While this is part 2 of the series, part 1 was a very brief introduction to what you could have guessed from the title. I’m imagining a FIRE community. A place designed to allow people to be financially independent as early as possible. It certainly won’t be for everyone, but it could be ideal place for many in the FIRE community.
Today, I’d like to explore the characteristics of housing in my ideal FIRE community. Housing is a natural place to start. Most people spend roughly 1/3 of their income on housing. If the average work career is around 45 years, everyone can retire in only 30 years if we just give them free houses.
Hmmm, in the off-chance that my free houses for everyone plan doesn’t work let’s come up with a plan B… cheap houses!
What’s the Cheapest House You’d Want to Live In?
That’s the question we have to answer. Unfortunately, most people will have a variety of different answers. My hope is that those who are focused on FIRE are willing to have more flexibility than most people when it comes to this very big expense. Let’s explore what characteristics some of these cheap houses might have.
1. Tiny Houses
Perhaps the best way to save money on housing is to have a little house. Not only are small houses cheaper to build, but they are cheaper to heat and cool. They also fill up faster which means less stuff to buy. You can’t hoard tons of Beanie Babies (or whatever your collectible of choice is) if you have no place to put stuff.
Here are some examples of bloggers who have talked about their tiny house lifestyle:
- Two Cup House – A whole blog built around tiny house FIRE. Here’s the story of their tiny house.
- Think Save Retire – They travel in an Airstream vehicle as their home. It’s hard to imagine tinier living than that.
- Retire by 40 – Joe used to live in a sub-1000 sq. foot place (if I remember correctly from his blog), but now is in a bigger place, but not super big.
Personally, we live in an 1800 sq. foot home. I can be on the small size at times, but it’s not too bad.
In this community we’ll have places of different sizes, but nothing that would qualify as a McMansion. To help make the smaller house sizes work we’ll have an onsite self storage bin.
2. New Planning
One of the benefits of starting from scratch is that we wouldn’t have to support house design of decades or centuries old. There’s a lot of research going on to make cheap, quality houses. For example, this 20K House Project has be around for years. These designs are an amazing rabbit hole to explore.
While most of the 20K houses are also tiny houses, we can use elements of the design in any size house. Of course, we’ll include elements like solar panels to mostly eliminate electricity bills. We’ll also have rain water barrels and things like that.
3. New Processes
In that 20K project, they put a specific focus into keeping home builders in jobs. They mentioned that they could have saved money using “pre-fab” parts. I like home building jobs, but I’m fine using pre-fab parts. I don’t think we’ll be building enough homes to make a big dent in the home building job market.
We can even explore 3D printing for houses. I haven’t done much research on this, but it seems that making a 3D printed house cost between $4000 and $10,000.
Adding it all up
I think some of these housing estimates are a little extreme. I don’t really think we’re going to 3-D print houses for $10,000. If we can, that’s fine, but I’d like to budget quite a bit more. I’d like to think that we could do some pretty amazing things with $50,000.
Of course, we’ll have to cover the cost of land as well. That will vary tremendously depending on where the community is. That’s a discussion for another day. We’ll definitely not be choosing Silicon Valley for our location.
If we can limit our total costs of housing to $70,000 on average, I think we’ll keep either rents or mortgages sufficiently low. For example, a 30-year mortgage could be just a few hundred dollars. Working on this one thing alone could allow everyone in the community to retire 10-15 earlier than normal.