Depending on how you want to run the numbers, I’m going to save somewhere between $16,000 and $52,000 between the years 2013 and 2017 on my housing costs. The best part about it? It really wasn’t that hard.
In the summer of 2013 I found myself between a rock and a hard place. My wife and I had decided to move out of our current home, which we were renting for $2,750 per month. Although that was a reasonable price for that home and that neighborhood, our landlord had informed us that he was going to be raising our rent when our current lease expired. Although the rental market was hot, we felt like we could find a better deal, so we declined the lease extension and began the search for our next home. We had two months before we needed to be out.
Finding our next place turned out to be more difficult than we thought, but as you’ll see, it turned out to be well worth our efforts.
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OUR RENTING BACKSTORY
The rental market in the Seattle area at this time was hot! hot! hot! It was easy enough to find a home that fit our needs, but each time something promising would appear, it was snatched up just as quickly. Before we knew it, two months had passed and our lease was up. We needed to be out, but we didn’t have a new place to move into.
It shouldn’t come as a surprise to read that this was a stressful time. Shelter is sort of a basic need, and we were suddenly without. It was tempting, and would have been easy to justify, to settle for a home that didn’t quite meet our needs, or was just outside of our budget. But when you’re dealing with the biggest line item in your budget, it’s best to not start the justification game.
Luckily for us this was all happening at the beginning of the summer, which gave us a bit more flexibility. With the kids being out of school at that time, it allowed my wife to take the them back to our home state for our annual pilgrimage to grandma and grandpa’s house. Normally those visits last anywhere from two to three weeks each summer; they’d just stay longer this time if they needed to.
The plan was for me to stay behind to work and to keep looking for our new place. The Extended Stay hotel would be my home until I could find a new place to rent; our possessions were packed into a storage unit.
It took a couple of weeks of searching, but finally, late one night from the comfort of my hotel room, I found something that looked promising:
- Four bedrooms? Check
- Fenced back yard? Check
- Great school district? Check
- Reasonable distance to work? Check
- Within our budget? Double check
- Available? Yes!
Each time we’d found a listing like this, it was gone by the time we could get around to viewing it. But luckily I happened to be online at the exact time this listing was posted. After confirming that it met all of our needs, I immediately called and scheduled a viewing for the next morning. I was going to be the first person to have a crack at this place.
I showed up early to scout out the neighborhood a bit. So far, so good. It was within walking distance of a neat park with a rock climbing wall, a bike track, playground, basketball court, zip lines. There also appeared to be a lot of kids in the neighborhood (another ‘want’ on our wish list). When I finally got to see inside the home I began texting pictures to my wife of each room I walked through. After I’d seen the entire home I asked the homeowner for a few minutes to look things over and to call my wife. Although she’d never stepped foot in the home, and even though we didn’t love the place, my wife agreed that it was probably going to have to work and gave me the go ahead to pull the trigger if I felt good about it.
This was the first time in nearly three months that we’d found a home that met all of our needs and was still available. And best of all, it was priced very well – far below what similar homes had been flying off the market for. So I hung up with my wife and told the landlord that we’d take it. I literally told him to “cancel the rest of your appointments, I’ll take it right now … for $100 less per month than you’re asking.“
In a scorching-hot housing market, that was probably a Stupid thing for me to do. The house fit all of our needs. I didn’t have a good fallback position. The home was already priced low and I guarantee someone else would have paid him full price, but it’s in my nature to negotiate – I had to ask.
Although he didn’t have to accept my offer, he did – and he hasn’t raised our rent since that day.
$2,100 per month for 48 months is what I will have ended up paying when my current lease expires late next summer. During this same time frame, the average rent in our area has shot up by 30% according to RentJungle. Had the home I’m currently in kept up with that average, I’d be paying $2,730 per month right now. A quick double check of comparable homes in my neighborhood that are listed for rent right now confirms this number, which means that my landlord could raise my rent by $700 per month and I wouldn’t be able to find a better deal.
Earlier I said that I was saving between $16,000 and $52,000 … that’s what you really want to know about, right? Okay, enough with the backstory, here’s how I’m coming up with these numbers that I’m tossing around.
THE HOW WE’LL SAVE $52,000 SCENARIO
So, $52,000 bucks in savings, huh? That’s a lot of money and I’m sure you’re wondering how I’ll manage to save this amount in just four short years. Here’s how: I shopped around.
Had we stayed put in our last home, the rent would have gone up by ~10% per year. A 10% annual increase is in-line with market prices, and that landlord had already shown he was going to raise the rent to keep up with market rates. Had we stayed put and not gone through the trouble of finding a better deal, life might have been easier, and we wouldn’t have been technically homeless for a while, but we also would have paid out more than $52,000 over the next four years. Here’s the breakdown:
|Year||Rent I would have paid
||Actual Rent||Monthly Savings||Annual Savings|
|2013 – 2014
||$ 2,750||$ 2,100||$ 650||$ 7,800|
|2014 – 2015
||$ 3,025||$ 2,100||$ 925||$ 11,100|
|2015 – 2016
||$ 3,328||$ 2,100||$ 1,228||$ 14,730|
|2016 – 2017
||$ 3,660||$ 2,100||$ 1,560||$ 18,723|
|Total savings realized by 9/30/2017:||$ 52,353|
By NOT staying put and taking the easy, convenient path, I was able to find a home that has been, on average, cheaper by nearly $1,100 per month! Put that in your pipe and smoke it! Better yet, put that in your bank and save it!
THE HOW WE’LL SAVE $16,000 SCENARIO
$16,000 might be a more digestible and believable number for many of you. Here’s how I’m coming up with this number:
The rent I was paying when I moved into my current home back in 2013 was $2,100 per month; the same amount I’ll be paying over the next year. Had our current home followed the market rates, it WOULD have gone up by ~10% per year. But it hasn’t gone up a single penny. To get to $16,000 I’m claiming the difference between my actual rent and the current market price as my savings. When running the numbers this way, my savings (as of the Summer of 2017) will be $16,153.
|Year||Monthly Rent||Market Rate||Monthly Savings||Annual Savings|
|2013 – 2014
||$ 2,100||$ 2,100||n.a.|| n.a.
|2014 – 2015
||$ 2,100||$ 2,310||$ 210||$ 2,520|
|2015 – 2016
||$ 2,100||$ 2,541||$ 441||$ 5,292|
|2016 – 2017
||$ 2,100||$ 2,795||$ 695||$ 8,341|
|Total savings realized by 9/30/2017:||$ 16,153|
So how can I claim this as savings? Because I believe it has remained unchanged simply because we are good tenants. Our rent remains the same because of things we do (and don’t do). Below is what I’ve done over the past three years to prove to my landlord that it’s better to keep my rent as-is, rather than raise the rent and run the risk of losing us, having his home sit unoccupied, or worse, getting a deadbeat tenant as a renter.
ON BEING A GOOD TENANT
Last week as I was signing our new lease my landlord thanked me for being “such a good renter.” He told me he was happy to have us in the home and he even gave me gifts to take home to each of my kids.
As far as renters go, I agree with my landlord: we are pretty good. I don’t call my landlord for every little thing and I pay on time. I also keep the house looking nice, so if he ever does a random drive by, he’d have nothing to be worried about because I pretty much treat the home as if it were my own. Over the years, we’ve spoken very few times.
But one of the benefits of renting is that you don’t have to deal with the potentially costly upkeep that goes along with home ownership, right? Whenever anything goes wrong, you get to call the landlord and (s)he gets to deal with the problem, right? Am I giving that up just to be a “good renter?”
I don’t think so.
Since moving into our home we’ve had to have the dishwasher, stove, garbage disposal, and microwave replaced. I’ve definitely called him about those issues, but I didn’t just call my landlord out of the blue to say “hey, the stove is broken, can you get a new one out here ASAP.”
Instead, I take a different approach. For example, when the garbage disposal motor died, I let him know, but also offered to get a new one and install it myself. (If you’ve read this post, then you know I grew up working construction and am pretty handy around the house, which helps in being able to volunteer to do these jobs). I’d simply deduct the cost of the new disposal from my next month’s rent.
I’m not sure how much a plumber charges these days, but I imagine the cost of a plumber coming out, inspecting the current disposal, determining that it is indeed shot, driving to the store to get a new one, coming back and installing it can’t be cheap. By doing all of the leg work up front, and by doing the installation myself, his total bill was less than $75 bucks.
When the dishwasher bit the dust, I definitely let our landlord know, but I was also flexible enough to allow him to shop around for a good deal on a new appliance. This meant we did dishes by hand for a couple of weeks. Inconvenient? Maybe, but also not a big deal. Our flexibility earned us a great deal of trust with the homeowner.
Same type of story when the wooden fence in our back yard got destroyed in a recent windstorm. I took a look at the damage and noticed that many of the posts had rotted out, which allowed parts of the fence to collapse under a strong wind. When the homeowner came out to take a look for himself, I offered to fix the whole thing if he was willing to deduct the cost of the lumber from my rent. He couldn’t say yes fast enough.
For less than $200 I fixed the damaged portions of the fence. It took me most of a Saturday to get the job done, but it was a good chance for me to bust out my DeWALT power tools and do some work with my wife and our oldest son. Together we removed the rotten wood, replaced it with new, treated lumber, put it all pack together and painted it up. Good as new. Having a contractor come out to do that same work would have cost my landlord a heck of a lot more than $200.
A few other instances like the fence and the disposal and the dishwasher have happened over the past three years. Each time, I offer to do what I can which usually ends up saving my landlord a few bucks, but it also builds up his trust level in me. He knows that he has a tenant that treats his investment as if it were my own, and I’ve got a landlord that doesn’t raise my rent. I think that’s a win-win.
So however you want to run the numbers above, I’m saving thousands of dollars just by being an observant and good renter. Little things like add up over time and are helping me Get Rich Quick’ish!
What things are you doing to get ahead? Do you think I’ve saved $16k or $52k…or something else? Or nothing at all? And what about you landlords out there … When what the last time you raised rent on your tenants? I know of one of you hasn’t raised rent on your tenant in 22 years (I’m looking forward to that blog post!).