Author Topic: Fork in Road: family growing, Buy further away or keep renting close?  (Read 4041 times)

speedystache

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My wife and I have a toddler and another baby due in October.  We have been in a 1 Bedroom apartment ($1500 a month, very low for our area, "nice places" are around 2,500 to 3k for a 1bedroom) for many years, and live in a very expensive area.  We'd like to have more space.  My job is the only thing keeping us here.  We are in need of a larger place to live, but 2BRoom rentals go for about $2000-2400 a month (for same "quality" of our current place).  We are looking into purchases as well, but that will require at least 80K down payment and a mortgage (principle/taxes/interest) of about $2500.  (this is our max we have set for ourselves to return ~15% of my income per month to savings.) 

we have no debt, max my 401k, and have put 10K into a 529 for our child the past two years....

My question is.  Do we keep renting in this expensive area, and never buy a home, or jump in, buy a home that's further away and would require a 2nd car, and sell it when we get our savings to a point we can start making money off of the (average) 7% it would make in stocks?  and move to a cheaper area, with new or (hopefully) no jobs...

I feel like we are on the cusp of a decision that could either make or break us from retiring earlier than 65!!!

I'd be interested in general advise on these types of situations, if you need to know more about what money's we have were to make an official call I can update this main post.

Thanks!

GetSmart

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Re: Fork in Road: family growing, Buy further away or keep renting close?
« Reply #1 on: March 17, 2014, 04:04:48 PM »
I would encourage you to be extremely creative about your current digs and sit tight for awhile - at least until you have the down payment + closing costs + some more for minimum house setup - give yourself a time frame for this to occur.  There are tons of great ideas at ikea for making great use of small spaces.  For what it's worth I know someone who had two kids in a 1BR apt until kids were 4 and 6 yo. and the mom worked at home during naptime - 3rd floor walk up and no laundry in building.  They just set their sights on the bigger picture further down the road and eventually got there.  You might be able to do the same if you think about things from a different angle. 

mxt0133

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Re: Fork in Road: family growing, Buy further away or keep renting close?
« Reply #2 on: March 17, 2014, 05:11:05 PM »
I'm currently renting in a 650sf 1 br in SF with my wife and two kids, a 3 and 1 year old.  So far we are doing fine.  We don't entertain as many guests as we would like in our place, so we use the public spaces available in our complex.  My thinking is we live in the heart of the city and we can utilize the public spaces.  We go to the library, parks, cafe's ect,  and we don't spend necessary have to spend money as everything is within walking/biking distance.

We are very creative with our space, lots of wall shelves, wall mounted bike racks, no large furniture other than beds.  We have gotten good a getting rid of unnecessary or single purpose things.  You would be surprised at what you can do with small spaces if you are efficient.

I don't know how long it will last but we initially taught that we needed a two bed room when my wife was pregnant with our first child but we just made it work because we love our current location so much.


HairyUpperLip

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Re: Fork in Road: family growing, Buy further away or keep renting close?
« Reply #3 on: March 17, 2014, 08:02:23 PM »
Tough it out. even though I'm not a huge ikea fan I do argue they offer a lot of creative solutions.

I bet a little bit of money and a small "remodel" could really revive your place.

good luck either way.

speedystache

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Re: Fork in Road: family growing, Buy further away or keep renting close?
« Reply #4 on: March 17, 2014, 08:44:17 PM »
Thank you for all your replies - staying put would be a bit tough on our sanity, but we might just tough it out. I started writing a case study to provide more details (before I received your replies), so I'll probably post that still - but you've definitely given me some things to think about.

mxt0133 - I agree with the idea of making better use of wall space. That's something we could definitely do better right now. It actually sounds like a kind of fun challenge to see if we could design this apartment to work... but then I think about our angry downstairs neighbor who bangs at us every time our daughter moves!

flostache - The idea of the convertible couch is a really interesting idea to me. For the closet, though - I can't even stand in my closet, so we wouldn't be able to put a crib in there, haha!

Thegoblinchief

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Re: Fork in Road: family growing, Buy further away or keep renting close?
« Reply #5 on: March 19, 2014, 07:17:58 AM »
Start putting money into a more liquid investment vehicle just in case, but I'd stick it out and see how everyone adapts. Avoid single-purpose furniture like changing tables (kitchen table, countertop, or the top of a low dresser all work great).

Avoid big cribs, etc. Look at bassinet size sleeping for the newborn, even the box bed popularized somewhere in Europe, I think Denmark or Sweden?

For adult beds, futon, roll up mattress, or a DIY Murphy bed are all good ideas.

Realize that any choice for extra space is YOUR choice, not the kids. Kids don't care how big their play area is and can get along with very little quite happily.

speedystache

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Re: Fork in Road: family growing, Buy further away or keep renting close?
« Reply #6 on: March 20, 2014, 07:08:29 PM »
All very good points. We would definitely do all of that if we stay here. I think the main two things we don't like about our current place is that we wish we had some outdoor green space for our 3 year old to explore and enjoy, and the thing that actually bugs me most is our downstairs neighbor! They bang at us whenever our toddler walks or runs around and it's driving me crazy. Not much we can do about it, though, as there are no 1st floor units available. They know we have a toddler, so it's not just a misunderstanding. We just don't like the way it makes us feel, but not sure if it's worth $500/month to is to fix (the other apartment is ground level).

Maybe if we really can't stand it we could compromise and move a little farther away from work, but save on rent (would be about what we're spending now). The commute expense would go up by about $100/month but at least it's less than $500/month. We would have to drive more for errands, since we're in an urban area now and can walk to get to most things, but maybe it would be worth it overall. We clearly still have things to think about!! Thanks for all of your replies!

mxt0133

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Re: Fork in Road: family growing, Buy further away or keep renting close?
« Reply #7 on: March 21, 2014, 09:08:36 PM »
Sorry to hear about your neighbors.  I been there my wife used to go crazy about what some of our neighbors used to do.  My strategy for this was to kill them with kindness.  So if they are bothered by your toddler I would bake a cake or some other goodies and let them know that you apologize for the noise that your toddler makes.  The idea is to try to let them know that you are trying your best and are empathetic to their situation.  Maybe the'll think twice about banging next time your toddler walks around.  Kind of hard to get mad at someone that you have 'broken bread' with.

Really they are bothered by your toddler walking around?  They must go bonkers when you and your wife walk around. 

Also reconsider about moving farther away and extending your commute and read this first http://www.mrmoneymustache.com/2011/10/06/the-true-cost-of-commuting/.

speedystache

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Re: Fork in Road: family growing, Buy further away or keep renting close?
« Reply #8 on: March 22, 2014, 07:46:11 PM »
Well, in our neighbor's defense, our toddler is a little heavy-footed when walking. We do try to mention practicing quiet walking, but at the same time it drives me nuts that we feel we can't let her just run around the house a little if she feels like it. We used to smile and say hi whenever we see our neighbor (it was never returned!), but neither us or him has ever actually brought up the noise or the banging. That would be a good first step.

Thanks for the link to the article. It definitely brought up some good points. I don't feel that biking is for me, especially with my level of riding (practically none!), and the road to work (highway or narrow, non-shoulder are the two options), it's just not something I feel comfortable doing right now. But we do definitely take into account how much more the commute would cost to go an extra 15 minutes each way, plus the extra time away from the family.

Right now I think we're leaning toward trying to find a 2 bedroom apartment in the area for close to what we're paying now. In the meantime we'll hole up here and see how it goes once the new baby comes!

momo5

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Re: Fork in Road: family growing, Buy further away or keep renting close?
« Reply #9 on: March 22, 2014, 08:55:16 PM »
I vote with the 'stay put' people.
I hear your concern about sanity, what I do in cases like these, I tell myself I will tough it out for one year and then reconsider if I need to. this way you buy yourself time without feeling locked into a potentially bad situation, this gives you time to adjust and by the time one year comes around you might realize that its not as bad as you feared it would be.

speedystache

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Re: Fork in Road: family growing, Buy further away or keep renting close?
« Reply #10 on: March 23, 2014, 08:28:58 AM »
That's a great way to think. We won't know if it really doesn't work for us if we don't try, right?