Why A Studio Is The Perfect Starter Home If You Want A Short Commute

On this final post of this series, I am going to use a conversation I had with a younger friend who was moving out. I will call my friend “B” . Read part 1 and part 2 on factors to consider when thinking about moving out.

B: I’m planing to move out from my mum’s house, it’s become untenable, so I’m wondering how much I should be spending on rent. I’m getting conflicting information on how much I should be spending. Also your opinion on the size of the place would be appreciated.

K: There are no “shoulds” when it comes to personal finance, I think it is all up to your life situation and context. e.g. you could choose to spend little, but then pay more in transport and commute time (which is also a cost). The house you choose to live in also depends on how much you can afford, versus your other financial goals. On size, a studio apartment (bedsitter) or a 1 bedroom apartment are alright for your first home. What are your considerations? Distance?

B: I’m wondering what best practices are. I’m looking for something close to the office. My current commute is exhausting and draining. I also want a solution that won’t cost me too much. 

K: The standard is to spend 30% max on rent, some people advice that not more than 20% should go to rent, but it is all very personal. For most of us, it is impossible to spend less than 20% on rent, because our salaries are not much and the houses are expensive. Some people also  want to spend a bit more on rent, to shorten their commute time so they have time to do other projects that are fulfilling or could result in higher income in future. In your shoes, I would consider living a walking distance from the office, to save on both time, and expense. How much can you spare for rent, without compromising on your standard of living and savings goals?

B: At the moment, I can spare 20k a month. The houses I am getting at that level are also far from work, so wondering what my options could be. 

K: My advice would be you consider starting with a studio apartment close to the office. I know many people despise studio apartments, but most of us start off in a studio They’re small but most have enough space for one person, and at 20k, you should be able to get a studio close to where you work. That’s the other thing about personal finance, the decisions you make are personal, so ignore social pressure to rent a big, expensive house you do not need. 

The other option is to consider house sharing. Many people do not favor it, but I have found it works well if it is structured. A few tips:

• Have a sub letting agreement with your house mates. This should be an agreement just like the lease you will have signed with your landlord, but with an additional annex of house rules that you will have agreed on. The lease should include 2 months rent deposit from each housemate, in case they’re unable to pay rent.
• Outsource sensitive items. Do not clean the house yourselves, this is a recipe for falling out. Get a cleaning lady who cleans the house, dishes, clothes etc daily. This solves over 50% of the issues house mates have with each other.
• Consider hiring someone to cook too. If you are friends a shared groceries bill could work. If not, you can have separate cabinets in the kitchen. No judgement there.
• Individualize entertainment by either having individual TVs in your bedrooms, or going for a strong enough internet connection that allows all of you to stream entertainment and not have to compete for one screen in the living room.
• Have rules on visitors. Some housemates will agree that girlfriends/boyfriends can stay over maximum 3 nights a week (or something), but friends are not allowed to stay over unless it is one off. See what works for you. Having a clear rule on this is key, because you don’t want your housemates cohabiting with their partners, or their friends living off you.
• Define what could get a housemate evicted and stick to the rules if it comes to that.

When it comes to house sharing, it is important to have a business-like arrangement, and sometimes you may find that strangers make better housemates than friends.

So there you have it. If a short commute is why you want to move out of home, and you are not willing to pay too much in rent, a studio/bedsitter or house sharing are your best bets.