Rental Increase - To Move Or Not To Move

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Confused
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Rental Increase - To Move Or Not To Move

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Grt2bOutdoors
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Re: Rental Increase - To Move Or Not To Move

Post by Grt2bOutdoors »

To answer your question, you have to look at area demographics. If you are in a high economic growth area, I'd say it would be easy. If it were low, it might be a litle more difficult. Not sure what rents on average go for in your locale, but both of those numbers sound cheap, even with a 4.5% rental increase.

As for purchasing the home in near future, I would not advise you to be looking to buy a home with a potential income decline in the near term. If you think things are tight paying $575 or $550 a month for rent, can you imagine what paying a mortgage will be like? Search some of the threads on buying homes and the associated costs, $26K is a good amount of savings, but it will not cover downpayment, e-fund, repairs, closing costs and all the other things that come with a home.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
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tyrion
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Re: Rental Increase - To Move Or Not To Move

Post by tyrion »

I will just echo the comment that if you're concerned about a $25/month rental increase then house ownership is not something you are ready for. We have owned our relatively simple (single story, mild climate) house for 12 years, and have had a number of unexpected expenses from $100 up to thousands.
mackstann
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Re: Rental Increase - To Move Or Not To Move

Post by mackstann »

$25/mo does not seem worth moving for, even at an income of 30k or 40k per year. I'm surprised at your employment situation. The software industry seems VERY hot right now, and outright desperate for people, with a good outlook for the future too. Without knowing any more about you, I don't understand why you can't easily make 50k+ just by yourself?
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Confused
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Re: Rental Increase - To Move Or Not To Move

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TA_Lurker
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Re: Rental Increase - To Move Or Not To Move

Post by TA_Lurker »

I would not move into the basement for $25/mo. I would be concerned that pests are more likely to be found in the basement because it's nearer to their entry-points in the foundation. I would also wonder about the noise - how far are the apartments from the heating and plumbing equipment, or the common laundry area...

My property company said they are raising the rent $15 this year. It's the first raise in several years. I'm tempted to try and negotiate it back to the original rent. $15 x 12 = $180, surely it must cost them more than $180 to find another tenant.
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englishgirl
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Re: Rental Increase - To Move Or Not To Move

Post by englishgirl »

Do you have to renew your contract every year? If by staying you could go to a month-to-month lease then the added flexibility that would bring you (as far as being able to move whenever you closed on a house, or if you want to take a new job elsewhere) would be totally worth $25 a month. As it is, NOT having to go through the hassle of moving for $25 a month is totally worth it to me anyway.

Moving is a hassle, and let's say you're still in the same building next year. Presumably the rent will go up by $25 on both the apartment you're in AND on the basement apartment. Then where do you move to? I'd stay put if I were you.
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neurosphere
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Re: Rental Increase - To Move Or Not To Move

Post by neurosphere »

Stay where you are. The stress to savings ratio in this situation is WAY too high (in my opinion, of course!) to consider moving. One part of being a "super saver" is the saving part, which you are doing of course, and looking to continue to do by moving to a cheaper place. But the OTHER half of being a 'super saver" is the FLEXIBILITY which comes with having so much dang positive cash flow relative to salary and expenses. And in this case, that flexibility should be used to stay put, and worry about other things, but not a 5% increase in the rent.

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sscritic
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Re: Rental Increase - To Move Or Not To Move

Post by sscritic »

Confused wrote: We only make $50k, but that's swimming in money for us (2011 combined income was $24,000 pre-tax; 2010 combined income was $9,900 pre-tax).
If $50k is swimming, why is $40k drowning?
our combined income could easily drop to under $40,000.
Is it the $40k or the under that has you hesitating?
yb
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Re: Rental Increase - To Move Or Not To Move

Post by yb »

What expenses make up the additional $1250 a month? I'm sure if you look at those numbers, you could find ways to save a lot more than an extra $25 a month. Many people make much less than you two and manage to afford much higher rent. Stay where you are, spend your extra time finding new employment options.
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Re: Rental Increase - To Move Or Not To Move

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Re: Rental Increase - To Move Or Not To Move

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Grt2bOutdoors
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Re: Rental Increase - To Move Or Not To Move

Post by Grt2bOutdoors »

Generous, perhaps you can cut back $25 from charitable good works and apply it to keeping roof over head. Just a suggestion.
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tyrion
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Re: Rental Increase - To Move Or Not To Move

Post by tyrion »

Confused wrote:
Our monthly expenses break down as follows (with a little variation, of course):

Rent: 550
Gas and Electric: 55
Cell Phone: 35
Internet: 40
Groceries: 175
Gasoline: 140
Catastrophic Insurance: 70
Auto Insurance: 28
Charitable Contributions: 325
Entertainment: 15
Clothes: 15

Beyond that, there just miscellaneous stuff like toiletries, car repairs, cleaning supplies, random stuff like that.

Wow, I think I would do something to even out the two bolded categories. Although I suspect this is a religious requirement and discussion of reducing it is a non-starter.
PowDay
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Re: Rental Increase - To Move Or Not To Move

Post by PowDay »

As someone who spend 3 years in a 300sqf basement apt, it's not worth saving $25 a month.

The lack of light will make you less happy, increased possibility for moisture/mold, increased possibility for mice/bug problems.

Moving apartment even in the same building, will essentially cost you a day packing, a day moving, and a day unpacking. And no one has ever moved apartments without being temped into spending a little cash to replace something, or get new decorations.
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Re: Rental Increase - To Move Or Not To Move

Post by Mudpuppy »

Confused wrote:
mackstann wrote:Without knowing any more about you, I don't understand why you can't easily make 50k+ just by yourself?
Well, that's mostly because I suck and don't have any marketable skills. I do not know how to do object-oriented programming, only procedural programming, which pretty much went out of fashion many years ago. I also don't have a computer-related degree, just a BS in Business Management, which has been absolutely useless. Graduated in 2008 and proceeded to get a job in a tech support industry making less than the student job I had before that. Every job I've had, aside from this one, has been either tech support or telemarkeing - so either taking calls from angry people or making calls to angry people. I'm just glad to be off the phones.
Don't sell yourself short. Procedural programming has its place in operating systems programming, core network programming, embedded systems, and other venues where the overhead of object-orientation just isn't worth it. Plus, if you know a procedural language like C, you can teach yourself in your spare time about object-oriented languages like C++, C#, Java, and Objective C. There is of course new syntax, but they're all part of the same "family", so there is a lot of reused syntax. Tinker with it. Learn how to code a game or a smartphone app (Java is used frequently for Android apps and Objective C for iPhone apps).

So do a little self-taught programming. Get involved with some open-source projects that use the procedural language(s) you already know. Try your hand at app programming. If you just get a few self-taught skills under your belt, and you are confident about your skills in a job interview, no one is going to care what sort of degree you have in most of the tech circles. You may also want to think bigger, such as searching for jobs in other towns where there are more prospects for your skills (and likely more prospects for your spouse's skills too). If your current location does not have many jobs in either of your skill areas, you really don't want to be buying a house there until you at least spend a little time looking elsewhere for jobs that will lead to better careers for both of you.

Edit: Fix typo
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Watty
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Re: Rental Increase - To Move Or Not To Move

Post by Watty »

Confused wrote:
mackstann wrote:Without knowing any more about you, I don't understand why you can't easily make 50k+ just by yourself?
Well, that's mostly because I suck and don't have any marketable skills. I do not know how to do object-oriented programming, only procedural programming, which pretty much went out of fashion many years ago. I also don't have a computer-related degree, just a BS in Business Management, which has been absolutely useless. Graduated in 2008 and proceeded to get a job in a tech support industry making less than the student job I had before that. Every job I've had, aside from this one, has been either tech support or telemarkeing - so either taking calls from angry people or making calls to angry people. I'm just glad to be off the phones.

My spouse also got a BS, in Public Health, but took a job working an engraving machine making nametags. Also for less pay than my last student job. I see people on this board posting that they make upwards of $100k doing whatever they do, but I don't know where those jobs are nor how to get them. But I digress.
I don't make that much but one of the things I have done is to move around the country, in part for better job opportunity.

If those are the best jobs that you can find in your area with your backgrounds then it would be good to consider moving to an area with better opportunities.

Here is a list of the unemployment rates by state;
http://www.bls.gov/web/laus/laumstrk.htm/
Muchtolearn
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Re: Rental Increase - To Move Or Not To Move

Post by Muchtolearn »

OP, there are two no brainers in my opinion. First, do not move. $25 is trivial compared to all the stresses you indicated and the cost of moving. Second, do not even consider a house with your unstable income plus a little hint: if the thought of an additional $25 per month for ANYTHING even penetrates your thought process, you are in no way prepared to buy a home. Those expenses come weekly and sometimes in very big chunks when you buy a house, especially a low priced one. Good luck.
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Re: Rental Increase - To Move Or Not To Move

Post by Niko »

If you are putting away $2,000/month and looking at houses in the $120,000 range, why not stick it out for a few years in the apartment and save like crazy? After 2 more years you can put 50% down (freeing up many more options) and after only 4 more years you could pay cash for the same house.
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SnapShots
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Re: Rental Increase - To Move Or Not To Move

Post by SnapShots »

I think OP is puttin' you guys on. Really?! This thread is about a $25/mo increase in rent vs buying house. Not serious. :wink:
the best decision many times is the hardest to do
jbmitt
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Re: Rental Increase - To Move Or Not To Move

Post by jbmitt »

I think at this age it's normal to dwell on the rent increase. I added a now 70lb black lab to my household in January. The landlord wanted an extra $250 security deposit and $30/month. I was annoyed about it initially, but it's a small price for happiness. It's also easy to get the tunnel vision of 'what do I have to show for the rent?' I love the flexibility of being month-to-month and don't want the ownership hassles of 'playing house' as a single 20-something.

I agree with others, I'd look at my entertainment and clothing budgets. There is balance of saving every penny and doing some living.
ddunca1944
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Re: Rental Increase - To Move Or Not To Move

Post by ddunca1944 »

I'd stay where you are, continue saving, and start looking for a house in about 9 months. You'll have more saved and a bigger cushion, therefore more options.
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SnapShots
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Re: Rental Increase - To Move Or Not To Move

Post by SnapShots »

jbmitt wrote:I think at this age it's normal to dwell on the rent increase. I added a now 70lb black lab to my household in January. The landlord wanted an extra $250 security deposit and $30/month. I was annoyed about it initially, but it's a small price for happiness. It's also easy to get the tunnel vision of 'what do I have to show for the rent?' I love the flexibility of being month-to-month and don't want the ownership hassles of 'playing house' as a single 20-something.

I agree with others, I'd look at my entertainment and clothing budgets. There is balance of saving every penny and doing some living.
If your worried about a $30 rent increase don't buy a house. There's a thing called property taxes and insurance and they go up every year. As a landlord I would have been more than a little annoyed you bought a 70lb black lab. Lucky he didn't make you move and only charged a deposit and increased the rent. However, I'm sure you got permission first. :annoyed
the best decision many times is the hardest to do
ddunca1944
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Re: Rental Increase - To Move Or Not To Move

Post by ddunca1944 »

As a landlord I would have been more than a little annoyed you bought a 70lb black lab. Lucky he didn't make you move and only charged a deposit and increased the rent. However, I'm sure you got permission first.
Our rental contract with renters specifies any pets when they move in. Name, breed and there is a $500 pet deposit (fully refundable if there is no pet damage). The contract also specifies that if the tenant obtains a pet without permission, it is grounds for canceling the lease.
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Re: Rental Increase - To Move Or Not To Move

Post by interplanetjanet »

Watty wrote:I don't make that much but one of the things I have done is to move around the country, in part for better job opportunity.

If those are the best jobs that you can find in your area with your backgrounds then it would be good to consider moving to an area with better opportunities.
I want to second this. I spent 12 years moving around the country, honing my skills and advancing at different jobs, before finally moving back to the area I grew up in. I think this did more for my career than anything else.
Confused wrote:Well, that's mostly because I suck and don't have any marketable skills. I do not know how to do object-oriented programming, only procedural programming, which pretty much went out of fashion many years ago. I also don't have a computer-related degree, just a BS in Business Management, which has been absolutely useless.
My greatest programming area of expertise is procedural programming. I never finished college. I made quite a niche for myself for a while doing things like OS kernel crash forensics - this requires a good grasp of OS internals, but can be very lucrative (it's not a heavily peopled field these days). These days I do more IT architecture, and what's important for that is a broad base of knowledge combined with the ability to learn quickly when it's necessary.

I thought I'd topped out in my career by my late 20s, but that couldn't have been further from the truth. Keep looking for opportunities and spend extra time honing your skills, it really does pay off.

-janet
MrMiyagi
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Re: Rental Increase - To Move Or Not To Move

Post by MrMiyagi »

You sound like you're doing fine financially. Why go through the headache of moving just to save 300/yr...
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Re: Rental Increase - To Move Or Not To Move

Post by TomatoTomahto »

interplanetjanet wrote:I thought I'd topped out in my career by my late 20s, but that couldn't have been further from the truth. Keep looking for opportunities and spend extra time honing your skills, it really does pay off.
Ditto. Never learned an OO language, but knew VMS internals (a great OS in its time). Learned other operating systems also Learned how to explain technology to business users. Learned how to allocate IT costs transparently and equitably to the business users. I made a considerable amount of money, and had quite a good time, without ever using OO.
I get the FI part but not the RE part of FIRE.
bberris
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Re: Rental Increase - To Move Or Not To Move

Post by bberris »

Thats a lot of money for catastrophe insurance. What sort of cat are you expecting? Or do you have some valuable object? When I was a homeowner I think I paid less than that to insure my house?

I would shop around for renters insurance if you really think you need it.
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Confused
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Re: Rental Increase - To Move Or Not To Move

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