How to live for free… Or at least a lot less.

Unless you’ve got a high paying job it can seem almost impossible to save any money these days. Whether it's rent, groceries, or gas - nothing is cheap and it sure doesn’t seem like it's getting any cheaper.

Now I’m sure we’ve all been told to stop spending money on avocado toast or lattes, just be smart with your money, or some other “magical” tip that is supposed to help. Well in my opinion, you can’t save your way out of a situation where all of your bills are increasing, and saving a few dollars here and there on a latte isn’t going to make the biggest change either. And sometimes the joy from a good latte is so worth it, so why cut that out?

I propose another solution. People’s number one expense across the board is typically housing. It can demand a significant portion of people's overall budgets every month. Obviously location and type of housing can vary significantly across Edmonton, and everyone has a different preference. Let's just say you’re living near Whyte Ave because you love being close to the restaurants and all of the action, and you’re in a building overlooking the river valley. Let's say it’s a 1 bedroom and you live there alone paying $1300 a month. That is totally normal and most people wouldn’t think twice.

Here is another option: What if you purchased a home in Queen Alexandra for $400,000 with 4 bedrooms? If you put down a $20,000 downpayment and had a mortgage at a 5% interest rate your expenses may look roughly like this:

Mortgage - $2300 / month

Property tax - $275 / month

Insurance - $100 / month

= $2675

That would be the cost for you to own that home. Now imagine if you rented out the other bedrooms at $700 each to your friends, which is pretty reasonable. At 3 bedrooms that brings in $2100 / month to offset your costs leaving you to only pay $575.

($2675 - $2100 = $575)

And if you split utilities 4 ways that also helps reduce your overall costs… So to recap, before you were paying $1300 in rent for an apartment, and now you’re paying $575 to own a house in a great Edmonton neighborhood! You don’t have your river view unfortunately (there are some compromises), but you’re still close to all the restaurants and action of Whyte Ave. You’d be saving $725 a month in housing expenses - that’s a lot of lattes you’d have to cut out to save that kind of money.

I realize this isn’t a feasible situation for everyone, you may have kids, you may just not want roommates at this point in your life, and that's totally ok. It’s the concept and recognizing that the power of real estate can really benefit you financially when done right. Let's say you can’t stand the idea of people being in your space, then maybe a home with a basement suite is a better option? Or maybe a fourplex? Also it’s important to recognize that this is just one example, depending on the situation the numbers may be worse, or you may be living for free.

What do people typically want in their life? For many people health, freedom, time for friends and family, and to be financially stable checks a lot of the boxes. Real estate has the power to help you financially if you’re willing to figure it out. This in turn can help you work less and give you more time to focus on everything else that really matters.