How to Live for Free: 5 Ways to Eliminate Rent & Mortgage Payments

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For most people, housing is the number one expense they face. While it may seem like this “is what it is,” it turns out there are ways to meaningfully reduce housing costs. While some strategies are easier than others, it’s worth exploring to see if there are ways to cut your single largest expense item. I want to show you how to live for free with five creative ideas to reduce or eliminate your housing costs.  

Why Try to Live for Free

While it varies from person to person, it is not uncommon to spend 30% of your income on housing-related expenses. Whether you’re trying to reach financial independence or are simply looking for ways to cut back your expenses, you should at least consider cutting your biggest expense:  housing.

The strategies I will share with you today can help you do exactly that. 

Now, before we jump in, I want to tell you what I won’t be covering. You may read other articles that say you should become an au pair or move in with your parents or trade your time for housing. Sorry, I won’t be covering those ideas. No, instead, I will assume you do not want to change careers just to save on housing.

Instead, I will give you tips you can start implementing relatively quickly without changing around your entire life. So, without further ado, let’s dive into our first idea on how to live for free.

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1) Offer a Room as a Short-Term Rental

This first tip is easy to implement if you can get over the psychological hurdle of having someone in your home. If you have a spare bedroom in your house, rent it out on a service like Airbnb.

While this may not cover your entire housing cost, it can certainly make a dent. Assume for a minute that your monthly mortgage payment is $1,000. Then, assume that you have one spare bedroom to rent out for $50 per night. 

If you rent that room out just once per week, four nights per month, you will have earned $200 against your housing cost. In this example, you will slash your housing costs by 20%!

I won’t speak for you, but cutting my housing costs by 20% seems pretty awesome.

I am the first to admit that I have not used this strategy, but I have stayed with hosts through Airbnb and have had great experiences. If you’re open to the idea, it’s worth exploring.

2) Find a Roommate 

Now perhaps you don’t like the idea of having a revolving door into your home. I get that. However, would you instead consider a roommate?

While I know everyone has roommate horror stories, having a roommate can be a lot of fun, and it’s a great way to save money.

Let’s assume you have a two-bedroom apartment that costs $1,500 per month. What if you decided to rent out that extra room for $800 – $900 per month?

Now, instead of paying $1,500 per month, you’d be paying $600 – $700 per month. While this doesn’t offset your total cost of housing, it can save you a small fortune. 

3) Rent to Sublet

At this point, maybe you think that you don’t want to share your home with anyone. And that’s okay! 

This next tip is all about rental arbitrage. 

Assume you sign up to rent an apartment, but life circumstances dictate that you need to move elsewhere. Now you’re on the hook for rent for a place you don’t want. What are you to do?

Sublet your place! 

Subletting has become increasingly common. In fact, some manage to do so at a profit. 

Here’s how it works. You rent an apartment for below-market rent and then turn around and sublet it to someone else at a profit. While it isn’t always easy to find below-market rent, this can be a lucrative side hustle to help offset some of the cost of your housing.

If you plan to sublet, make sure you carefully check the lease provisions to see if it is allowed and what restrictions may exist. 

4) House Hacking

This next tip is what I consider to be the absolute best wealth-building tool when it comes to housing. If you want to know how to live for free, offsetting 100% of your housing cost, this is it.

House hacking is a strategy whereby you purchase a property, often a multi-family home, and live in one unit and rent out the rest. 

For example, imagine that you buy a duplex (a house with two units). You can then live in one unit and rent out the other unit, using the rent from that unit to offset your unit’s costs.

For example, assume you buy a duplex for $200,000 and finance 80% at a 3.0% interest rate. In this example, the monthly mortgage payment would be around $957 per month. 

If you can rent out one of the units for $1,000 per month, living in the other, your mortgage payment is more than covered, and now all you have left to pay for is taxes, maintenance, insurance, etc. 

Using house hacking as a wealth-building strategy, it’s possible to lower your living expenses by hundreds, if not thousands, per month.


5) Move or Travel Full-Time

Finally, I want to introduce a concept called geographic arbitrage. Certain cities are less expensive than others. While you may not live for free, per se, it is possible to sell your house and either move somewhere with a lower cost of living or travel full-time.

Here’s what I mean. If the COVID crisis has taught us anything, it’s that the vast majority of people can successfully work remotely. If you can arrange a remote work agreement and remain in your current job, you can move somewhere with a lower cost of living, reducing your housing cost.

However, it’s possible to take this one step further. Some people choose to work abroad in places where the cost of living is much lower.

Take Southeast Asia, for example. It’s entirely possible to find a place for $15 – $20 per night (sometimes less). If all you need to do your work is an internet connection, it’s possible to travel full-time, never needing to lock into an expensive apartment or mortgage.

How to Live for Free:  5 Ways to Eliminate Rent & Mortgage Payments

When deciding how to live for free, there are many different pathways depending on your personal goals and the sacrifices you are willing to make.

If you decide this is a path you want to go down, just make sure to consider things like adequate insurance (if you’re renting out your place), tax obligations, rules in the lease, etc.

However, it is possible to lower your housing costs dramatically. If you want to learn how to live for free, below are my top five ideas to explore further:

  1. Offer a Room as a Short-Term Rental
  2. Find a Roommate 
  3. Rent to Sublet
  4. House Hacking
  5. Move or Travel Full-Time

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