You might think one of the upsides to one of the worst housing crises in U.S. history would be that housing costs would decrease for most people. But, that's not necessarily the case. In 2010, four years after the housing crisis began, the price of the average home in the United States continued to fall, actually reaching new lows in major cities like Atlanta, Chicago and New York [source: Rushe]. Still, the number of U.S. households who paid more than they could afford for housing increased from 2008 to 2009 by 1.8 percent, possibly because of increases in unemployment and other financial hardships [source: Wardrip]. But with such a bleak economic picture, finding affordable housing can still seem daunting. However there is good news: There are still some creative ways you can save money on the cost of putting a roof over your head. Read on to find some solutions for finding cheaper housing.
Look in Other Neighborhoods/Cities
Whether you're renting or buying, you're going to be able to find cheaper housing in less popular neighborhoods [source: Pendola]. So be ready to shop around. Hot neighborhoods like the Mission in San Francisco and the Village in Manhattan should get crossed off the cheap housing list. Instead, try more affordable areas like Fresno or the outer boroughs of New York [source: Pendola].
You can also save huge amounts of money if you're willing to completely relocate. To say that Manhattan and Dubuque, Iowa have very different real estate markets and cost of living expenses is an understatement. Nationally, the South and the Midwest are the cheapest regions to live; the average home price in the South is $147,000 and it's $132,000 in the Midwest. Compare those to $236,000 for an average home in New England, and $238,000 for the average West Coast home, and the savings can be big [source: O'Malley].
If you're truly brave, you can follow the lead of some urban pioneers and move to extremely economic depressed areas like inner-city Detroit. The Motor City, where it wasn't difficult to find a house for hundreds of dollars after the 2006 housing crisis, has attracted students and young people looking for cheap places to pursue careers in the arts [source: Hodges]. If you're looking for an extremely inexpensive city without the depressed economy and high crime rate, try Manchester, N.H., which "Forbes" ranked as the best cheap city in a 2009 survey [source: O'Malley].
Know Your Budget
Making a detailed budget plan can help you figure out what you can afford in terms of housing costs. It can also help you make educated decisions about what you might need to cut back on to accommodate higher rent or mortgage payments [source: Hoak]. Financial advisers recommend that you divide your monthly post-tax income into percentages according to how much you plan to spend. Take into account all expenses, including food, transportation, utilities, student loan payments, and deposits to savings or retirement accounts [source: Singletary]. According to experts, 20 to 35 percent of income spent for housing is a reasonable amount, with the sweet spot closer to 25 to 27 percent [source: Singletary]. The U.S. government defines housing as "affordable" if it costs a resident no more than 30 percent of after tax income [source: Singletary]. Spend much more than that and it can be difficult to afford other necessities, save money and of course, have fun. But according to a 2007 survey, more than 60 percent of Americans spent more than 30 percent on housing costs [source: Hoak].
Avoid any housing options that exceed the budget you can afford. There is room for flexibility, however. For example, if you live closer to work, you might be able to afford to pay more in housing costs, since you'll be paying less in transportation costs [source: Mint.com]. Or if you pay a rent that includes some or all of your utilities, you can take that into consideration, too.
Sometimes, you can find surprisingly good deals that you would not have found otherwise, simply by using your networking skills [source: Pendola]. Tell everybody that you are looking for a new place: friends, neighbors, coworkers and family. It could be that your cubicle neighbor knows someone who is moving out of a great, affordable house. Maybe a friend of yours just heard about a new vacancy in their apartment building, and the landlord hasn't even had time to put up a listing or an ad online. Going by word-of-mouth can also save you money on expenses like broker fees [source: NYC Affordable Housing Resource Center]. Make your friends work for you, and no one else will have to.
Apply for Section 8
If your family is operating on a low income, you might qualify for low-income housing assistance programs like Section 8. Section 8 (also known as the housing choice voucher program) is a federally funded program administered by state housing authorities. It offers rent and mortgage assistance in the form of vouchers. To qualify as low income under the program, your family's income has to fall below 50 percent of the median income of the county where you live [source: U.S. Department of Housing and Urban Development]. The amount the vouchers will pay is based on the federal affordable housing threshold, which is 30 percent of a family's post-tax income [source: Affordable Housing Online]. When you receive vouchers, you pay all rent up to 30 percent of your monthly income, and the federal funding covers the rest. Vouchers are also portable, so once you qualify, you can use them in other parts of the country.
Unfortunately, the housing crisis and the recession economy have substantially increased demand for affordable housing benefits. So, it's possible that, depending on the demand in your particular city, you could be put on a waiting list -- and they can be extremely long. In some areas, applicants have to wait several years to apply [source: Affordable Housing Online]. In 2010, a riot nearly broke out in East Point, Ga., (a city just outside of Atlanta) when 30,000 applicants gathered to apply for Section 8 housing from the East Point Housing Authority [source: Schneider]. Applications had been closed in the city for eight years [source: Schneider].
Find a Roommate You Can Trust
It's simple math. Divide the cost of a house or apartment by two and you can end up spending significantly less money. Finding a roommate (or multiple roommates) to share your living arrangements and defray the costs can be a win-win situation. But, make sure you take the time to find a reliable person to share your digs. Otherwise, you could end up paying low rent for an unbearable living situation. Even worse, you could end up stuck with rent and bills you can't afford if the roommate decides to skip out on you.
To find a reliable roommate, ask friends and colleagues to see if they know someone looking or know who can vouch for someone's reliability [source: Apartment Guide]. If you use an online service like Craigslist, make sure you meet them first and ask them for references you can call [source: Fulmer]. Meet with potential candidates first to discuss your expectations for the living arrangement. Once you've found a good match, think about writing up a roommate agreement, a document that lists each person's share of the rent, expenses and any security deposits [source: ForRent.com]. If you both sign it, it can protect both parties in the event of a disagreement.
Finally, consider whether or not you want your roommate to sign the lease. If you and your roommate both sign, it will protect you if they end up breaking the agreement. Being the only one to sign gives you more control, but also more financial responsibility for making the full amount of rent if the arrangement doesn't work out [source: Fulmer].
Go Through a Local Affordable Housing Authority
State and local housing authorities and local non-profit housing services can help you find affordable housing options. These organizations have a local, community-oriented mandate, so their specific programs will vary based on where you are in the country. They might target a particular city, state or neighborhood. Often, they offer help only to low- or moderate-income individuals and families. Their services might include low-interest loans, broker services to help you find affordable housing locations, or financial counseling to help you with budgeting [source: Los Angeles Neighborhood Housing Services]. But, just like the Section 8 low-income housing program, there can be long waiting lists for many of these groups' programs, especially the ones that provide direct financial help [source: Atlanta Housing Authority].
Use a Referral Service or Broker
Using an apartment referral service, or an apartment broker, can help you find some choice listings that might otherwise not show up in your search for an affordable place. Apartment referral services basically collect information from you on what kind of apartment you want, considering price range, neighborhood, amenities and other factors [source: Bruce]. Property owners will sometimes give these services discount offers that they don't provide to the general public. The best part is that these services are usually free, since the property managers are footing the bill to bring in reliable tenants [source: Northwestern University].
However, some referral services do charge, especially in very competitive rental markets like New York City [source: NYC Affordable Housing Resource Center]. The down side is that, since property owners pay the brokers, the brokers might put their bosses' interests ahead of yours. For example, you might only see listings from property managers who have a close working relationship with the broker [source: Northwestern University].
Negotiate with the Landlord
A lot of renters don't realize that their monthly rents are not set in stone. Rent, just like the price of a house, is negotiable. Often, simply sitting down and negotiating with a landlord can score you a deal. Of course, you need to negotiate within reason. A landlord won't entertain an offer that is ridiculously lower than what they will be able to get from someone else. But, landlords would rather be collecting rent from someone than letting an apartment lie empty for a month or more [source: Vander Broek]. Understanding that can give you leverage in negotiations.
Make sure you negotiate from a position of strength by first researching rents in the area. You can ask neighbors, browse classifieds or talk to brokers to get that information [source: [source: Vander Broek]. Come in with a reasonable figure in mind. If you can, call the property manager's office and ask if they will tell you how many vacancies there are in the building or complex [source: Solomon]. The more openings, the more desperate the landlord will be to fill the empty units. It's also good to negotiate toward the end of the month when landlords will be more likely to offer a deal once they start to get wary about missing a full month's rent payment [source: Grant]. Finally, be prepared to make concessions of your own. Signing a longer lease can often get you a discount, since it offers the landlord stability. The same is true for offering to pay several months' rent up front [source: Solomon].
When you're looking for a place to live on a budget, making compromises on your idea of a dream home is going to be a necessity. Settling for fewer amenities, a smaller size and unconventional layout are some of the sacrifices that can save you serious money. For example, studio apartments will usually be cheaper than larger multiple-bedroom apartments [source: Pendola]. A basement apartment in a landlord's house will usually cost less than a unit in a larger apartment building. You can also consider compromising on amenities like appliances and on-site concierge services, which drive up the prices of apartments considerably [source: Toy]. If you've been looking at historical buildings with impressive architecture, try toning those expectations down. A new construction with a plainer look might not be as exciting, but it will keep costs down [source: Pendola].
Become a Property Caretaker
Especially if you have some level of flexibility in your career and family life, you might consider becoming a property caretaker. People with vacation homes, those who travel frequently or someone with a large family estate frequently hire caretakers to live on and look after their properties. Obviously, becoming a caretaker requires moving around frequently, since often assignments are short term or seasonal. But, caretakers often live rent free, or at least pay very little for rent [source: Freedman]. Since people who can afford to pay caretakers are usually well off financially, the accommodations can be pretty impressive [source: Freedman]. Imagine spending your days living in a millionaire's beach house, or on a quiet country estate with acres and acres of land. On the down side, you might have to do a little singing for your supper. Usually, caretakers have some other type of work they need to do along with living in the house, like yard work, repairs, or taking care of pets or livestock [source: Freedman].
The even more adventurous might consider "workamping," a more outdoor-oriented version of caretaking that involves taking care of fair grounds, parks or amusement parks during the off season. But those who don't like to rough it need not apply. Workampers usually camp during their assignments, either in an RV or on a designated campground [source: Workamper News].
If you own a home, you most likely have homeowners insurance, but how sure are you about what is and isn't covered? HowStuffWorks takes a look.
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