This week I was reading a post on GRS (Get Rich Slowly) called Swapping Convenience for Low Costs. It was a really well written and thoughtful article on the choices we make and how major expenses are usually due to wanting something to be convenient. I know in my life, the major area of cost is always eating out, due to being too tired, too sick, and occasionally too lazy to cook.

What really caught my eye was a comment by Matt Jabs from Debt Free Adventure. He and his wife are selling their home. Their monthly housing payment will drop by over half with the “added bonus of lowering…utility costs.” Mmmm, okay?
I hear this a lot actually, especially since we’ve started looking for a house again. “Oh, and remember, your utility costs are going to be a lot higher with a house.” If they were I’d poop twinkies and move into a cardboard box. Our space in Portland is under 500 square feet. When we started looking at a house, I consulted several friends who had houses in the size and age range we were looking at. For a third of the space, I’m paying almost three times what they do in utilities. Why? There are several possible reasons:
All of our appliances are much older. The refrigerator is sporadic at deciding whether or not it will cool or freeze our mayonnaise, the dishwasher fondly remembers Reagan, and the stove/oven has no sense of the words “even” or “continuous” when it comes to heat.
We have a 50 gallon water heater (yes that’s five-oh) for our small space that has broken twice, but since it heats at least half the tank at any given time, considered more than enough for our space, here we sit. Our friend who repairs water heaters told us it’s more than 20 years old, and the last two maintenance guys who suggested the complex replace it mysteriously disappeared. Maybe our water heater ate them?
As many know, apartments don’t always have the best insulation. This isn’t just an issue when your neighbor’s playing Bohemian Rhapsody at midnight in a poor attempt to cover a loud argument, it also affects your utility bills. Our apartment is very poorly sealed, but in the general scheme of things complexes only have to meet certain basic standards. Asking for additional weather-proofing is not required or prioritized by a complex that isn’t paying utilities. There’s a lot you can try to do with draft dodgers, etc., but you can’t add insulation to the walls, replace windows, etc.
Neighbor Effect
Your neighbors may also have random unknown effects on your utilities. Remembering the previously mentioned poor insulation, when two sets of my surrounding neighbors went away for work and vacations during Portland’s big freeze last winter, I got to pay to heat their apartments, too. Heating and cooling occur by a type of osmosis. Insulation allows you to keep the temperature in an enclosed area different than it is outside. Without insulation, all the sections grow to a kind of equilibrium. It’s hard enough to heat one 45 degree apartment; heating three will freeze any checkbook.
Complex Requirements
Another thing that happened during that nasty freeze was our complex added some clarifications to several vague clauses in our lease. If our apartment wasn’t kept at a certain temperature and freeze damage occurred, we would be held responsible for all resulting damages to the building. Trying to get our apartment up to the required temperature was daunting, frustrating, and at some points impossible or unnecessary.
Many people will say, “Well there’s no guarantee your house will be properly weatherized or insulated or that you’ll have energy efficient appliances.” I completely agree, but the level of control is different. When you own your own property you can put in weather stripping. You can replace a sliding glass door that is so continually off track it might as well be open all winter. You don’t have to hope something is deemed a valid or necessary repair.
Back to the Fallacy
Getting back to the original point, there are many factors that will alter what you pay in utilities, and renting vs. owning isn’t one of them. This post mostly addresses apartment living, but the concept is still the same when renting a house as well. If you want to make sure you pay the least in utilities, look for updated weatherization and energy efficient appliances when you enter. Make sure the building shows signs of continuous maintenance.
I hope Matt does very well in his current downsizing, and I’m glad the potential utility savings is a bonus and not necessary. You just never know which way that pendulum will swing.