Most jobs in my industry are an hour north of where I live (more than that in traffic) and I’m growing weary from the commute. We’re paying $2500 a month in rent currently for our 800 square foot one bedroom and I’m starting to think renting is no longer cost effective for us. Granted, we won’t be able to afford a 1 bedroom quite a nice as the one we are renting – BUT – we could buy a 1 bedroom condo closer to the city and then at least we’d lock in our monthly rates so we can actually afford to stay here.
My crazy thought is buying a 1 bedroom 1 ba condo. I wouldn’t have considered this before, but it’s the only way we can own property for <$600k. My goal would be to get the monthly mortgage under $2000 so with standard $500 HOA, we’d be paying the same (or even less next year) than what we are paying to rent.
Mr. HECC thinks buying a 1 bedroom condo is foolish since we’re planning to have kids soon. I guess that’s true, but 2 bedroom condos are going to start at about $800k (with nicer ones being $1M+) and then our monthly mortgage will be higher than rent. If I’m going to own, it will be to solidifying our monthly housing costs for the foreseeable future.
The reality is, who knows if I can have kids — and if we have to, we can live in a 1 bedroom until our child is 5 and then we can move. That’s at least 6 years of living in a place. I don’t want to stay in a condo longer than that anyway (unless I don’t have kids) so we’ll be outgrowing our space regardless. It might be easier to sell a 2br condo though, so that’s one consideration since we’ll want to move.
Otherwise, our rents are going to keep going up and up and up. Our current apartment is renting for $2645 / mo to new leases, who knows what they will raise our rent to (probably that at least) in May. And whether or not I’m still working at this job, it is pretty clear that if I stay in this area I’m going to be working for small startups for the rest of my career since no big company will consider hiring me… and 80% of the small startups are in the city. I might as well make an effort to reduce the pain of my commute by a little bit since things are starting to settle down in my life.
We definitely don’t have to buy today, but considering our lease is up in May I want to start looking. Renting isn’t bad and I don’t think home ownership is an investment (though my friend who bought 6 years ago for $800k has property now valued at $1.4+, a $600k increase in 6 years, or $100k YoY) – but condos won’t appreciate that much and who knows if house prices here will keep going up. I’d rather just purchase a condo IF I can stop my monthly housing costs from going up. That would be the only reason I’d do it. I’d probably decrease my quality of housing in order to be able to afford this, but I think it would be worth it.
I also don’t think I’m really a house owner type. As much as I love the idea of having a backyard and property and my own home, I’d much prefer to have the HOA in charge of fixing the gardens and the outside of my condo. Less to worry about, more to focus on the things that matter. So. I’m kind of excited about starting to look at purchasing property. What makes me feel good about it is by May I should be at around $450k networth and if I buy property for under $600k then I’m closer to having a good safety net should I lose a job et al. Plus, Mr. HECC will be working. I want us to buy a home that we can afford on ONE income for at least a year, in case one of us loses a job. That means my max budget is $600k, which means a very limited 1 bedroom condo selection. And I think it will be good for us to own. This apartment has never really felt like home. It’s nice, but I can’t paint the walls or make it our own. I’m ready for something new. For the next phase of my life. Home ownership.