Living In A Hotel – Is It Actually A Money Lifehack?

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You’re probably here because for some reason, you’re actually considering living in a hotel. It sounds a bit crazy at first, doesn’t it? But the truth is, it’s not. Unpopular opinion – it may even be more affordable than renting or owning your place (gasp!). Living in a hotel is the perfect solution if you’re the no-commitment type of person, or if you’re always on the move.

At some point, after gaining financial freedom, the goal becomes freedom in all other aspects too – well, that was the case with me. And you know what, that’s what living in a hotel comes with – freedom!!! The freedom to come and go as you please, the freedom to distance yourself from any repairs and maintenance… glorious freedom!

Of course, there are pros and cons to everything. This is something I discussed in great detail in this buyer’s remorse article, you should totally check it out (shameless plug). Now, you may be familiar with the renting versus buying debate, but what about living in a hotel? That’s a conversation that not a lot of people have because it’s such a strange concept.  

Why would you ever live in a hotel full time?

Okay, so let’s dive straight into it. Apart from the freedom (which is definitely my favorite because it means I can travel like a maniac if I want to), there are a few other benefits of living in a hotel.

Firstly, living in a hotel can be somewhat cheaper. Of course, this is dependent on your personal preferences and non-negotiables. If you’re happy to live in a hotel that is relatively modest, then you have a better chance of finding a hotel that is cheaper than other options overall. If you want nothing but lavish living… well then, your options are limited.

Secondly, when you live in a hotel, there’s nothing stopping you from leaving. Don’t quite like the color of the bedding? You can literally check out the next day. Okay, that’s a pretty dumb reason for leaving, but perhaps Barbie-inspired bedding is just not quite your thing and that’s absolutely fine!

Personally, what I especially like about living in a hotel is that it means you’re not bound by any long-term lease. My next thought is, that means you can plan a trip on a whim. I love traveling, and living in a hotel means that you can just book in and out of hotels depending on where you are, which is great!

This brings me to the third reason why you may consider living in a hotel – it means you don’t have to pay a single cent while traveling. That’s pretty self-explanatory, so I’ll just stop right here.

The financial side of living in a hotel

To an extent – and depending on how you choose to play your cards – living in a hotel can be somehow cheaper. If you decide to live in a hotel, you’ll find that you can also take advantage of some of the discounts that you get for longer stays. So, if you take the Airbnb route, you’re definitely spoilt for choice!

When it comes to your mortgage, the chances of a special or discounted instalment on a particular month are VERY slim. Like, close to zero. None!

Not convinced about the benefits of living in a hotel just yet? Have a look at what I mean in the table below.

OptionsMonthly Total
  
Airbnb Option 1 – Clairlea$1,504
Airbnb Option 2 – The Junction$1,847
Airbnb Option 3 – Trinity Bellwoods$1,980
Airbnb Option 4 – The Annex$2,207
Airbnb Option 5 – The Annex$2,210
Airbnb Option 6 – Downtown Toronto$2,267
Airbnb Option 7 – Riverdale$2,431
Airbnb Option 8 – The Annex$2,455
Airbnb Option 9 – Willowdale$2,473
Airbnb Option 10 – Riverdale$2,529
Airbnb Option 11 – High Park North$2,835
Airbnb Option 12 – Garden District$3,357
Airbnb Option 13 – Toronto$3,418
Airbnb Option 14 – Palmerston/Little Italy$3,507
Airbnb Option 15 – Davisville$3,540

Now, let’s compare these costs to actually owning the property that you live in. I intentionally put this list together based on my monthly costs of ownership. My numbers look like this:

ExpenseMonthly cost
  
Utilities$100
HOA fees$400
Taxes$200
Mortgage$2,851
  
Total$3,551 !!!!

Yup, if you opt to live in a hotel (or an Airbnb in this case), you could save yourself a pretty penny in the process. This actually means that when I’m traveling, I still cough up $3,551 per month – even though I may be out surfing elsewhere. I don’t know how I feel about that. Especially when you realize that you could very well book a whole house for half of that.

Travel

One of the more obvious upsides, should you decide that you want to live in a hotel, is that you can quite literally drop your monthly payments and only pay for what you’re actually using. Right now, when I get the urge to wake up to a new view, I have to factor in my stubborn mortgage (bleh!). This means less money to spend on the trip :( 

Every time I travel, my mortgage ends up being my biggest monthly expense. I tend to take some pretty long trips – that’s what happens when you’re financially well-off and have managed to escape the rat race. That, however, doesn’t mean that I don’t think about that fixed cost that just walks out of my account even while I’m not even occupying that space.

Sure, I could always Airbnb my place, but that’s a pain. Quite frankly, it would mean having to hire someone to oversee and facilitate everything while I’m traveling. That’s a hassle I don’t want.

Also, by choosing to live in a hotel, there are savings to be made annually (big yay!!!). If you’re like me and love extended trips or vacations, then it’s worth crunching the numbers to see just how much you could really just by choosing to live in a hotel. (Don’t forget that people who live in a hotel don’t have to worry about a single broken thing or leaking geyser!!)

Personally, I think that alone would be motivation enough for me to live in a hotel. But, I don’t have that liberty right now, so let’s have a look at what I COULD’VE saved. Using my numbers, I currently pay $3,551 x 12 = $42,612 per annum. Mind you, this is excluding any unexpected repairs and maintenance.

If you’re also responsible for little humans, then you’d know that a lot of unexpected repairs and maintenance costs could arise in a 12-month period…

On the other hand, if you’re living in a hotel or Airbnb that‘s about $2,455 per month, you’re looking at about $29,460 a year. BUT, if you choose to go on a 3-month vacation, then you end up only paying $24,550 per annum! Essentially, you could save about ($42,612 – $24,550) $18,062 on an annual basis.

Yes, whether you choose to go on vacation or not, as a homeowner, that mortgage will always be there just staring it you and waiting to eat away at your bank balance.

Again, these costs and savings change depending on how you choose to juggle things. Yes, you could even end up saving way more than that. Another plus – if you live in a hotel, you’re not paying for cleaning and consumables and stuff (MORE SAVINGS)!

So, if we had to look at home ownership versus living in a hotel, these are some of the main pros and cons that immediately comes to mind:

Homeownership Pros:

  • Potential to earn passive income through rentals
  • Often a highly lucrative long-term investment
  • Greater privacy and sense of accomplishment
  • Freedom to decorate your space as you wish
  • Overall stability, especially for families
  • A way to build a good credit score
  • No restrictions on pets, house rules to adhere to… TOTAL FREEDOM TO DO WHAT YOU WANT (well, in most cases)

Homeownership Pros:

  • Mortgage payment regardless of whether or not you occupy that space in any given month
  • Liable for repairs and maintenance
  • Usually high upfront costs
  • Equity doesn’t grow immediately, so it could be years before you actually start to see a return on your investment

Living in a hotel – pros

  • Not liable for repairs, maintenance or consumables (such as cleaning material and detergents)
  • Not bound to any long-term lease
  • Fully furnished and ready for occupation
  • MAJOR FLEXIBILITY
  • Constantly exploring new places and cuisine; a breath of fresh air
  • Access to additional amenities that you might not have in your own house (such as gym, on-site restaurant or lifestyle center)

Living in a hotel – cons

  •  Living out of suitcase and carrying your whole life with you in your car
  • No set address for deliveries and mail
  • Not forming any lasting relationships within “the neighborhood” due to having to constantly be on the move
  • Limited space which means possibly having to keep some of your belongings in storage

How much can you save?

Okay, so let’s take it a step further and see what you could save over 5 years. If we use the calculation above, you could save at least ($18,062 x 5) $90,310 over a 5-year period. Before we look into this even more, I must just highlight some of the lessons I’ve learned in property investment so far.

If you don’t know by now, I’m all for diversified portfolios and passive income (I mean, who doesn’t love the idea of making money while they sleep?), so I think rentals are great. Also, if you’ve spoken to anyone who has even just a slight interest in real estate, then you’d know that location is everything!

So, while growing cities are investments for your future, if your cash flow isn’t large enough, then your income can be quite volatile because of repairs. This is something I’ve already highlighted, but I’m reiterating it because trust me, those urgent expenses can come at you real quickly and you need to be prepared, always. Stay ready so you don’t have to get ready.

I know, that’s such a sporty/motivational kinda line, but hey, it gets the point across.

Now, back to how much you can really save. Hmm… (insert thinking face) what to do with an extra $90,310 in savings each year? I’ll tell you. You can invest in rental property. Using my own lived experiences, I’ll show you how much more you could make from the annual savings.

Side note – I’m always experimenting with my money and trying to figure out how to put it to work so that I get more benefits from it.

I bought a middle-class investment property for a decent $50,000, so you could definitely do a lot more with that $90,310 saving. Rental houses generally give about 8%, which means about $7,224.80 in rental income. Annually, that’s $86,697.60. That’s close to half a million in 5 years!

Should you live in a hotel?

Look, it’s not my place to tell you what you should and shouldn’t do, BUT, I think if you’re in-between places, then you should try it out and see what living in a hotel does for your finances. Even though it seems like a better – and possibly even cheaper alternative – I won’t be selling my house anytime soon to try it out.

To be honest, I think living in a hotel is great if you’re a free spirit that really just goes wherever the wind blows and has the liberty to just up and leave.

For some of us though – with big people responsibilities and kids and stuff – it may not be the best move. When you consider the need to create some sort of stability and home base for the kids, you end up thinking twice about living in a hotel full time, no matter how appealing it seems.

It’s cool if you decide to live in a hotel for an extended period as a change of scenery or whatever. If you already have a property (or two or three) under your name though, you’ll still have that darn mortgage looming over you the whole time.


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