What would you do if you could live rent-free for a year?

[amastewa93]

My fiancee and I may have to the opportunity to live rent-free for a year if he chooses to take a position in Atlanta. Currently, we pay $1,400 a month in rent in Charlotte. Not only would the move mean him having his DREAM job... but financially, we could really make a HUGE difference by not having a rent payment (by either paying off debt or saving more).

That being said, what would you do if you could live rent-free for a year?

[bjl584]

A coworker of mine recently moved out of his rental house and inherited his in-laws house. The place is fully paid for, so he now lives essentially rent free less utilities and property taxes.
His wife quickly found a way to spend the extra $1000 a month that they found themselves with.
So, in his case he did nothing different and is in the same spot financially that he always ways.
Most people would probably follow his lead if they found themselves in that situation.

Personally, if my mortgage disappeared tomorrow I would probably focus on paying off my student loans at a super accelerated rate. Beyond that, I'm not sure.

[kork13]

The way you phrased your question, you seem to be holding back a downside... But as stated, I don't see any reason NOT to jump on the opportunity. It's the job he wants, you'll be living rent-free, and you'll be able to pay down debts faster. Sounds great!

I'm guessing maybe this means living with relatives, perhaps one set of parents? If that's the case, it's fine to do that, as long as it's a healthy relationship, and you have an exit plan (only staying for 1 year to payoff debt & build up a down payment, then we're moving out). If there's coercion ("Look son, I found your dream job ready for you to take, just come home & live with us for a while and it's yours!"), or if either of you dislike who you'd be living with, no amount of free rent could get me to willingly enter such a situation.

[disneysteve]

We will be living "rent-free" in a few months when we pay off our mortgage.

I'm not really sure how to answer the question, though. What would I do if I could have been rent-free at some time year ago when I was starting out? I certainly would have taken a good hard look at the opportunity and tried my best to identify the pros and cons. If the pros outweighed the cons, sure, I probably would have done it.

I guess the question in your situation is what are the cons? You can live rent-free and he gets his dream job. What are the negatives? How does it affect your employment? Would you be far from family and friends? What happens after that first year?

[Joan.of.the.Arch]

Atlanta? Do you already have a car? My understanding is that Atlanta is one of those very spread out cities coupled with atrocious traffic, and that for the most part having a car is necessary. If you need to obtain, insure, operate, and maintain two cars that really needs to be factored in against the domicile savings. For me, having to drive long daily distances in heavy traffic might nix the deal. Hate it.

[riverwed070707]

Atlanta? Do you already have a car? My understanding is that Atlanta is one of those very spread out cities coupled with atrocious traffic, and that for the most part having a car is necessary. If you need to obtain, insure, operate, and maintain two cars that really needs to be factored in against the domicile savings. For me, having to drive long daily distances in heavy traffic might nix the deal. Hate it.

Ditto. I have a car, but commute time would be HUGE for me. I currently commute 8-10 minutes each way. Anything over 15 is a deal breaker. Whats on your cons list? Is it same pay or a promotion?

That said, if it were a dream job opportunity and I'd be saving $1,400/mo... same answer as any other "what would you do with $X" - I'd put it all in savings to go toward my FIRE goals.

[amastewa93]

Thanks for all the responses! To answer some of your questions...

1- The owner of the shop my other half will be running is paying relocation fees. The house is his, where he has offered to allow us to stay rent-free for a year while we get acclimated to the area. He really wants my fiancee to be there and plant roots in Atlanta. Also, it is possible that after one year we would have the option to buy the house from him as he has decided to spend more time abroad (which is why he needs someone running his shop).

2- We have two cars. One will be completely paid off next month (the beater that he will use to commute). I work remotely and there will be no change to my employment.

3- As far as "downsides" go... we were planning a wedding later this year that we've decided we won't do. Instead, we are going to get hitched at the courthouse with the immediate local family before we move to Atlanta. We may plan a reception in a year's time. Also, my grandmother and mom are here in Charlotte. I also grew up here, so so are most of our friends. However, those things are really small (to us) compared to the fresh start we will have and the way we will get to start married life together!

We will be visiting Atlanta this Sunday to make sure everything checks out. After that, we will be making plans to move in April.

[disneysteve]

Also, my grandmother and mom are here in Charlotte. I also grew up here, so so are most of our friends. However, those things are really small (to us)

I would just caution you to be careful about this. One of the biggest regrets people have when they relocate is the loss of their social circle and support structure. Make sure that as soon as you move and get settled, you make a targeted effort to build connections in the new area. If you are so inclined, a house of worship is one good way. Joining some other local groups or taking classes or a gym or volunteer work are all ways to connect. In current times where so much of our lives are spent online, it's harder and harder to meet people and make friends. Of course, it's also easier than ever to stay in touch with folks who aren't nearby but that's not the same as having friends to go out to dinner with or someone to go shopping with or whatever.

Good luck.

[kork13]

The clarification helps alot -- I see absolutely NOTHING wrong with your plans. In fact, I'm really excited for you, and I think you'll love it & do great. What section of Atlanta (just curious, I've got some friends there so I'm somewhat familiar)?

My recommendations:
- Pay off your debts ASAP. Up to you on how you do that, but you can either stop all savings (per the Dave Ramsey method, that would include retirement, house downpayment, etc.), or you can take it slower, and start saving for a downpayment (as I mention below).
- Either immediately or after you're 100% debt free, start paying yourself a house payment over the next year as your downpayment. Assume that you'll be buying this home next year -- figure out what your PITI payment will be, and start saving that right now. That'll help you to ensure that you can easily afford the mortgage, and it'll obviously put you in a good position for actually purchasing in the future.
- On a related note, you should aim for a 20% downpayment if possible to avoid PMI (not necessarily critical though). One option that would help with that would be to inquire with the owner if you could continue to rent the house for a period of time after the rent-free year, with the intention of buying later. You might even formalize the agreement, and draw up a lease which includes an option to buy with a specified price & timeline.
- DS makes a great point about the social aspect. Upon getting to Atlanta, work very intentionally at building up your social network in Atlanta (work, neighborhood, church, volunteerism, gyms/clubs, etc.). At the same time, plan out some periodic trips back home to Charlotte. It's only a 4 hour drive, and a mini-vacation (4-5 days) every few months going back home to see friends/family there would be something fun that you both can consistently look forward to.

[amastewa93]

The clarification helps alot -- I see absolutely NOTHING wrong with your plans. In fact, I'm really excited for you, and I think you'll love it & do great. What section of Atlanta (just curious, I've got some friends there so I'm somewhat familiar)?

I am quite excited as well - so, thank you! I'm thinking we will both save a bit and pay down debt at the same time. Your recommendation of a down payment for a home is a good one. We'd both love to own a home (especially for our pup haha).

Thankfully, once I get there one of my coworkers lives in the area. Although we both work remotely, we plan to get together when I first arrive! We will also plan occasional trips back to Charlotte and we will likely be back here for some of the holidays. I'll also be searching for a new book club when I get there... and we tend to meet other fun couples at dog parks when we take our puppers. I'm not super concerned about that aspect of things. We will also have a spare room so family/friends can visit with us as well, and some already plan to

The home we will be living in is located in Midtown, while the shop my other half will be running is located in Buckhead.

[Radshaw8]

wow that's nice. If someone allows us to live free for a year.

[cypher1]

In terms of being rent free for 12 months, my first response would be to max my 401K and travel more within that year.

However, everything comes at a price. For relocating to a completely new state for your partner's dream job is great but not without concerns. Since your career wouldn't be affected while working remotely, I agree with others on lack of family and social circle being additional factors to think about. If you're ok being away from your family and friends then it sounds like a no-brainer.

Otherwise based on your previous responses, I think you already know the answer to your question. It does sound like an awesome opportunity you both shouldn't pass up.

[creditcardfree]

One of the biggest regrets people have when they relocate is the loss of their social circle and support structure.

Agree. As a military family, we get to redo our circle of friends every three years or so. It's not easy, but it is possible and takes a little time.

[amastewa93]

Update: We visited the house and where he'd be working this weekend. The shop he would be running is only 4 miles from the house, so traffic shouldn't be terrible. Everything is perfect but we are now in a bit of a crunch to get things moving. They will be discussing dates tomorrow but he's looking at traveling down on the 20th and I'd follow shortly after the beginning of April. It'll be a busy few weeks but we are looking forward to this fresh start!!

BONUS: All utilities (minus WiFi) are included as well! And... the house has a fence for our pup and a screened-in front porch (which I've always loved haha).

I'll keep you all updated as to what we wind up doing money wise. This kind of thing could be life-changing for us simply because it gives us the chance to get ahead for the first time ever. Not to mention, we've been paying off/down debt for about a year now. We will have a car payment falling off right before the move, actually. So, I am excited to continue building our savings while we pay off our other items. (We will be focusing on snowballing debt after our taxes are taken care of).

[Joan.of.the.Arch]

Sounding good!