Do I have to buy a house?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
mlipps
Posts: 895
Joined: Thu Jun 21, 2012 9:35 am

Re: Do I have to buy a house?

Post by mlipps » Tue Jul 24, 2012 3:03 pm

Super Hans wrote:It's great to see so many interesting viewpoints. I'll provide a bit more personal information to answer some of your questions. The dorm atmosphere is one of my biggest annoyances with my rental. Thankfully there's not a lot of noise, but the weekend party scene can occupy all the public areas and the resulting beer bottles and such can litter the common space for days afterwards. I feel I'm getting too old for this. A landlord could eliminate this by requiring a certain rent-to-income ratio and not allowing guarantors for purposes of the calculation. A corporate landlord runs the building. The lease contains severe penalties for early move-out plus a 60-day notice provision. The building is less than 10 years old and everything works fine. Besides my preference for wood floors over carpet (not only for aesthetic reasons, but also for allergies), the physical plant is fine. The washer and dryer en suite was a huge luxury when I moved in from the Upper East Side (where I was paying about 50% more in rent). I could use more space, but rent feels more like consumption than buying, so I'm resisting moving up to a bigger rental. I anticipate I'll stay another year. I can probably negotiate a rent concession of $1 or 2k for the year.

I "ain't from around here," as someone suggested. I don't have a car, which contributes to me not knowing the suburbs at all. I couldn't continue going carless if I moved out of my current neighborhood, so that's an expense that offsets a piece of my rent. Thus the luxury of living footsteps from work costs $2700/month - property tax - HOA fees/house maintenance - car insurance/parking/depreciation/fuel - the interest/investment opportunity cost - the intangible of having a small place. It's still a positive number and probably my biggest expense, but this thought exercise has made me feel better about the splurge. I can't fairly include commuting expenses, incidentally, because my employer covers the expense of a commute by Metro.

I actually had the opportunity to meet Professor Schiller a couple of months ago. I thought he would give me some great insight on my personal housing situation, but things stayed at a very academic level.
I live in Wheaton and don't have a car (although to be fair my boyfriend does). I think it's perfectly possible in many suburbs to get by w/o a car and still save money, especially if your employer would pay for the commuting costs. Now whether or not that, for you, makes up for the lost time is a whole different calculation. Not to mention the high MD taxes I pay.

Super Hans
Posts: 103
Joined: Sat Jul 14, 2012 9:18 pm
Location: Washington, D.C.

Re: Do I have to buy a house?

Post by Super Hans » Fri Mar 22, 2013 1:30 pm

Since this thread addressed a common board theme, I thought it would be useful to give an update.

Although I expected I would negotiate a ~$2k rent concession back in the summer and stay in the District, the rental building in Washington wouldn't budge at all. I gave notice and ended up moving to a brand new apartment in Arlington. It's slightly larger and the rent is $500/month lower. They also threw in a free month. There's a gym, and they've been putting out free K-cups (coffee) consistently. As an added bonus, Virginia income taxes are lower. I'm happy with the move, even apart from the savings. Among other things, It's nice to sleep in peace and quiet. Meanwhile, the old landlord ended up renting my apartment for less than they demanded of me and only after having the place vacant for a few months. I curse Metro daily, but it's not that bad: very short walks on either end of the journey, and about 10 minutes on a train. I still have no need for a car. Grocery stores and restaurants are actually closer than before, and it's rare to see bums on the walk there.

I thought of this thread after reading the "What You Get for ... $800,000" in Wednesday's New York Times. They feature a $775k condo in Kalorama (D.C.). After thinking we might be happy in such a place, I noticed the monthly condo fees and taxes add up to $1975. That's pretty close to my current payment -- except I get to keep my $775k in the bank/AA. My last electric bill was under $20, and the landlord-required renters' insurance cost less than $100 for the year lease term. Also, it's a little comforting to be a renter as this sequester nonsense plays out -- and on a local level, as we see how the newly-approved Arlington homeless shelter works out.

I've discovered a lot of nice houses in Virginia within walking distance of Metro (along the lines of NoVa Lurker's advice) that may be tempting in the long-run if my family grows. In the meantime, I need to figure out what percentage of my cash should be in my AA versus a future housing fund (or if all should be in the AA but the risk profile should be lower since I don't own a place to live yet).

Honobob
Posts: 992
Joined: Sat Sep 26, 2009 7:43 pm

Re: Do I have to buy a house?

Post by Honobob » Sat Mar 23, 2013 7:02 pm

Super Hans wrote:Since this thread addressed a common board theme, I thought it would be useful to give an update.

Although I expected I would negotiate a ~$2k rent concession back in the summer and stay in the District, the rental building in Washington wouldn't budge at all. I gave notice and ended up moving to a brand new apartment in Arlington. It's slightly larger and the rent is $500/month lower. They also threw in a free month. There's a gym, and they've been putting out free K-cups (coffee) consistently. As an added bonus, Virginia income taxes are lower. I'm happy with the move, even apart from the savings. Among other things, It's nice to sleep in peace and quiet. Meanwhile, the old landlord ended up renting my apartment for less than they demanded of me and only after having the place vacant for a few months. I curse Metro daily, but it's not that bad: very short walks on either end of the journey, and about 10 minutes on a train. I still have no need for a car. Grocery stores and restaurants are actually closer than before, and it's rare to see bums on the walk there.

I thought of this thread after reading the "What You Get for ... $800,000" in Wednesday's New York Times. They feature a $775k condo in Kalorama (D.C.). After thinking we might be happy in such a place, I noticed the monthly condo fees and taxes add up to $1975. That's pretty close to my current payment -- except I get to keep my $775k in the bank/AA. My last electric bill was under $20, and the landlord-required renters' insurance cost less than $100 for the year lease term. Also, it's a little comforting to be a renter as this sequester nonsense plays out -- and on a local level, as we see how the newly-approved Arlington homeless shelter works out.

I've discovered a lot of nice houses in Virginia within walking distance of Metro (along the lines of NoVa Lurker's advice) that may be tempting in the long-run if my family grows. In the meantime, I need to figure out what percentage of my cash should be in my AA versus a future housing fund (or if all should be in the AA but the risk profile should be lower since I don't own a place to live yet).
Good Luck with your plan. http://realestate.aol.com/blog/2013/03/ ... d%3D288187
It's slowly dawned on me that we won the real estate lottery!

Honobob
Posts: 992
Joined: Sat Sep 26, 2009 7:43 pm

Re: Do I have to buy a house?

Post by Honobob » Sat Mar 23, 2013 7:13 pm

http://www.neighborhoodscout.com/dc/was ... -st/#rates Couldn't find Kalomara but this looks VERY good. You do realize that you don't have to take ALL your $775,000 out of the bank that's earning <!% to get an asset that's earning double digit ROE?

PS How much did that move COST YOU?
It's slowly dawned on me that we won the real estate lottery!

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