In many regions of North America, housing is very expensive. It is recommended that one spend no more than 30% of their income on housing. This includes mortgage or rent, interest, property taxes, strata fees, and heating costs. For many people, it can be a real challenge to reach that threshold.
If you live in an expensive city, you could be spending as much as half your income on housing. Statistics Canada reports that over 21% of BC residents spend 50% or more of their housing income. Ontario follows this at 20.9% and Nova Scotia at 19.7%. This is not unique to Canada, the America’s Housing Report 2020 from Harvard Joint Centre for Housing shows that one in four renters in America spend 50% of their income on housing.
Living with such a large financial burden from housing makes it nearly impossible to save or ‘get ahead.’ Companion living significantly reduces the cost of living for both homeowners and renters. This helps increase your financial independence, allowing you to spend money on things/activities/experiences you might not otherwise be able to afford.
Sharing housing is the most economical form of housing available, allowing you to live in luxury for bargain prices.
By sharing common areas, utilities, and other household expenses, one’s cost of living can be dramatically reduced. For comparison, most large and well-equipped shared homes cost less per person than living in a micro-apartment.
For comparison, if the price is the same, would you prefer:
Which would you prefer? How do you envision your lifestyle being different in each home? Would the home environment you chose to get you closer or further from reaching your lifestyle and health goals?
Do you already own a home that you would like to share with others? Providing a housing companion for your spare bedroom and sharing common areas can offset your homeownership costs and maintenance costs, perhaps even a little more! Possibly, the extra income will allow you to travel more or help others.
Depending on your location, surrounding amenities, and the quality of your home, a homeowner will typically receive from $500 to $1000 per month for each available bedroom. This can go a long way to help you achieve your financial goals.
Remain in your community of choice. Companion housing allows retired people who would otherwise not be able to afford to stay in their home a means to remain as long as they wish. Income earned from your spare bedrooms can offset housekeeping costs, care aides, or other supports to help you live in your home.
You may be able to deduct some reasonable expenses you incur to operate your companion home. The portion of housing expenses is usually determined by the percentage of square footage used by your companions.
Some of these include: Utilities, property taxes, strata fees, insurance, service fees, maintenance and repairs, professional fees, and advertising costs.
Always consult your accountant to determine which expenses are eligible.
Do you currently rent your home, or are you considering selling your home and renting? You can also receive the many benefits of a companion home, whether you decide to move into an established companion home or rent a home together with other companions.
Renting a larger home and sharing it is much more cost-effective than renting an apartment by yourself and allows you to have much more space for the same cost. You will often be able to live in nicer neighbourhoods and locations that you may have never thought possible. The sharing also goes well beyond rent. Sharing utilities, groceries, and taxi/transportation costs can make a big difference in your budget.
Companion homes also offer more flexibility than other rentals. If you just signed a one-year lease with a landlord, it may be hard to get out of it if you need to move. On the other hand, living in a companion home provides more flexibility on rental terms if circumstances change in your life.
How much extra could you earn and save with companion housing?
Click the self reflection exercise below to calculate your personal benefit.