basement or empty room for storage while people are moving
  • Rent space for small businesses to store stock
  • Rent to a shift worker who works during the week in a city but resides on weekends elsewhere
  • Rent as a bed and breakfast or AirBnB
  • Rent to an international student who needs a place during the school year
  • Rent out a garage for winter storage (cars, motorcycles, summer tires, etc.)
  • Rent out a garden shed or greenhouse to growers (of the legal kind)
  • Rent out your garden to a neighbor who needs more growing space
  • Rent your parking spot if you do not have a car
  • Look into wind power or solar power – some companies will pay you to install their products on your property
  • Rent out your basement kitchen to people who need more room for canning, freezing, meal preps, etc.
  • And, of course, there is the traditional idea: rent to someone as a roommate or tenant

Note: if you are renting your space, be sure that you are not voiding your lease by having a sub-tenant or work-from-home business

Do An Energy Audit

There are people who will come in and inspect your home for energy loss. It might be drafts through windows or doors, or even electrical outlets, hot spots in the house, or more efficient ways to set up your home. Recommendations like adding more insulation or plastic wrapping windows could save you a lot of money, especially if you did not know that you were losing heat!

Certain things you can do regardless where you live, and do not need to have an auditor come through. Go to your home renovation centres and ask for the section for energy efficient items. You will find many items that you could install, even on a temporary basis if you are renting, that will help keep the house cooler in the summer, and warmer in the winter.

Note: If you think you can replicate the items for less cost, just be sure that you are not creating a fire hazard. Certain materials are fire retardant, and other materials may fail code.

 

I hope this list will get you started in saving a few dollars and helping you on your way to financial independence!

 

 

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7 Tips you need to know about house hacking

House-Hacking at 22:
7 Tips Before House Hacking

 

HOUSE HACKING

 

When I was 22, my then-fiancé and I purchased our first house. It was a small, raised bungalow style house – about 600 square feet per floor, and it had two apartments in it.

The upper apartment was a one bedroom, living room, big kitchen and full bathroom. The lower unit was a one bedroom with an entry way living room, kitchen, full bath and bedroom.

The house was a great price for us back then. We had to put down 5% and the bank financed the rest. In Ontario, anything financed for more than 80% value requires high ratio insurance, which means the bank is insured if we were to default. We paid for that, of course, and lawyer’s fees as well as land transfer tax, which is a government tax that buyers pay when purchasing land. It’s a percentage calculation based on the value of the property.

So we bought this little house with a great big backyard, and the bottom rental unit was occupied by the seller’s son’s friend. We decided to assume the tenant (meaning, we kept him on).

Here’s some of the tips I learned about buying your first home that you plan to house-hack.

(house-hack: when you purchase a house with intention to rent out or subsidize the costs through tenants while you reside there.)

  1. Assuming tenants that are friends of the seller isn’t always the best bet. Whatever deal they had with the landlord previously does not necessarily continue – like payment arrangements. We had to chase down a few rental payments, which put our payments in jeopardy if we relied on that money.

You also do not have the opportunity to do background checks or credit checks as easily when assuming a tenant, as they already live there and have already “been approved” by the seller. Beware accepting anything sight unseen.

  1. Inspections on the house are only visual-deep. If you have tenants, be sure to ask what the issues are before the inspection. We did not know that there had been water damage in the basement prior to ownership, and as it was well hidden behind drywall not made for a bathroom, it crumbled on us one unsuspecting day.

Tenants are notorious for waiting until the house changes hands and then having a multitude of requests for upgrades and repairs, as the previous landlord and seller may have checked out – aka didn’t care anymore.

  1. Always plan to have enough money to pay the bills, even if your tenants don’t. Especially with property values skyrocketing in most places, you should never buy a property that is above your needs and means. For us, we made sure that we could afford the house without the tenant, but having a tenant meant we were mortgage free.
  1. Check your heating and air conditioning. If it’s all one system, and it’s in the basement, you will need to advise the tenant you need access if there’s ever an issue. Same goes for the electrical panel. Have a saucy tenant? They could turn off your hydro at any time!
  1. The other part of having only one heating system is that what goes in must come out. If one party smokes and the other doesn’t, it will still cycle throughout the house. Even if you have a smoke-free policy, it is very hard to enforce and you may find your part of the house filled with some interesting smells, and that also includes cooking, and anything else that is released into the air, like candles or incense.
  1. Who has access to the backyard? Who has access to the front yard? Our home had a huge backyard that we fenced in for our dog. Some tenants might find that a deal-breaker and want access. Make sure that you check with your tenant before you make major changes.
  1. Designate parking. Even though you own the property, your tenant or roommate might not agree that it entitles you to the main parking spot. That goes for single drives – be sure you can get your car out of the driveway when you need to!

These tips might seem straightforward, but be sure to think about them before you jump into house-hacking. We were young, and it was sometimes a disadvantage when we were looking for tenants because there wasn’t the same amount of respect for a young landlord.

Check into home insurance for renter coverage. Some may require a different insurance when you have tenants under your roof, and some may require that your tenants have their own content insurance, should anything happen.

Also, remember that there are people who count on you to provide them with the roof over their head. That means if anything breaks down (like a furnace or roof), it’s up to you to fix it promptly and safely. Even if they don’t pay rent on time (or at all), it’s a different situation when the necessities of life are being threatened. Be sure you can afford your house and all the bills, plus any repairs.

Lastly, no one cares for your home the way you do. Try to bank that extra money for a while until you have a good nest egg for any surprises that come your way. You’ll be amazed at how much better you can sleep at night when you are ready for anything!

Good luck and happy house hacking!

 

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My Colossal $10K Mistake

mistakeBackground 

When I was 18, I went to college for the first time. I studied Social Service Worker, in hopes of working with people who had addictions, relationship rescues and job coaching. I had recently left my childhood home, and was on my own for the first time. I hadn’t really planned on it, as it was a sticky situation surrounding my move out. Like every other student, I applied for student loans, and thought, once I became an adult, I would be making lots of money to pay this back.

Oh, How Life Mocks Me!

I started working in a call centre to tide me over until I found that “real job”. I called out to those who had mail ordered pantyhose for three months, and then the campaign ended, leaving us out of work. A newer centre was starting up down the street, and I hadn’t found that amazing opportunity yet, so I applied and was hired on there.

mistake

What I Didn’t Know Could Fill A Swimming Pool… 

Lessons in money were never my strong point when I was in my twenties. I lived like others did, I ate out, spent money quickly, and barely paid my debts. Rent was always paid on time, and I always had work, but never made much of a living. I thought I’d paid off everything that I owed.

After I had left the call centre world (which is a story unto itself), I had been married, separated, a home owner, a landlord, and went from having my life moving into the right direction to having it stop completely, and start a slow slide to the bottom.

Career Change, Life Change, Pocket Change…

It was time for a change, and so I attended college again, this time focusing on law studies. I received my diploma in Law Clerk two years later. I need to interject for a moment: my (ex)husband and I had discussed my return to school, and had thought that working as a law clerk would be something I would enjoy, and would supplement our income nicely. The position was never intended to be one that brought in a lot of money, as my (ex)husband was in IT, and was doing well.

Fast forward to the second month of school, and I was unemployed, and newly separated. I was in school fulltime, and the program required a lot of time and effort. It was rumoured to be the toughest at our school. I did what any student would do – I turned back to student loans to make it through the years.

mistake

A Super Short History Of Student Loans 

In Ontario, student loans are divided into two sections: provincially funded and federally funded. The loans were structured very differently the second time I attended school, as the first time I had a bank I could walk into and discuss what the loan repayment structure looked like.

The second time around, I had no one to speak to, and received the odd piece of mail. I moved a few times, being a student without a home for a bit. Throwing myself into my new career, I started at the bottom of the ladder, making a measely $12 an hour. Not enough for a single person to live on, and to make payments of student loans when they wanted $400-$500 monthly. No sir, their payment plan nearly rivelled any rent I paid. So I did what I had to do to keep food on my table.

I Stopped Making Payments

Yes, today I hang my head in shame and think about all the things I could have done differently, and how I chose to not. I chose to stick my head in the sand and pretend that it would go away. My income rose, dollar by dollar, over the years, never really keeping up with inflation, and I changed employers like I changed addresses. I was looking for the right fit.

Eventually, the Canada Revenue Agency sent me some scary looking letters, and I arranged a payment plan with them. I had been paying for a couple of years by that time, when I received a telephone call from a collection agency. This collection agency said they had received my student loan from the government, and they were collecting on their behalf. Thinking it was fraud, I demanded a statement. The representative said they couldn’t provide me with one, and I hung up.

mistake

Fraud or Not? 

This company continued to call me, and I continued to dodge them, as they were your stereotypical collection centre: give me money or you will be sued! Who wants to speak to those people? Not me. Finally, about six months after that, I answered the phone and told them again, I want a statement. The girl on the phone again said it was something they couldn’t provide, so I told her that I would not be willing to pay them money if they couldn’t prove what it was for.

September 2017, I Started Blogging 

Fast forward to the beginning of my blogging days here, about six months ago. I had started researching investments, and getting serious about paying off debt. My partner and I had cut back on services that we didn’t need, and we worked together to reduce our expenses. I decided to start blogging about my journey, as I had studied ways to save money, ways to make the dollar stretch, how to cut out expenses, but I had never looked at investing, or how much debt really costs. I wanted to share all of this with others in the same boat, as I was sure there were others.

If any of you recall, I had applied for a new bank account with a local credit union. I found out that I had been declined because of a collections on my credit bureau. Sure enough, it was this collections company representing the unknown portion of student loans.

mistake

Yes. It’s True. It’s All Mine. 

What a depressing moment that was, to see that I was another ten thousand in debt than what I originally had thought. I cried. I don’t admit that too freely, but I cried. I got mad at my partner because I can’t fix it tomorrow. I felt guilty at spending money on anything, and felt guilty to the point of eating food because it cost money, and not eating food as waste costs money as well. I started telling myself I didn’t need the extras, and then I would swing to the other side. My husband is an enabler. He supports me if I don’t spend, and supports me if I do. He just floats along with the thought that we will always have debt, we will always have to work, and there’s nothing that we can do to change it.

I’m mad. Fired up! Angry!

I’m really angry at myself, and at the choices I made. Did I think I could just outrun this debt? Why did I accept so much? Why did I spend it all or try harder? What was I thinking, all those years ago?

I wasn’t thinking. Instead, I was thinking about new clothes, a trip to Las Vegas, paying my share of groceries and rent, adopting pets, etc. It’s embarassing to admit this to everyone, but I am hoping someone reads this and thinks twice: 

1. You can’t run away from debt.
2. Student Loans need to paid back.
3. Think twice about your lifestyle.

1. YOU CAN'T RUN AWAY FROM DEBT. 2. STUDENT LOANS NEED TO PAID BACK. 3. THINK TWICE ABOUT YOUR LIFESTYLE. Click To Tweet

In July of 2016, I quit smoking. I was a pack-a-day smoker, and more on weekends. Did you know cigarettes cost over $10 a pack for the brand I was smoking? Literally, I was wasting over $300.00 a month, for twelve years. I could have paid my student loans off FOUR TIMES. When I realized that smoking was costing me that much money, together with the fact that I don’t want to die a horrible death I may have been able to prevent, I quit. (Still smoke free, actually.)

mistake

Owning My Mistake.

This is my $10k mistake. Perhaps it’s more like a $50k mistake, all things considering, but the debt is around $10k. It’s time to annihilate this debt and to make my credit work for me, and not against me. It’s time to pay for my education.

Time to Hustle

So watch me hustle, spend less, do more, find freelancing work, find any work, write hard, blog harder, etc., because I really want this paid off in four months. Yes, four months. My current salary will not support even half of that, so it’s time for some hustling.

Are you hiring? Do you have any freelancing work for me?

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This post may contain affiliate links, meaning, at no additional cost to you, I may earn a small commission if you choose to purchase through these links. Please see my disclosure for more information. Amazon Affiliate Disclosure: I am a participant in the Amazon Associates Program, an affiliate advertising program designed to provide a means for me to earn fees by providing links to Amazon.ca and affiliated sites.