Category Archives: Real Estate & Rent

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.”

Continue reading

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.

Continue reading

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.

Relationship & Life Next Steps: Moving in Together

I’m 28 and this March my boyfriend of 6+ years will turn 30. Even though I’m quite content with my current arrangement — living with two roommates and paying $650 a month in rent, while my bf lives at home in the back of his grandparents/mothers house.

But I’m also wondering, what’s next?

I’m ready to take the next step and move in with my boyfriend, and he’s ready to move in with me, minus the logistics. My rent situation right now is financially smart, and he’s not even paying rent (which works since he’s working PT and quitting soon.)

Looking at our options:

Stay in our current situation until we get married: Rent will stay $650 / month for a while, my landlord rarely increases rent and I just had a $15 / mo increase. Probably the smartest move. We’ll move in together in 2013/2014 after we get married.

Rent a 1br Apartment: This will likely cost $1600 – $2000 / month. Even split between the two of us, that’s $800 / mo at the very cheapest, more likely $1000 / mo for each of us.

Buy a 1br Condo: $600k? It’s hard to figure out the exact costs of owning a 1br condo, but it seems like this will end up being quite a bit more than renting given HOA, taxes, and other fees.

Buy a house w/ an in-law: My bf’s parents currently do not own property. His mom lives in her parents house, and his father rents an in-law. His mother could feasibly help us out with a downpayment, and his parents could live in an in-law on our property and pay us rent.

Still, the best plan seems to be to stay in my current living situation. Paying $650 a month in rent means I can possibly save $50k per year. The second my living situation changes, my hope of saving $250k by 30 disappears. The house I want to buy when I have a family will likely be $1.5M, and my bf currently has $0 in savings, so it’s up to me to be able to afford that. If I can get to $500k in savings by 35, maybe I can buy a $1.5M house. I’m not sure if that’s enough, and I’m also not sure I can get to $250M in savings by 35 — I think if I spend the next seven years living with roommates, not with my boyfriend, I could do this. But that’s a long time, and I really want to start living my adult life with my boyfriend in our own place, so we can invite friends over for dinner and such, and so I can stay with him and not have to worry about not having my things and having to run home before going to work in the morning.

Meanwhile, if I save $500k by 35, I’ll be able to buy my (nice) childhood home outright in New Jersey! It’s crazy how cheap the housing is there.

Rent Increase: Just 2%

My roommate informed me that our landlord is raising our rent in 2012. I was worried it was going to be a huge increase, given we haven’t had rents raised in a while, and at my last “property management-owned” complex where my rent was increased 22% the first year and 18% the next (from $900 to $1100 to $1300 when I finally got out and got roommates again.)

My rent started out at my current place at $602.50 for my room (I share an apartment with two other girls.) Shortly after I moved in my rent was raised to $632.50 per month, which was still less than half of what my former studio was charging. In 2012, my rent will go up to a whopping $647.50 a month. I just looked up the current cost for my old studio, and it’s now listed at $1570 – $1705 per month! For a studio! Yikes, I’m glad I left. That would be eating up half of my income now, and back then it would have eaten up all of it.

However, looking at my old apartment rent increases is a good reminder how important it is to try to get a yearly raise to at least keep with the rate of inflation, and hopefully a little extra. Since the beginning of my career, I’ve managed to take my raises by switching jobs and factoring in what I should be making, even if I never got a raise at my earlier company.

However, now that I plan to stay at one company for a long time, I know I must focus on figuring out a way to obtain reasonable pay raises or better in the coming years. I’m not too concerned about the price in rent at my current apartment, but what if my elderly landlord decides to sell the condo for one reason or another, and I have to move to a place that costs more.

How much do you pay for rent? How much did you pay in 2010?

Maybe it’s time to buy my own place…

It’s not what you think. I’m not determined it’s time to buy my own place because the housing market is down and mortgages are still low, though that’s part of it. Given I’m not sure how low the market has really gotten in Silicon Valley, the $500k 1br condo prices don’t really merit jumping into the housing market. I’ve all but accepted that my rental days are only numbered by the days between rent, not the time I’ll be living here.

But then there are nights like this. I hate feeling like an old stodge, but I’m rarely home, and tonight, on a Saturday night granted, I’m home sick, in bed, asleep, at 2:30am, and my roommate comes home from a night out with her sister who is in town visiting, and she seems to forget she has a roommate who is sick and asleep. If it were midnight, ok, I’d get over it, but it’s 2:30am. They’ve been bouncing a ping-pong ball as well for some reason. While the noise has all but simmered to a murmur now, the damage is done. I’m wide awake (hence the reason for this blog post.) Perhaps my sanity is reason enough to buy my own place.

In the meantime, today I read a bit about the markets, and freaked myself out over the potential to lose all my cash, even with a switch to more value investing. I’m not stupid, I realize that’s a risk with investing, but suddenly I’m thinking my $60k in stocks might be better spent on the downpayment for a condo. The dollars still don’t add up — not unless I want to be the on-site landlord to roommates, and I’m not the responsible type who would be up for that challenge/drama.

So it looks like rent is still in my foreseeable future, as are nights like these.

She Really Doesn’t Want to Move

In 3 months, my two roommates will be moving out. And I will either be moving out also, or have successfully found two new roommates. Stressful moments of being a renter like these are the few times I think paying for a mortgage would be worth it. (Then again, in the Bay Area, the only place I could afford would be crooked and vertigo inducing or burnt and dirty — see the San Jose Mercury News cover story on Bay Area homes you can buy for the national medium home price.)

Today, I met up with a girl i know who has an apartment in another Silicon Valley City. It’s a 2br/1ba. Her roommate is moving out in July, so the plan today was to look at her apartment and extra room, and then for her to come look at my apartment. Her apartment is very small and, well, it feels like an apartment. It doesn’t feel like a home. That can be fixed, but it’s just so tiny. And the rent is higher than my current place because it’s a 2br. So rent there for a room that’s smaller than my current room in an apartment that’s not as nice would be $725.

My place is a 3br/2ba with a large room for $770 and two smaller rooms for $635. Free laundry in the apartment. A pool in the complex. The apartment is right off the highway. It’s 30 minutes or less to my office. And the more I thought about it today, the more I realized… I really don’t want to move.

So, I could just tell the girl I met up with that I’m not interested in her place. I bet she’s going to want to stay there because it’s close to her bf. We also discussed looking at other places when it gets closer to July, but it’s such a pain because we both would have to give 30 days notice, and we couldn’t even really start looking until the month before we’d have to move.

And… moving, on its own, is expensive and a pain. Renting a UHaul, dragging all your stuff from your place to the next place, it’s just no fun at all. So I’ve decided that unless I find an incredible place to move to, I really want to stay here. The hard part will be finding two roommates. It would be nice if this girl wanted to move in here, into the cheaper room. That way we can rearrange the rents so the two cheaper rooms are $575 each, and the larger room is $870. I think that’s fair since the larger room is giant, has a walk in closet and a big closet, and a private bathroom.

Hmmm…. this is really bumming me out right now.

Rental Prices Rising as Housing Stuck in Slump: Or, The Tiniest Apartment in NYC

When people don’t want to buy houses (or are forced out of their houses because they can’t afford them) that means one thing: rental costs are going up. It’s a simple law of supply and demand. Reis Inc’s quarterly report showed the vacancy rate dropped to 6.2 percent in the first three months of the year, down from 6.6 percent in the fourth quarter. It was the steepest fall since the commercial real estate research firm began tracking the market in 1999.

Increased employment, especially for 20- to 34-year-olds, is spurring demand for housing. Many of those newly employed younger people, however, cannot come up with the tens of thousands of dollars often needed for down payments, turning them into renters. — Reuters

However, not everyone is letting rising rents get to them, even in the world’s most expensive cities. Renters, for frugal inspiration, 40 Year Old Felice Cohen — a professional organizer in New York City — shows that you don’t need to spend a lot to live in an expensive area, you just need to be, well, extremely organized. And be willing to sleep 23 inches from your ceiling. This woman spends $700 a month in NYC on a 90-square-foot closet apartment… closet. You have to see this (if you haven’t yet)…