In today`s post we`ll share the details of a travel hack: House sitting.
The On FI-Land Time blog has always been a combination of financial independence (FI) thoughts and lifestyle hacks, all with a travel focus. Just like Finding a Crewing Opportunity, house sitting is a strategy that blends FI, lifestyle hacking, and travel into one powerful strategy.
For most individuals and families, there are three types of expenses that make up the lion`s share of their monthly spending. These three biggest expense types for Canadian households are1: housing (29.3% of spending), transportation (18.5% of spending), and food (14.9% of spending). We already know that reducing expenses is the quickest way to accelerate a person toward financial independence. This is because not only does permanently reducing a recurring expense allows you to save and invest more today, it also significantly reduces the amount of money you need to save in order to become financially independent and cover your expenses going forward.
As an example of this, by reducing an expense by $100 per month (perhaps by cancelling your cable subscription...which also bombards you with advertisements to buy more "stuff"), you are reducing the amount you need to save by $30,000. I`m going to rephrase and repeat this so that it sinks in. For every $100/month that you reduce your spending, you're also reducing your savings needs by $30,000. Here's why.
A commonly quoted "rule of thumb" principle in the Financial Independence world is the 4% rule, that in simple terms means that in retirement you can safely spend about 4% of your savings annually (with the basic assumption that your savings are invested in a diverse portfolio of stocks and bonds), and still be relatively certain that you won't go broke over a period of 30 years. If we were to follow the logic of the 4% rule, using our $100 per month expense (an annual expense of $1,200 per year), we do the math and see that $1,200 is 4% of $30,000. Voila. I will note that there has been much debate about the 4% rule for early retirees and under certain retirement conditions like during times of high stock market valuations. But for the purposes of this post, the 4% rule works well. If we were to look at a safer withdrawal rate of only 3%, then my point is even more clear, because $1,200 not spent is 3% of $40,000 not having to be saved.
Back to the big three expenses of housing, transportation, and food. Of the three, housing is by far the biggest one for most Canadian families at 29.3% (in 2019). With an average total household spending of $68,980, this equates to about $20,200 per year, or $1,683 per month.
What if you could eliminate this expense entirely? Well, for starters, if you've not yet reached financial independence then that's an additional $1,683 per month that you can invest and use to grow your portfolio. If you happen to be financially independent already and are relying on your savings and investment income to fund your lifestyle, then that's $1,683 per month that you don't have to withdraw from your portfolio.
This is what we have been doing for the last year. We've almost totally eliminated our housing expense and have thus reduced our need to draw down our savings and reduce our future earning potential. Over the last few months, house sitting is the method that we are using to do this, while at the same time travelling, exploring new places, and having new experiences.
But what do I mean by house sitting? House sitting is where an individual or a couple looks after a house (or rural property), and looks after any pets in the home while the owner is away.
Most people think that house sitting is only for people who already know each other. After all, why would someone bring in a stranger to look after their house and pets? That's a great question. Let's put ourselves into the shoes of a homeowner and pet owner. You as the homeowner want to take a long vacation or trip but aren't able to bring your plants or animals with you. You only have a few options.
First, if you have good friends, family, or neighbours nearby who are willing to check in on your house and care for your pet during a short trip, then you may choose to ask them for help. But for longer and recurring trips you really don't want to abuse your friendships in this way too often.
Your second option is that you could bring your pets to boarding shelters or kennels. I consider these a last resort for a few reasons. Kennels are often noisy, smelly, stressful places for pets, and each pet doesn't get a whole lot of individual care. Also kennels can be expensive, with $30-$50 per day for a dog being pretty standard (plus extra cost if you want your dog to be given exercise or if it has other special needs). This amount can really add up if you have multiple pets or are planning to go on a longer trip.
A third option is house sitting. You could bring someone into your vacant house and care for your house and pets while you are away. By doing this you're allowing your pets to stay in their normal comfortable environment. Your pets get more individualized care from a dedicated care-giver. If you have dogs, they will usually get exercised daily. Your plants will be watered, if you have any. And, it costs you almost nothing.
Enter The Internet. There are several sites that have grown up to match house sitters with homeowners seeking sitters. One site that we've come to know and use as house sitters is www.TrustedHousesitters.com2.
As house sitters we get a free place to stay in an area that we are interested in exploring, in exchange for the expectation of caring for the house and pets. Depending on the pets, this can be more or less work. On one end of the spectrum, the house may just have a cat, but on the other end of the spectrum, like where we are now, there are horses and chickens, a dog, cats, and other things to attend to on the rural property. These arrangements are not paid. In fact, in order to register on TrustedHouseitters.com a prospective house sitter actually needs to pay a subscription to post a profile and communicate with home owners. This currently runs about $169 CAD for an annual "Basic" house sitter subscription. For us this subscription cost was worthwhile because we had an interest in spending more time in Western Canada waiting for the snow to melt before heading east to visit family, and by doing house sits we would easily save about $1,000 per week compared to hotel or other temporary accommodation, while at the same time getting some new experiences (farming) and enjoying the company of some pets. As I write this we are on our third consecutive house sit covering the entire months of February, March, April, and half of May 2022. Based on the average Canadian monthly household housing expense of $1,643 mentioned above, that's equivalent to over $5,500 in savings.
"BUT WAIT" you may object, "that's all fine for you Kevin and Jeannine who don't have a house or full time job and have all the time in the world to go travelling. But what about for me? I have a house so I'll be paying for housing anyway!" True, our situation right now is ideal for taking advantage of this because we sold our house in 2021 and otherwise have no housing expense. But it can be a great travel hack for you too!
Perhaps you've been thinking of taking a vacation somewhere. Or a mini-sabbatical. Europe anyone? There are house sits all over the world. Even without creating a profile, you can scan the listings of posted house sit opportunities to see if there are any where you want to travel. As with everything in life, flexibility helps. The broader the region of interest, the more opportunities you'll find. The more flexible your travel dates, the more options you will have. How much do you think it would cost you to stay in a quaint village in the UK for a couple of weeks? Probably at least $100 per night. Now instead of paying thousands of dollars for accommodations for a couple of weeks vacation, you just pay the site membership fee and have unlimited stays all year long.
This is also a great strategy for a person with a job that can be done remotely. Don't need to be close to your place of work? Great! House sit all over the world and live for free! There are people who do this full-time, like this couple that was featured on CNN, https://www.cnn.com/travel/amp/couple-travel-the-world-house-sitting/index.html.
A word on trust. Friend or stranger, a homeowner leaving their home and pets with someone will want to be able to check out their prospective house sitters. The web site itself does this to some extent, with options such as identity verification, external references, background and criminal record checks, and links to other sites like AirBNB where good and bad reviews can influence the attractiveness of a potential sitter. We have also arranged a video meeting with any interested homeowners in advance of committing to a sit. Any sit needs to be a good fit not only for the homeowner but also for the sitter. At the end of any sit, the house sitter and the homeowner will have the opportunity to leave a review of their experience, which could then influence future sits.
What do you think? Is this something you might be able to take advantage of, either as a house sitter or as a homeowner using a house sitter next time you travel?
Interested in joining Trusted Housesitters and want a 25% discount on your membership? Click on our referral link here, which would also give us a couple of months of free membership. https://www.trustedhousesitters.com/refer/RAF502798/?utm_medium=refer-a-friend&utm_campaign=refer-a-friend&utm_source=copy-link
1 Statistics Canada, Graphic depicting 2019 Canadian Household Spending, (https://www150.statcan.gc.ca/n1/pub/11-627-m/11-627-m2021006-eng.htm)