Category Archives: Real Estate & Rent

The Moving Saga Continues

Anxiety doesn’t begin to cover it. Within the next 26 days my boyfriend and I need to find an apartment where we will live for — at least — the next year. And no matter what, even if we live in some crappy area, our rent is going to significantly go up upon moving in together. It’s giving me major panic attacks.

He’s committed to a maximum of $800 in rent ($850 if we find a place that’s absolutely amazing.) That means we have to find a place for under $1600 if I want the rent payments to be equal. I do make more than him by about $40k, so right now I’d be ok with paying a little more. The problem is my job situation is very up in the air right now and I could easily go from making more than him to being on unemployment. I’d rather stick to an $800 monthly max for myself as well. That leaves us with very few options, and still a person $150 a month rent increase. Continue reading

Investing 101: What are REITs?

When it comes to investing, the beginner likely has heard of stocks and mutual funds, but there are a variety of other investment types that can make up a portfolio. In this “Investing 101” series, I’ll do my best to explain different investing opportunities as I understand them, and various things to know about each type of investment.

Today’s Investing 101: Real Estate Investment Trusts (REITs)

A REIT is a company that owns income-producing real estate. You can buy a REIT like a stock, but you’re really investing in property (or someone else’s mortgage.)

According to REIT.com, to qualify as a REIT a company must have most of its assets and income tied to real estate investment and distribute at least 90 percent of its taxable income to its shareholders annually. To qualify as a REIT, an entity must not be “closely held,” meaning, at any time during the last half of the  taxable year, more than 50% in value of its outstanding stock cannot be owned, directly or indirectly, by or for not more than five individuals. Continue reading

Silicon Valley and San Francisco Housing Issues, About That.

As I’m wading deep in the hunt for my new Silicon Valley apartment, news of protesters – angry at rising rent prices in the city and nearby areas – smashing the windows of Google Buses – is all over my Facebook feed.  Over the past 10 years, 75,000 people have moved to San Francisco, but only 17,000 units of housing have been added. Thus, you have angry residents who are getting evicted from their supposedly affordable apartments in a few regions of SF that had yet to gentrify.

The argument by the protesters is largely to send this group of (supposedly) highly-paid elite down to the Peninsula and South Bay. What the stories are missing is that there’s not exactly a plethora of housing down here either. Well, maybe there is in the far South Bay, but the issue would just move to San Jose should suddenly all the young single tech types move down here. Continue reading

Apartment Hunting: The Search is On

After driving in what seemed like too many circles in a three-block radius, we parked in front of a tiny row of one-story apartments and walked inside. The 450 square feet “one bedroom” apartment led you into a tiny room straight from the doorway, with another even smaller room in the back. The walls, you could tell, were extremely thin, as neighbors a few apartments over playing music were providing atmospheric entertainment. We looked around for a second then got back in our car and left.

The tiny Mountain View apartment was listed for $1175 a month.

I’m rather spoiled but I care about having a living environment that makes me feel good. This is an issue of both space and natural light, as the rest I can forgive. It seems though both space and light come at a vast premium around these parts.

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Buy vs Rent: A New Thought

We’re moving in together. For real this time. For better or worse, we found out the place he’s currently living in is not a legal dwelling and thus he must move out. We were planning on moving in together this year, but this also expedites the planning and upcoming move.

While it might be dumb to consider buying something together now, I have a few ideas that could make this concept be more logical than irrational. Even though I occasionally mention moving back east at some point, the reality is that I want to stay in The Bay Area. I want to live here forever and have my kids born and grow up here. Continue reading

Should Parents Help Pay for a House?

It’s hypocritical of me to cringe when my boyfriend suggests that one day his mother might help us purchase a house. After all, my parents put me through college and didn’t require I pay back one cent. But, based on what they taught me, once college was done I was on my own. Want to go to grad school? That’s all on me. Want to go on a shopping spree and put myself into massive debt? My problem. Want to buy a house? Good luck and good riddance!

That’s why my nose chinches up when, in response to my commonly voiced concern — how are we ever going to afford a house to live in here — my boyfriend said “my mom will help.”

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What $1300 Rent Buys You In…

As many of you know, I currently live in a 3br/2ba apartment where my chunk of the rent is $650. I’d like to move into a place with my boyfriend where I can maintain the same rent, but around here that’s quite challenging. For fun, I decided to research what $1300 a month gets you in different parts of the country. And cried a little.

San Mateo, CA (Bay Area)

expensive rent in san mateo

400 sq ft “studio apartment” cottage
1 small walk-in closet
PG&E included
private entrance
stainless steal range, fridge, sink, no oven

Lincoln Park, Chicago, IL

850 sq ft
2br 1 ba condo
modern kitchen
washer/dryer in unit
private front yard

Santa Fe, New Mexico

1200 square feet, freestanding house
1br, 2ba w/ study
high-end finishes
washer/dryer in unit
large walk-in closet
private landscaped yard

Boise, Idaho

2205 sq ft
4br, 3ba plus bonus room
luxurious master bathroom
cathedral ceilings & gas fireplace

Pittsburgh, PA

1400 square feet
3br townhouse
holy shit this kitchen…

What does $1300 a month rent where you live?

Housing: To Buy or Not to Buy, That is the Question

I can’t afford a house. The cheapest houses here cost $700k and those have 2 bedrooms and 1 bathroom and are major fixer uppers in not-so-nice areas. (Remind me again why I love the Bay Area?) But there are a few condos which fall into a price point that could make sense. $500k wouldn’t be that crazy (maybe?), if I were to liquidate all my stocks for $97k (well, it will be less than that due to taxes, but most of my stocks have been in there for a year so will qualify for 15% tax rate on profits.) Figure $80k from that, and I’d have to find $20k for a downpayment to have 20% down on a $500k property.

My credit score is a 724 (not perfect but still considered excellent to most lenders, I hear) so I should be able to get a pretty good rate. I don’t understand all the fees involved in buying, but I assume there will be quite a few added on to the total price of the condo, so that would mean I probably could only afford a $400k place. That would be basically enough for a decent 1br 1ba condo.

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Growing Up and Growing Out of My Life

It’s the last year of my 20s. There is so much that I’ve accomplished in the past 9 years, yet I am struggling with wanting to create a more stable life for myself and trying to save a sizable amount of money. I want to be able to applaud myself for having built up a networth of $200k by the age of 29 (well, it’s down to $194 again, but should be up to $200k by the end of the year) but I just don’t feel accomplished. I feel more scared then ever. $200k seems like nothing that could easily disappear should I not have a job for a while or have some horrific health incident.

I also still feel uncomfortable in my own living situation, which granted, is a lot of my own fault. I’m not the easiest person to live with. For the most part I try to keep to my room, but if I ever spend time in the common areas I just have a natural tendency to be a little messy, and my roommate is a bit of a neat freak. I actually really enjoy living in a neat apartment, so it’s been nice to have her so focused on keeping the common areas clean which I could enjoy from afar while I walked to my room. Still, I just want a place to come home to that feels like home. And I’d like to be able to simplify my life and focus on keeping the place clean.

So I’ve looked on Craigslist to see what’s available. I’m paying $650 a month right now for a small room in a 3br / 2ba. I practically have my own bathroom (long story) so it’s really nice. And the complex is lovely with a pool and overall I like the place. It’s a 30 minute drive to work. There is free laundry in-unit (which is basically unheard of in apartment rentals) because this is a condo that’s rented out.

For a one bedroom apartment of any reasonable quality in a decent area, it would be $1500 minimum. More like $2000 a month. Studios aren’t much cheaper. Then there’s all the utilities I’d have to pay for on my own. It just doesn’t make fiscal sense. I’d be best off staying here as long as possible and saving the money. It makes up for all my shopping splurges. Otherwise I wouldn’t be saving nearly this much. And my goal next year is to save (with interest) another $50k. How could I do that spending another $18k a year on rent? That would just be stupid.

So I’ll go back to hiding in my room, trying not to offend my roommate with any ounce of mess, and hopefully she will forget I live at this place for a bit longer. At least another year of saving. Once I have a quarter million in networth, maybe then I’ll feel like I can relax a bit. I’m just so frustrated because I feel like I’ll never have the kind of control I want over my financial life. I know, I know, everything is so superficial, but I want a nice house and a life where I can buy my clothes at Nordstrom or Bloomingdales without having to worry about it. I don’t need to buy $1000 designer jeans but, my bras cost $60 a pop and my jeans do cost $200. I spend $300 on makeup some months because it makes me happy. I still save a good 25% or more of my income. Because I am paying so little for rent. Because even though I spend too much on clothes and food, I don’t really have much of a life and I don’t spend on anything else.

I am just tired of being so focused on saving, I guess. Which is stupid – I need to save. But I look at other people I know who are my age and for the most part they aren’t as worried about money as I am. Heck, my boyfriend who will be 31 in March has not saved a dime and he just quit his job. He hasn’t even opened a Roth IRA yet. Not that I want to go to that extreme, but here I am making $100k plus bonus and I am still worried about spending $1.5k – $2k a month in rent. Which is what I’d need to spend to live on my own. If I can’t afford that with a six-figure income, who can?

When To Move In Together

This May, my boyfriend and I will be celebrating our 6 year anniversary. Many people are surprised that we still don’t live together. We spend many nights together and might as well live together, but the costs of living together would dramatically change our budgets.

As many of you know, four years ago I lived in a studio apartment in Silicon Valley. In 2007 when I moved in rent was $905 a month, utilities included. The next year, a big, evil apartment management company bought my complex and raised my rent to $1100 a month. The following year, when they raised it again to $1295 per month for the large, but definitely not luxurious studio, I moved out and got myself roommates.

I’ve never done well with roommates — both because I’m not always the cleanest of people, and because I can’t stand other people’s noise when I’m in the mood for silence. But this time around things worked out. One of the girls I live with is more of the mother type, so as much as my occasional mess bothers her, she helps keep me on track, and I do my part to keep my mess enclosed in my room. We’ve had one roommate move out, due to her schooling taking her to another part of the state, and my consistent roommate’s girlfriend moved in. She’s never home (she works until 11pm at night) and is very quite. The  motherly type roommate can talk a lot, but generally is respectful if I go into my room and don’t want to have a conversation. All in all, the living situation works out.

My apartment is in a condo complex and is quite lovely for the area. We have a complex pool, we are right off the freeway, and in the beautiful hills of Silicon Valley. The 3br 2ba is about $2200 per month total, and since I have one of the smaller rooms I pay $645 a month in rent. Utilities split come to $70 max, even in the cold months. When I moved in I was paying $605 a month in rent, so in three years it has only gone up $40 a month in rent, which is really not bad at all. I shudder to think of how bad my financial state would have been should I have stayed in my studio apartment (which is now going for nearly $1600 per month to first-time renters!!!)

But as I get older, living with roommates feels a bit juvenile. Yes, I have my own small room which can fit a full-size bed and not much else, and a large shared living room which is decorated relatively nicely by my roommates (with my bookshelves and books being my only contribution to the space), but it just doesn’t feel like my home. I always feel like I’m living in their home. Which would be fine if I were single, but the fact of the matter is I spend a large number of nights each week at my boyfriend’s house. I feel comfortable with him, even in his free-standing wooden shed where he lives (it has internet and electricity but no plumbing or kitchen, you have to walk into his hoarder grandparent’s house for that.)

Now that he’s turned 30, he has perked up about the concept of moving in together. I’m ready for it too, but the finances don’t make a lot of sense. He made $25,000 in income last year (taxed at self-employment tax rates.) Living for “free” (he pays bills, for his car, and food, but not much else) he can live on $25k per year. Since he made so little, after taxes, he was able to take home $22k in 2011. He has $8k in an emergency savings account, and no other savings. No debt either, so he’s doing fine as long as he stays in his freemium model of living. As soon as we move in together, and as soon as we think about our future, this all changes.

I made about $100k last year, maybe $65k-$70k after taxes. Putting out incomes together, $90k after taxes should be enough to live together, even though I’d clearly have to pay more of the rent. A decent 1br in the area goes for $2000 / month, maybe $1800, but after utilities that would be $2000 at least. Even if he were to increase his income substantially and we could split this 50/50, that would be $1000 per month or about $350 more per month, $4200 a year that could be put into my investing accounts.

On the other hand, moving in together would likely force my bf to get a full time job with a reasonable salary, which, in the short term, would reduce our spending ability quite a bit, but in the long term may enable him to increase his own earnings. It’s difficult to go from $25k to a $70k salary, but if you take a full-time job at $50k and earn basic income raises, eventually you will get up to $70k per year. Ideally together we will bring in $200k pre-tax by the time we have our first child, which would let us live on $100k per year, and have $30k-$50k for savings. But that also would require that we both continue to work full-time with no time off for parenting other than the few weeks one gets in the US from your job.

Regardless of the future, I wonder what is best for now. It seems like I should stay in my current living situation as long as possible, saving as much as possible, till the time comes when we get married and it is more rational to move in together. But I’m also tired of living like a young adult with roommates when also having a very stable, long-term, committed relationship. And I’m even more tired of spending so many nights in my boyfriend’s shed, without plumbing, and having to wander through the woods in the middle of the night to get to the main house, where I trip over his grandparent’s mess, and eventually find the one bathroom in the house with no working sink.