Tag Archives: rental

Another Sunday, Another 20 $2M houses

They range in price from $1.4M to $2.2M — that is, houses that in any other part of the country would range in price from $200k-$600k, but in the Bay Area are priced beyond comprehension. I took a solo day of open house touring to check out a few on the “lower” end of the range that I thought might work for myself, my husband, my son, my future child(ren), my husband’s dad and my husband’s mom. You know — a 1500 square foot 3br/2ba on a lot at least 6000 square feet with an accessory dwelling unit (ADU) that we could all live in together as one big happy family…

I even started, in previous weekends, exploring further south (as in San Jose) – but prices aren’t much better there. You get a bit more for your money space wise, but you’re still spending $1.5M+. For a 2 hour commute to SF, you can possibly find something for $1.2M. It’s just extremely depressing and every day it weighs on me. I constantly text my husband “let’s move to NY” and I’m partially serious but he’s very serious he doesn’t want to leave. He’s right that with his mother and father we can afford something here. And I do want to stay but it’s just too much pressure if he’s going to continue to make $90k freelance income per year without asking for a raise or seeking additional projects –though his flexibility is helpful with childcare, but not so much with home buying.

I know, I know – we should keep renting. We’re fine in our 1 bedroom right now (which at 800 square feet and $2500 rent controlled to inflation is a STEAL!) When I have kid #2, we can move to a 2/2, which will likely be $4500/mo, but that is going to be in at least 21 more months. (hopefully) as I don’t plan to get pregnant again until May. That’s nearly two years of saving $$$ living in a one bedroom if we can survive it.

But I’m still just a train wreck over the whole “so this is it” mentality I have now… this is it… I’ve “made it” – heck, this year I may bring home over $350k in total income – and yet there is no way I can buy a house as my career won’t consistently deliver $350k / yr in income. I’ll be back to $150k in a few years probably and we can’t afford to buy on $240k income. I don’t know how anyone does it.

I’m trying to just let it go… to stop wanting so much because I know that’s what makes me unhappy, and outside of feeling a little distraught by the state of my bedroom (because it includes my husbands office and looks like a college dorm room in terms of furnishings), I’m pretty happy where we are now. I wish my son had an outdoor space to run around in,  because we don’t get to the park often enough and our balcony isn’t safe for him – but he has the entire living room floor as his toy room. There are no stairs (inside our home anyway) for him to hurt himself on. We have a pool in the apartment complex I’ll definitely be enjoying with my son this summer. So it’s not all that bad.

I just don’t see how I go from where I am now to that next step. Buying a home is probably the wrong move financially. So we wait. We wait and probably get more and more priced out of the area until we have to move. Maybe that’s the strategy now. I wish it didn’t have to be. But these $2M houses make me spit out my water and laugh so hard… $2M should buy you luxury and I don’t think I’ll get over that to buy a home in that price range, nor can I get over spending $1.5M to buy a fixer upper on a not-so-great street. So, yea, for now, for-ever?- we rent.

Who can afford to own a house?

I’ve committed to remaining in our $2500/month one bedroom apartment for as long as we can stand it with our soon-to-be child. I’ve even gotten to appreciate the forced closeness we’ll have living in a small space with kiddo, especially in the first year when it’s recommended baby sleeps in the same room with parents…

However, I’m very concerned about what happens “next.” Yes, we can leave this overpriced corner of the country and live somewhere that a much lower salary would enable home ownership. I don’t even care about “owning” so much as I care about being able to afford some sort of residence that feels less like an apartment and more like a home. A townhouse would be perfectly fine, especially if it has a little grassy area in the back, and a community park nearby… Continue reading

Should I Buy a Condo?

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. Continue reading

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)…

Should I Rent Forever?

I’ve been fairly happy renting thus far in my life. At 26 years old, I’ve never really contemplated owning my own place until now. My rental costs have varied greatly over the years…

2004-2005: Chicago, 2br apartment shared w/ 3 people in a nice area. I lived in the living room w/ a curtain for a door for $460 a month. I think some utilities were included in that too.
2005: lived in DC, where I rented a room with a semi-private bath for $800 / month. Utilities were included. Then I moved to California, where my first place was “free” but it was really part of my internship stipend. Soon after I moved again… to a 4br, 2ba apartment shared with 3 other girls (and their friends on occasion) for $480 / month. When I got a full-time job, I decided I deserved my own place, even though I was making about $35k per year. So I found a studio with utilities included for $900 / month. In a year, the rent for that studio went up to $1100 / month. Even though I knew this was a lot, I didn’t want to deal with moving and I liked where I lived. So I stayed one year. Then they raised the rent to $1350 / month and I decided to leave the apartment complex and look for a more affordable, room-share situation. I found a place in a nice condo complex for rent with a smaller personal living area but a nicer all-around apartment for $635 / month plus utilities split between myself and two other girls.
The problem is that now I live far from my job so the cost of the monthly commute is about $230 / month for parking at the public transit station plus the train, and that’s not including the gas it costs me to get to and from the train. So… you could say now I’m spending $300 / month on transportation, or $1000 / month on “rent” including transportation and utilities. So I ask myself… should I move? If I do move, how much should I pay for a place? While my roommates and I aren’t best friends, we get along fairly well, and I’ve gone through my share of roomie nightmares in the past, so I’m not in the mood to get into any of that mess while just getting into the jive of things at my new job. Still, the cost of the commute plus the actual commute (about 1 hour 15 minutes each way) will eventually get to me. I could even find a place that costs the same or cheaper slightly closer to work… maybe 30 minutes closer… because there are some areas that are not as nice as where I live now that are on the way towards the public transportation stations. I really should be living there. But I just don’t want to deal with moving.
Then, the idea always pops in my mind… what about buying a home? Well, that’s really not possible right now… the average costs of a 1br condo here are like $600,000. Given that I only have $50k in savings at the moment… it will take me a long time before I could even afford a down payment on that. And the more I think about it, the more I realize owning a home… at least in this area… may never make any sense. It’s just too expensive. I look at how much my parents still pay for their house after all these years in mortgage and property taxes and homeowners insurance and think, wow, I should really just rent forever.
Of course, when I have kids one day, I guess it would be nice to own a home. I liked growing up in one place all my life… I think it would have been really tough to move around a lot, being as shy as I was. Then again, lots of families move a lot and they do just fine. And you don’t have to move all the time in a rental, you just never know when your landlord will decide they need you to leave. I guess that on its own is enough reason to consider owning. But really, how can anyone afford home ownership here? This year I’ve hit six figures… I may even make $150k this year, and that isn’t near enough for me to own a condo or a home in this area. I think I’d have to be making something like $300k / year before I could even really consider owning.
Do you own a home? Do you rent? What’s your monthly cost for owning or renting? Why do you own… or rent?

Live Within Your Means

While being interviewed for a television news feature about frugal living and saving money, I realized that despite being fully aware of ways to save, I’m just not doing enough when it comes to saving money. With gas prices rising, and my rent being what it was, I was breaking even at best most months, or covering the prior month’s expenditures with my next month’s savings.

While that’s better than going into debt, it won’t get me the things I want to save for – getting my teeth fixed ($10k), laser hair removal ($6k?), a condo/house (an $80k downpayment?), and grad school ($120k?). That’s a lot of money I have to save above and beyond the basic emergency fund and other living costs.

As many of you know, my rent was skyrocking up to $1300 this year and while I could pay that with my current income, it would basically cost me my savings plan.

So I left my apartment, without knowing where my next home would be. This month I’m staying with a friend for a measly $350, as she’s being so kind to let me crash in her spare bedroom. That’s helping me make up a little of what I spent on my vacation in Israel… I spent way too much there, figuring I could make it up when I returned and found a cheaper place to rent. That, indeed, is what I’m going to do.

I found a place that I like, and it has a lot of the features I was looking for. And my rent is going from $1050 to about $670 per month, after utilities (except internet/cable). I’ll be splitting the internet & cable bill 3 ways, so instead of it costing me $100 per month, it will be just $30. Total savings, based on last years rent, is about $350 per month, or $3750 per year. Based on the rent I was supposed to pay this year, I’m saving $600 per month, or $7200 per year.

While that’s not the $80k I need for the downpayment on a house, or even the $10k to get my teeth fixed, it’s a lot better than wasting that money on rent.

My new room is small. I’ll be sharing a bathroom. I’ll be paying a bit more in gas to actually get places since it’s close to a freeway but not that close to work. Biking to work is no longer an option. But the place, for the price, is rather nice. It has a washer and dryer in unit, plus a dishwasher, and a nice community pool. The complex is a mix of owners and renters, so the property is well maintained. The owners of the specific condo that I’m renting are supposedly nice (I haven’t met them yet) and haven’t even raised the rent in a while – much better than the money-hungry apartment management company that took over my last complex and those $250 a year rent increases!

So… while my savings has depleted itself a bit during the last few months, I’m confident I can make back most of that money within 12 months. Or at least I hope I can. And then the real saving will begin.

It’s Official – I’m Moving!

Looking at the lease renewal letter with the $250 rent increase one more time, I decided I really have to move. So I wrote up my 30-days notice letter, turned it into the apartment office, and clenched my teeth knowing that means I’ll have one week to move out when I get back after my trip next month.

I think this is for the best. I hope this is for the best. I’ll be saving money, anyway. And given that the only way to ever be able to afford property is to live super cheaply now and save, save, save, well, that’s what I’m going to have to do. I just hope I can find some place decent to move.