Save and Make Money All in One Step

My post titled The 10 Most-Hated Money Saving Tips certainly got a lot of great comments. But there's one that stood out to me that I feel needed to be shared with everyone. It addresses my most-hated money saving idea -- moving to a lower cost-of-living city. The comment:

I can understand #1 being the most-hated. We met with a lot of skepticism when we did just that.

But, we researched and found a town (in the same country) that met our criteria and had a very low cost of living but most importantly, had ridiculously cheap real estate. For us, it was the low cost of entry into the real estate market that sold us on our location. I mean, less than the price of a decked out minivan low.

We purchased one house three years before we were ready to actually move out there and rented it out. A couple of years later, a second one. After we moved out here (5 months ago) we've bought 3 more and are currently closing on #6 and #7. The rental income from these places alone is enough to live modestly, so very soon, we'll have no need for a job. So much for the "not being able to find work in a small town" objection, eh?

Finding a place with inexpensive houses allows us to easily diversify, and our 7 houses combined still costs less (maybe even 1/2) of a home in Toronto. The risk to our portfolio is considerably lower than putting all our eggs in one house. We describe our thinking and our process in our blog WeLiveHereNow.net

Strategy #1 has worked very well for us, and everyone we talk to says they think it's great, but they could never do it. I guess that's just more houses for us, then! :)

So they not only saved a bundle of money, but now they're making money to boot -- enough so they don't have to have "regular" jobs in the near future. I'd say that's a pretty good combination!

Comments

[plonkee]

Hmmm. I like the idea in principal, but I would struggle to find a city in the UK that was significantly cheaper than the one I currently live in. I certainly wouldn't find one where I could afford to buy several houses. Nice to hear someone's done well with this idea though.

[The Saving Freak]

Living in South Carolina I know that this works in large portions of the Southeast. In our area we can purchase a small 2 or 3 bedroom house for less than 40k and have it be in reasonable shape. You can purchase a fixer upper for around 15k. We are now saving money just to purchase houses for rental income. We plan on putting atleast 50% down if not pay for the whole house with cash. Not to mention we got our 2300 sq ft house for only 140k on an acre of land. BTW it does snow here. Once a year

[paul]

I also like the idea of investing in real estate, and I'm looking into it for the future. However, I'm not sure I'd call owning 7 houses in the same town diversified.