≡ Menu

Fun Alternatives To Reduce Your Housing Cost In A Big City

Get new articles via Email:
RB40 won't spam you

Whew, I just got back from spending the weekend at a retreat with a bunch of Mustachians. These great folks are rebelling against the established American consumerism lifestyle by spending less and generating alternative incomes so they can retire earlier. Some local folks put the event together and Mr. Money Mustache himself was able to come out and enjoy the weekend with us. J.D. Roth was also there and it was great to spend more time with him as well. The best thing about the weekend was being able to talk to many people in various stages of Financial Independence. Everyone was good at something and I learned a lot from the Mustachians.

Housing Cost

One of the main tenets of early financial independence is living below your means. This can be difficult if you live in an expensive city like New York or San Francisco. Unfortunately, Seattle and Portland are also getting quite expensive. Home prices are skyrocketing and rents are increasing every year.

One gal I met, Sam*, has quite a dilemma. She is trying to figure out a way to reduce her housing cost so she can achieve financial independence earlier. Currently, she lives in an apartment just a few blocks from her office. The location is great because she can walk to work, but the rent keeps increasing every year. She is paying $1,200/month for rent and that’s a huge portion of her monthly expenses. (I think she said her monthly expense is about $1,500, but I’m not sure.)

*The names have been changed to protect the innocent.

The constraints

Sam has some specific constraints and here they are.

  • Absolutely no roommates – she needs her personal space and she doesn’t want a roommate.
  • Minimal commute – she doesn’t have a car and doesn’t want a long commute. Biking or walking would be ideal.
  • Moving to a smaller condo isn’t going to save much money. Even a small studio can cost nearly $1,000 so it’s not really worth it to move.

Get an RV

So here is Sam’s first idea – get an RV and live on the street. She’d have to get a zone parking permit and move the RV every 72 hours. However, she can park near work so the commute wouldn’t be a problem. She’ll hop into the gym for a workout and a shower whenever she needs. It doesn’t sound bad on the surface, but it’s not a very good plan either.

  • Safety – I’m not sure how safe the neighborhood is, but living on the street would be a bit scary for me. I wouldn’t feel secure sleeping in a vehicle in downtown Portland, even if it were an RV. We have high property crime rate here and I wouldn’t want to be sleeping in a vehicle if someone breaks into it.
  • Hassle – We have a pretty high homeless population in Portland and I’m sure the cops would hassle you if they suspect someone is sleeping in a vehicle. I’m pretty sure it’s the same way in Seattle.
  • Hookups – I don’t know anything about an RV, but don’t you need to get clean water and recharge the battery? I suppose if you don’t use the bathroom, then you won’t need to the empty the sewer line. What about heat in the winter?
  • Address – You’re essentially homeless. I guess you can get a PO box. Mrs. RB40 knows a few people who use PO boxes instead of their home address as their mailing address for security reasons.

Anyway, I didn’t like this idea at all. Sam discussed it with many people that night and eventually got a great idea from some Portlanders. What about getting a tiny house and renting a driveway? Apparently, this is a trend in Portland, but I’ve never heard of renting a driveway out. There is even a Tiny House Hotel here if Sam wants to try it out for a few days.

tiny house in big city

Tiny House

What’s a tiny house? It’s just a little house on trailer wheels. They range from 100-200 square feet. They have a small bathroom with flush toilet and hot shower, electric heater, and a kitchen. You can buy a new one for about $40,000 from Shelter Wise, a builder in Portland. I’m sure there must be some companies up in Seattle as well.

The price is a little high at $40,000, but it seems you can recoup most of that back when you sell later on. Also, the saving from not having to pay rent would make it worth it in less than 3 years. You can probably find something a bit cheaper if you don’t mind a lightly used tiny house.

Next, she’d need to find someone who’s willing to rent some space out. It’d probably cost $100-200/month for a small space in the backyard or a driveway. Hopefully she can find someone near her work with an open mind. She’d still need to get hooked up to the sewer somehow.

Fun Alternatives

I like the tiny house idea much better! I think it would be a lot nicer place to live than an RV. Personally, I think the tiny houses are designed with long term dwelling in mind as oppose to traveling around, but maybe that’s just an image I have in my mind. I guess I like living in a house better even if it’s a tiny one.

Actually, I just found out that Seattle prohibits vehicles over 80 inches from parking on most city streets between midnight and 6 a.m. She’d  need to drive the RV out to the Walmart parking lot every night and that wouldn’t be much fun.

So, what do you think about the tiny house idea? It would reduce Sam’s monthly bills by a big margin and help her achieve financial independence quicker. Do you have a better alternative?

  • Aquatic squatting – get an old sailboat and anchor it nearby. In Portland, we have quite a few boats anchored in the Willamette River downtown. You have to move every 14 days, but it seems like a cheap way to live if you can handle it. Rules are changing to prevent this, though.
  • Manufactured home – More affordable than a conventional home. Not sure if there are any near downtown Seattle, though.

*Update* – Unfortunately, the tiny houses are technically considered RVs for legal purposes.  In King County you are not allowed to live in a RV for more than 180 days. So the tiny house option is out for now. 

Photo credit: flickr Tomas.Quinones

Get update via email:
Stay in touch with Joe and see how he handles Retiring by 40 and being a stay at home dad.
We hate spam just as much as you

{ 41 comments… add one }

  • HappyLater June 2, 2014, 1:09 am

    The tiny house idea is fantastic. One thing that will be more expensive is heating. An appartment is insulated well through the other appartments but a tiny house is more exposed to the elements.

    • retirebyforty June 2, 2014, 9:08 am

      Actually, I read that the tiny house is insulated pretty well. Sure, it doesn’t retain as much heat as an apartment, but the footprint is much smaller so it’s much easier to heat. It would be interesting to see the heating bill.

  • MrsFinancialFreedom June 2, 2014, 1:10 am

    I think living in a tiny house would be a good solution in finding cheaper long-term housing. Where I live, quite a few people I know have sold up their houses and now live on a canal boat. Canal boats can be very spacious and a lot are moored at long term mooring posts so you can have you own little letter box as well.

    • retirebyforty June 2, 2014, 9:08 am

      I would love to live in a canal boat for a while. Unfortunately, we don’t have anything like that here in Portland. We do have quite a few people just living in their little boat right on the river.

  • Clarisse June 2, 2014, 1:24 am

    Living in a tiny house would be a good idea, but I think you will have a problem when you have 3 or more kids. 🙂 I saw in Pinterest some ideas about living in a tiny house, it’s very cute and easy to design.

    • retirebyforty June 2, 2014, 9:16 am

      I think it’s just temporary until she achieve FI. I don’t think that would work with a kid either. They need more space.

  • bill June 2, 2014, 5:46 am

    You can rent a small place and use pinewood to just build a simple box house.

  • Crass Cash June 2, 2014, 6:03 am

    I totally agree with the small house idea. I’ve been looking into the same thing. In addition to saving money it creates a much smaller environmental footprint.

  • Andrew June 2, 2014, 6:46 am

    Interesting ideas…if I were single I think I’d consider it. Not sure that small of a place would work for a family…though we do have a relatively small place right now. Also not sure if NYC would allow RVs!

    • retirebyforty June 2, 2014, 9:17 am

      I’m sure NYC wouldn’t allow RVs in the street.

  • John June 2, 2014, 7:05 am

    I think the tiny house idea could work, especially as it’s just her. At any rate, it’s got to be better than parking in the Wal-Mart parking lot at night. 😉

  • TKontheway June 2, 2014, 8:09 am

    I have been able to save a *substantial* amount by living in a manufacture home (AKA: a “trailer”) in a mobile home community. They run the gamut, though…from the oft maligned trashy “trailer park” to the decent, true “community” type places like the one I live in. In Ohio, the nice parks range from $200-$300 per month in lot rent (we pay closer to $200). That’s generally cheaper than property taxes on most $100K+ homes in the area. Ours includes trash and management mows the grass and does the snow removal. I bought my home used for $25,000. It’s 3 bed, 2 full bath and 1280 square feet. Utilities are cheaper since the space is smaller to heat and cool. Most people are surprised when they see the inside…it is like a “real” home! I also did this when I lived in a college town…bought the home for $15K, rented out a room to an international student for the price of the lot rent, and split the utilities…it helped get me through college!!

    • retirebyforty June 2, 2014, 9:19 am

      I like the manufactured home idea, but I don’t think there are any in that area. In Portland, the mobile home parks are in the outlying area and it would be more difficult to commute. Not impossible though. I’ll have to check it out.

  • Stefanie June 2, 2014, 8:41 am

    I think it’s ridiculous to say you’re serious about reducing your costs and then to rule out a roommate.

    • retirebyforty June 2, 2014, 9:20 am

      Yeah, getting a roomate is the easiest way to cut cost. Or buy a house and rent out some rooms. Everyone has their quirks.

    • Cl June 2, 2014, 9:33 am

      Respect other people’s choices, even if you don’t agree. She has decided that she wants to cut costs but live alone. She’s obviously thought about it.

      Zoning laws sometimes prohibit tiny houses from being in backyards, but otherwise it’s a good plan. To me, the $200 a month saves by moving into a studio would be worth it rather than living in a tiny house, but that’s me. I have a roommate and pay less than half of Sam’s housing costs.

  • Dividend Mantra June 2, 2014, 10:24 am


    Interesting idea. Although, I’m not quite sure how the interior livability of one of these tiny houses really differs all that much from an RV. Perhaps in the quality of materials/long life?

    I’m lucky in that I’m currently living in an area of Michigan where homes are extremely affordable. For instance, you see 70s ranch style houses in the 1,100 sq. feet range routinely come onto the market for the $60k range, sometimes less. Sure makes the idea of FI more realistic, even if you’re making much less money than you might make in a more expensive city. Just doesn’t take that much money to run a household like that.

    Best wishes!

    • retirebyforty June 3, 2014, 8:58 am

      That’s a great price for a house in Michigan. The cost of living in the Pacific NW has gone up quite a bit in the last 15 years. It looks like it will keep going up for a while so it’s hard on young people. The small living space would work very well for 1 person, but it would be tough for 2 or more. I guess it depends on the person.

  • Justin @ Root of Good June 2, 2014, 10:48 am

    Given her constraints, I think I would hit up craigslist for a “mother in law suite” or “room over garage for rent”. Find one with a private entrance and a private bathroom. If the place doesn’t come with a kitchenette, build your own! Get a microwave, toaster oven, dual hot plate, and mini fridge and you’re as well equipped as the RV option would put you, and you can probably get all that stuff for $200 if you’re a careful shopper (and/or check out thrift shops or craigslist when students are moving out of their apartments). You technically wouldn’t have to ever interact with your landlord, and you can enjoy your own little room.

    And maybe find a place that’s looking for someone to help out a little. Mow the grass, water the plants, and feed the cat in exchange for free/cheap rent? That may cross the line into the hassles of having a roommate, but at some point let’s face it – beggars can’t be choosers!

    • retirebyforty June 3, 2014, 8:59 am

      That’s a great option too. I’ll update the article with that. I think the problem is there aren’t much availability in her area.

  • Mom @ Three is Plenty June 2, 2014, 12:36 pm

    Manufactured homes can be just as expensive as a “normal” home – depending on size, manufacturer, etc. My mom looked into one before purchasing her (“normal”) house, and she would have saved 1-2k on the purchase price, but the maintenance was expected to be more expensive because they tend to be made more cheaply. Not that they can’t be cheaper, but not necessarily!

    • TKontheway June 2, 2014, 6:35 pm

      Manufactured housing does have its pros and cons. I definitely would not buy new, as the prices have skyrocketed in the past 10 years. I don’t agree that maintenance is necessarily more; it’s true that items are made more “cheaply”…however, I owned three manufactured homes (10 years) and three “regular” homes (18 years) and have found maintenance to truly be less for the MH. Overall, I have saved thousands living in MHs vs. traditional homes (if you total everything…taxes, maintenance, mortgage/lot rent, utilities, etc.) and I plan to never go back to traditional homes again. Still, it is a mixed bag….MH do not resell easily (depending on where you live) and depreciate like cars. But the math has added up very nicely…for me 😉

  • Even Steven June 2, 2014, 12:40 pm

    I think “Sam’s” priorities might be a little off, she is willing to live in an RV 24/7, but not have someone living in the same house as you? I’m ok with officers knocking on my RV to see if I’m a homeless person trying to shack up here, however I refuse to share refridgerator space.

    My comparison to this would be I’m not willing to buy groceries as the prices keep going up, instead I’m going to dumpster dive to make things much cheaper. Without bagging on this too much, Justin @RootofGood hit’s on it correctly with in-law suite’s and a guest house. Paying $1200 look for a $800 apartment, remember though you can only cut expenses so much before it becomes a make more money than your bare bone expenses.

  • Jay June 2, 2014, 12:43 pm

    I’ve investigated the whole tiny-house phenomena and it’s interesting, but generally, it seems just like a nicer version of living in an RV and probably has similar problems.

    I think living on a boat is even worse. A couple I heard of in SF tried this and, when their home sank to the bottom of the bay, they lost all of their possessions.

    But, the weird thing about this whole article is that the thinking seems very backward. It’s all well and good to optimize expenses, but it’s rapidly diminishing returns. Sam needs to come at it from another direction. Buying a nice multifamily would give her a place to live and by renting out the other rooms, she could eliminate her housing costs COMPLETELY, along with a whole host of other benefits! It may even make her some extra money. In my mind, that’s way better than any trailer/apartment/boat she could ever find.

    • retirebyforty June 3, 2014, 9:01 am

      A duplex-fourplex would work well, but I think the price is too high in Seattle/Portland to make sense for a single person. They also tend to be in weird areas.

      • Jay June 3, 2014, 11:55 am

        Yes, this strategy is very location-dependent and you also need the 20% down, need to qualify for the mortgage, etc. But, it’s worth to do some legwork. Go door-knocking, or send out some letters to prospective owners. You just never know. Finding the right place could be an enormous win.

        I just hope she doesn’t put her personal safety at risk for a few hundred dollars a month – it’s not worth it.

  • Daizy June 2, 2014, 3:30 pm

    Zoning and towing issues make the tiny house difficult. Renting someone’s garage or guest house seems like a simpler idea if it is just a temporary situation. I’ve lived in an RV. I liked it but I lived in a nice inexpensive park. RV’s have their own maintenance problems too which can be expensive. I ended up buying an electric mini fridge after the RV fridge died one too many times. Those things are expensive! I want to build a tiny house for my next residence but I have the land and it will be stationary. My nomadic days are over, although, I would like a little camping van for a road trip now and then. There are a ton of tiny house blogs. I hope she does plenty of research.

    • retirebyforty June 3, 2014, 9:02 am

      Thanks for sharing. Yeah, I found out that you can only live in the RV/tiny house for 180 days max. That’s not going to work unless it’s a temporary solution.

  • EL June 2, 2014, 4:23 pm

    I actually saw a Tiny House ad a few months ago, and I think they look cool and affordable. I think it would make more sense to attempt to increase side income and stay in her apartment. As she learns to manage money better she can widen the income and expenses gap, through yearly raises and side hustle income. The RV might be extreme, but in my state we have a few RV parks so people can set up long term residence.

  • davidmichael June 2, 2014, 5:38 pm

    Joe…another interesting article to digest. Thanks for sharing.

    Now about Sam…I disagree with you about the RV idea for Portland, yet you were fond of the Tiny House concept. My wife and I have lived in a 27 foot Lazy Daze MidBath Motorhome for eight years (full time). Since we are retired most of the time, we have used it for traveling about the USA with the last three years mainly in Oregon and Arizona since I decided to work seasonally. Today’s RVs are awesome with everything you want for off the grid living…solar power, generator, comfortable bathroom and toilet…some with washer and dryer (large, expensive units). I recommend buying a used one for $30,000 that has everything to live off grid. Then…move it to a driveway or the back of a house for living and working in Portland. We have actually spent several months in someone’s driveway for free…but the rent could be minimal…about $200 a month. Then…on vacation take it to the beautiful coast or Cascades of Oregon and spend time in the many, exceptional state parks (or National Parks). This is an example of living in a box with “out of the box” ideas. Our living space is about 200 sq feet (after living in a 3000 sq ft craftsman house on three acres for about 12 years. It can be done! (And, to tell the truth, I love tiny homes, but more in the 800 sq foot range.)

    Downsides for the RV…1) Need to find a dump station about every two weeks. It would be great to have one on site. 2) The Oregon winter rains in western Oregon are not so much fun in an RV. If one could park under a slanted roof covering, it would improve the experience 3) An electrical outlet during the winter for space heaters and cooking makes it so much more convenient. That’s why we have RV Parks where everything is provided.

    RV Parks can be very reasonable for a long term basis…rent as low as $300/$400 a month for a 3-6-or 12 month contract plus electric. Whatever way you choose Sam…Good Luck!

    • retirebyforty June 3, 2014, 9:06 am

      Now that I know more about the zoning law, the RV is probably a better idea. You can move it to a new driveway after a few months to avoid paying the fine. 180 days max. I need to see if there are any good RV parks in the Portland/Seattle area. They will probably be a bit out of the way.

  • Sharon June 2, 2014, 8:17 pm

    We have a cabin at our vacation property that is about 400 square feet. That is about as small as I think I could live in for a long period of time. And only because it’s on 120 acres and has a fantastic view. I would try very hard to find a micro apartment, garage apartment or guest house. I have read news stories that many larger cities have builders going into the micro apt concept – – about 200 to 300 square feet. Similar to the size of a hotel room in the city. Small refrig with small cooktop only, etc.

  • Little House June 3, 2014, 6:35 am

    I’ve been a huge fan of the small, little, and tiny house movement and I think a tiny house sounds like a perfect option for Sam*. She could probably purchase one for under $30K. There are quite a few companies in Portland, like the Tumbleweed Tiny House Company and the one owned by Dee Williams – PAD Tiny Houses. There are a few options to choose from that would probably work for her. I’d like to know what she decides!

    • retirebyforty June 3, 2014, 9:07 am

      I found out that the zoning law would make living in a tiny house difficult in Seattle. You can only live there for 180 days max. Probably not going to work for her.

  • Brian @ Luke1428 June 3, 2014, 10:46 am

    I don’t know much about the area but at first thought it seems like the market for these can’t be that great. Would she really be able to recoup the money should she choose to sell later? Or would she be looking at a situation similar to owning a timeshare where you have to dump it for pennies on the dollar? I think the better option to achieve FI is to increase income. A person can only cut so far. Is that an option for her?

    • retirebyforty June 3, 2014, 11:50 pm

      Actually, she is making a pretty good income and she can afford the apartment. She’s just trying to save more.
      I’m not sure about the resale. I need to do more research. I think the inventory is really low at this point so it might not be too difficult to sell.

  • steve June 4, 2014, 3:47 pm

    It seems like you could put together a combination of the ideas already suggested and come up with a comprehensive plan:

    1) buy a small trailer or RV (more stealthy than a tiny house) and rent a driveway to park it in (maybe negotiate for electricity as well). Move it every few months to avoid be caught by the 180 day rule.
    2) if you want to be legal about the 180 day rule you can use a combination of sublets (maybe in the summer when students are gone?) and house-sitting opportunities. Even if Sam just did the RV for 180 days/year and rented the same condo she’s in now for the other 180 days she’d save over $6000/year.

  • Tony June 6, 2014, 12:54 pm

    as impractical as it seems, people have tried living in cars in silicon valley-


  • JP July 20, 2014, 8:49 am

    Tiny houses generally have composting toilets; they do not need sewage hook-up. What they do need is water for the shower and sink. This can be done by running a regular gardening hose to it from the home you are renting space from. Heat and cooking is done by 2-3 small propane tanks. Rental space in someones backyard is generally more in the $300-$450 range.

  • K B September 20, 2014, 11:45 pm

    The information you shared concerning living in an RV on the streets is not accurate. Yes you do need to move your vehicle every 72 hours. You can’t park a wide vehicle just any old place but you can do it in areas that are zoned industrial. As to safety. The cops do not pick on people living in RVs as long as they don’t litter, obey signs that say no parking or no parking between 2am and 5am and follow the rules about moving every 72 hours. What gets people in trouble is being a bad neighbor with local business owners. Doing that littering stuff, blocking their companies parking spaces, etc. There are literally hundreds of people living in their cars, vans and other vehicles on the streets in these industrial areas. Many of them border very nice neighborhoods and they are not in high crime areas. Some of the RV residents band together and travel around the streets as a tribe each in their own RV which means they keep an eye out for trouble such as break ins or break downs. You do want to keep your vehicle in good running order. You do not want to accumulate any unpaid parking tickets, don’t even think about doing that as that will get you towed away. There are not any RV parks withing the city limits of Seattle, same goes for campgrounds. The only choice is to stay overnight in the industrial zones. The police do realize you are sleeping in there but will not hassle you for doing it as long as you comply with the code.

    • retirebyforty September 22, 2014, 10:07 am

      Thanks for your help. I had no idea it works like that. It’s good that the police don’t harass the campers if they comply with the code.

Leave a Comment