Why cheap rent is better than free rent
First, I’d like to define what I mean by “cheap” in this context. I don’t mean the actual price you pay for rent, but rather the percentage of income you pay.
$800 rent can be cheap for one person, but expensive for another depending on how much they make. This is important to address now because when I say “cheap rent” I don’t mean that you should pay a certain fixed dollar amount.
Cheap in this context will mean paying less than 15% of your monthly income on rent.
So, if your first reaction to paying 15% of your income towards rent is like Luke’s (above gif) then you’d be where I was this time last year. I now pay 5% (and I live in the Bay Area) so I’m firmly believe that 15% is certainly doable.
The benefits of cheap rent that I’ll describe below are drawn from my personal experience of paying between 5–15% over the last 9 months.
But without further adieu…
How do people live for free today?
Now would be a good time to examine a few of the most common ways people end up living for free. This list isn’t exhaustive, but I include it to paint a picture of what living for free typically entails:
- Living with parents/relatives
- House Hacking (this includes renting out a multifamily, subletting, & using Airbnb for extra income)
- Being a Property Manager and receiving free rent as compensation
- Live-in Nanny
- House sitting
There’s something all of these options have in common. They take work!
And work takes up valuable time and headspace. Unless you live in a perfect family, even living with parents & relatives takes work.
If I had a nickel for every time my mom asked me to take out the trash, help her with technology, or run errands I’d be set for life.
So, what does the work that comes with living for free have to do with cheap rent? The answer isn’t immediately obvious so it will take some explaining:
Let’s use James as an example. James currently lives at home for free. While he’s able to save money because he lives at home, his extra time is spent helping his parents with various chores and task. It’s important to note that even when he gets home he’s not truly finished working. This leaves James essentially working sun up to sun down shifts with his only respite being weekends away from home.
(Quick side note: Women have been working unrecognized, sun up/sun down shifts since day one, but that’s for another article)
When James’ father asks him for help with anything it takes up more time and spiritual energy than just the task itself.
It means getting disrupted from any productive activities, having to go help, getting worked up, and returning to one’s room or home office. Trying to return to your flow state after all that is draining and difficult.
The true cost of free rent is the work that’s allowing you to stay in a house for free.
Enter Cheap Rent
This is where cheap rent comes into play. Ever since I started paying 15% (or less) of my income on rent by living with roommates I’ve noticed I have more time than ever. But, with a closer look it’s clear that I don’t have more time, I just have more control over my time.
The beauty is I can spend this newfound time on whatever I want. Whether that be watching Netflix or writing a Medium article.
For people who are pursuing a dream or goal, living in this manner can greatly accelerate your progress. Even, if you don’t have anything groundbreaking going on in life, living cheaply can greatly increase your satisfaction.
And because I now live for such a small percentage of my income, I can now use that extra time I have to do activities that I wouldn’t otherwise be able to do if I lived for free.