Spending and Saving

Seven Ways to Shrink Your Housing Costs

The recession’s not over yet, folks. Jobs continue to be lost, money is still tight. So why are you still paying the same rent, mortgage, or storage fees?

One upside to the crisis is that cutting those costs may be easier than ever. In many parts of the country, landlords are willing to negotiate on rent. New federal policies have made it easier to refinance home loans. Here are seven ways to pay less—and most are even sacrifice-free.

Negotiate your rent

Rental prices are down around the country—in places like Los Angeles, Portland, Ore., and certainly here New York. (Though not, apparently, in Obamatown.) That means that landlords are more open to doing deals with good tenants. The Wall Street Journal has a useful template for a letter requesting a rent reduction, and BusinessWeek offers tips for negotiating with landlords, such as contacting them a couple of months before your lease is up. Don’t forget that you don’t just have to haggle on the monthly price—they can throw in utilities, free months, and other bonuses.

Move…
If you have a stubborn landlord, it might be worth it to pack up and go—maybe even to another city. We know an art advisor who recently left New York with her boyfriend to live in Portland. Needless to say, they have miles more space for much less money.

…and haggle on your new lease
In this market, you don’t have to take the price the landlord offers, especially if you are willing to be flexible on factors like the length of the lease. Request free months, see what happens if you agree to a two-year deal and, Bohemian Revolution advises, ask lots of questions about utility costs—they might offer to cover some them, without your even having to ask.

Refinance your mortgage
You’ve probably seen the president pushing refis on television, and it’s true that you can save substantially by refinancing at current low rates. The good news is, Obama’s housing package means you can get a government-backed loan even if you owe slightly more than your house is worth. The bad news is, fees are rising. SmartMoney explains what to look out for.

Challenge your property tax bill
We all think we take too big of a tax hit. But it’s possible that you actually are being overcharged if property values in your neighborhood have dropped dramatically in the past few years. Kilinger has a straightforward guide for making sure your assessed value is appropriate, and appealing for an adjustment.

Ditch the storage unit

Do you actually need your college textbooks, that beanbag chair, or flannel shirts from the early 90s? You can not only save money by clearing out your junk box, you might be able to make a little by selling anything in there that’s usable—or get a tax break for donating it. (Read about making money from closet castoffs.) If there are things you must keep, get creative with stashing them at home. I swear by SpaceBags, which make my winter wardrobe fit on one shelf. And if you just can’t let the self-storage unit go, Secondhand News has advice for keeping costs down, including asking for long-term discounts.

Run your own hotel
If you live in a desirable area, you can offset your costs by listing your home as a vacation rental for as little as one night or as long as several months. There are risks—among them theft and property damage—and paid guests might not be allowed under your lease. That said, we know several people who have done holiday rentals safely and profitably. Some have only let friends stay; others have gone online. HomeAway is one of the big listing sites; Craigslist sees a lot of this business, too. If you want more protection and less hassle, search for local brokers who will take care of the logistics for you.

If all else fails, you can pack up your pride and move back in with Mom. Your bunk bed is probably waiting.

Tags: budgets, mortgages, personal finance, real estate, spending