In this article, we will discuss ways on how to reduce housing costs. Do you feel like you’re paying too much for rent or a mortgage? You’re not alone.
Some of these tips may be obvious, while others may be more unexpected. But all of them are effective!
So whether you’re looking to save money on your rent or want to get started on saving up for a down payment on a house, read on for our best tips!
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Why learning how to reduce Housing costs is important?
The high cost of housing is a major issue in the United States. In fact, according to this report from the National Low Income Housing Coalition, “There is no state in the country where a full-time minimum-wage worker can afford a one-bedroom apartment at fair market rent.” That’s pretty shocking, right?
Clearly, if you want to be able to afford to live in the United States, you need to learn how to reduce your housing costs. And that’s what we’re here to help you with!
General tips on how to reduce housing costs
For the average person, housing costs are the single largest expense they have. That’s why reducing how much you spend on them can be a great way to start saving money and improving your financial situation.
These are a few general tips that apply to everyone when it comes to reducing housing costs:
How to reduce housing costs #1. Move to a cheaper location
This is probably the most obvious way to reduce your housing costs, and it can be especially effective if you live in a high cost of living area. Consider moving to a smaller city or town, or even out of state altogether.
How to reduce housing costs #2. Downsize your living space
If you’re currently living in a large house or apartment, consider downsizing to something smaller and more affordable.
Not only will this save you money on rent or mortgage payments, but it can also make your life simpler and less cluttered.
How to reduce housing costs #3. Get a roommate
If you’re struggling to afford your current housing costs, consider finding a roommate to split the bills with. This can be a great way to reduce your expenses without having to move or downsize.
How to reduce housing costs #4. Rethink how you use your space
There are lots of ways to make your living space more affordable without moving or downsizing. For example, you could install shelving instead of using dressers for storage, or choose a futon over a couch.
How to reduce housing costs #5. Make energy efficiency upgrades
Making your home more energy-efficient can help you reduce your utility bills, which in turn will reduce your housing costs.
Some simple upgrades to make include adding insulation, installing new windows, and replacing old appliances with Energy Star models.
How to reduce housing costs #6. Look into government assistance programs
There are a number of government assistance programs available for those who need help affording housing.
Programs like Section Eight or the Low Income Housing Tax Credit can provide financial assistance to qualified applicants.
How to reduce housing costs #7. Check out local subsidized housing options
If you’re not eligible for government assistance, there may be other subsidized housing options in your area. These complexes usually have income requirements, but they can offer significant savings on rent compared to market-rate apartments.
How to reduce Housing costs if you rent an apartment
There are many ways to reduce your housing costs if you rent an apartment. You can save money on your rent, or even get free or paid housing.
Some of these options may not be for the long-term, but they can help you save money in the short term until you find a job or permanent living situation.
Here are some tips to reduce your rent and how much money it will cost each month:
How to reduce housing costs #8. Negotiate with landlord
Negotiate with your landlord to lower your monthly rental payment – $30-$50/month savings depending how good at negotiating skills you have (you should practice before meeting with your landlord) – If possible try paying more upfront so that less is due later on, which makes it easier for them too!
How to reduce housing costs #9. Ask for discounts
Ask about any discounts available if he has been there longer than one year as this could mean loyalty from him as well as how reliable he has been with paying rent in time every month which would increase how much they will want to keep his business long-term too!
How to reduce housing costs #10. Move into a smaller apartment
Move into a smaller apartment or house that costs less money each month but still offers all the amenities you need onboard (maybe just some extra space isn’t necessary).
Consider sharing living quarters so everyone pays their fair share instead and minimizes how much needs to go towards housing payments alone if possible at all for you as well as your roommates.
How to reduce housing costs #11. Consider living in a Suburban or Rural area
If you don’t mind living outside the city limits in a suburban or rural area, this can help reduce how much rent you’re paying every month tremendously–sometimes even by half or more!
– Varies depending on how close to the city limit and how nice/large of an apartment it is; could be $400-$600+/month cheaper than what you’re currently paying if renting downtown or in a popular suburb
How to reduce housing costs #12. Live with Friends
Live with family members or friends to save on housing costs. This option isn’t for everyone, but if it’s available to you, it can save hundreds of dollars each month that would have gone towards rent otherwise.
How to reduce housing costs #13. Sublet/sublease part of your space
If your landlord allows it, subletting part of the space may be a good option because this will generate additional income while still keeping your monthly rent at its current rate too!
– $200-$300 per month (depending how much space you have available); could be more if there are multiple people living in that apartment and they’re willing to share their half with someone else temporarily as well so both parties benefit from saving money on housing costs for an extended period without having any major lifestyle changes.
How to reduce housing costs #14. Negotiate before resigning
You can also try negotiating down how much your landlord wants each time before signing another lease agreement–this way no one gets left out when there’s only one spot left and it’s between you and another person vying for the chance to live there.
$50-$100 off your monthly rent cost with a good, solid negotiation; could be more or less depending on how reasonable/flexible your landlord is feeling at that time
If your landlord is not willing to budge on how much rent you’re paying each month no matter what negotiating tactics you try, see if they would be okay with increasing how many months of rent are due upfront so you have a lower balance to worry about towards the end of the lease agreement.
This will require some financial planning and being able to pay several months’ worth of rent all at once without any issue but can free up money for other things like paying off other debt.
How to reduce housing costs #15. Sign a longer lease agreement
Sign a longer lease agreement such as one with six months instead of three–this will lock in today’s current rent prices so you’re not susceptible to any sudden, unexpected hikes that could happen over the next few months and will save several hundred dollars per year on how much money needs to be paid out each month in rent alone.
How to reduce housing costs #16. Be a good tenant
If you are a good tenant, it may be possible for your landlord to give you a discount on how much rent needs to be paid each month.
$50 off per month is a common occurrence for good tenants who have never missed a rent payment, caused any damage to the property, or created any other disturbances; this could be more or less depending on your own personal situation and how well you’ve been able to stick to the rules that were agreed upon when signing the lease agreement.
Make sure you are a good tenant before requesting any discounts from your landlord because they may not be willing to do so if they’ve had any issues with how things are going.
How to reduce housing costs when you are buying for the first time
How to reduce housing costs #17. Find incentives
Find out if you qualify for incentives and other government programs that can help reduce the cost of your home as a first-time homebuyer.
How to reduce housing costs #18. Be flexible
Be flexible with closing dates and other details of the transaction. Sometimes it can pay off (literally) if you are willing to compromise on certain aspects of buying or selling property.
For example, by offering concessions like paying all closing costs or agreeing not sign over rights to personal property during sale negotiations, sellers may decrease their asking prices while buyers may get better terms from lenders such as lower down payments or reduced interest rates than what’s currently available through standard mortgage loans at traditional financial institutions like banks and credit unions.
How to reduce housing costs #19. Buy what you can afford
If you are looking to buy a property, look for one that is within your budget and don’t be tempted to overspend.
Work out how much you can afford to borrow and make sure you have saved enough for a down payment or deposit. Don’t forget about other costs associated with buying a property, such as stamp duty, legal fees and survey costs.
When you are looking for a property, think about how much it is going to cost you to heat and light it. Look for properties that have energy efficient features, like insulation and double glazing.
Think about how much you are willing to spend on transport and whether the area you are looking at has access to public transport.
If you have to commute long distances to get to work, it might be cheaper to buy a property than rent one
How to reduce housing costs #20. Shop around and compare prices
Shop around and compare prices. Don’t just look at one or two houses, look at several to get a good idea of the market. It may be a good idea to use a real estate agent who can help you find what you are looking for and how much it will cost.
How to reduce housing costs #21. Get Pre-approved
Get pre-approved for a mortgage. This will let you know how much money you can borrow and help speed up the buying process.
How to reduce housing costs #22. Search for lower taxes
Look for a home with lower taxes. This may mean living in a suburb rather than the city or looking for a home in a rural area.
How to reduce housing costs #23. Buy less house
Buy less house than you can afford so that your mortgage payments will be lower and leave room in your budget for other expenses.
How to reduce housing costs #24. Put more down
Put more down payment on your home so that you owe less and have a lower monthly mortgage payment.
How to reduce housing costs #25. Get a shorter-term Mortgage
Get a shorter-term mortgage with a lower interest rate. This may mean making higher monthly payments but you will pay less in the long run.
How to reduce housing costs #26. Consider maintenance costs upfront
Consider how much it costs to maintain and fix things, such as replacing an old roof or updating plumbing pipes when calculating how much house is right for your budget.
How to reduce housing costs #27. Involve Family and Friends
Ask your family and friends if they know of any homes for sale. Sometimes people will sell their home to family and friends before putting it on the market.
How to reduce housing costs #28. Look for a fixer-upper
Consider buying a fixer-upper. This can be a great way to save money on your home purchase and you can do the work yourself over time.
How to reduce housing costs #29. Consider foreclosure properties
Look into foreclosure properties. These homes are usually sold at a discount because they have been neglected by their previous owners and need repairs before being habitable again.
How to reduce housing costs #30. Calculate actual square footage needed
Consider how much space you really need versus how much space you want? Is it possible to sacrifice some square footage in order to reduce costs?
How to reduce housing costs #31. Shop around for Mortgage rates
Shop around for mortgage rates from different lenders and decide which one has the best deal for your budget/needs.
How to reduce housing costs when owning your House
How to reduce housing costs #32. Refinance your Mortgage
Consider refinancing your home loan if you have built up equity in your property that could be used to pay down debt.
Refinance your mortgage at lower interest rates if possible will save money on monthly payments over time and can also help reduce how much you owe in real estate taxes each year by lowering how much property value increases from inflationary factors like population growth or economic expansion.
How to reduce housing costs #33. Be Handy
Do some home fixes yourself like landscaping and painting instead of hiring professionals. Learn online in places like youtube for easy common fixes and maintenance for your home.
This will save you thousands yearly and reduce your housing costs dramatically.
How to reduce housing costs #34. Save on energy
Look into ways to save money by switching energy providers; this could include finding cheaper electricity plans with a new supplier and changing how much gas you use each month.
Buy more energy-efficient appliances such as refrigerators, washing machines etcetera. This can often save you money in the long term on your energy bills as well as reduce how much wear and tear these items have, meaning they will last longer.
Switch off lights and other electrical items when you’re not using them to save money on your monthly energy bill.
How to reduce housing costs #35. Pay your Mortgage on a biweekly basis
Pay your mortgage biweekly instead of monthly, which could save thousands of dollars each year since the extra payments add up quickly (and compound interest).
Conclusion – How to reduce Housing costs in 35 Ways
By following these tips you can easily reduce how much money goes toward housing each month without having to make drastic changes in your lifestyle.
It’s important to remember that there are many ways to approach this problem, so find the solutions that work best for you and your family. With a little bit of effort, you can save yourself a lot of money in the long run!
Over to you
Have you looked into ways on how to reduce your housing costs? If so please share your comments below!
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About the Author
Don is a father, real estate investor, self-directed investor and a personal finance enthusiast. He also holds an MBA and loves to share his financial Journey with others.