Author Topic: Buy, rent, or have roommates?  (Read 6887 times)

implet

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Buy, rent, or have roommates?
« on: May 01, 2013, 11:41:19 AM »
My boyfriend and I are moving to Mass this summer. He is starting a two year grad school program and I'm looking for a new job in the area. We have no debt and his schooling is already paid for. We definitely want to live within walk/bike distance of his school.

We're trying to figure out whether we should buy a condo, rent, or have roommates. I would hate having roommates and I think it would still cost us around $1000 and probably an extra amount for a storage unit for some of our furniture. A small one bedroom apartment in the area seems to run around $1700+. Small condos from my quick research on zillow are 250k-300k.

We would sell his motorcycle for about 5k and his car for 8k.

What would you do? Right now we think the roommate option is the most mustachian, but we both cringe at the thought.
« Last Edit: November 03, 2013, 08:04:02 PM by implet »

tongzhi

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Re: Buy, rent, or have roommates?
« Reply #1 on: May 01, 2013, 12:03:15 PM »
Sounds like the price/rent ratio is reasonably favorable (price is 12-15x annual rent) , if you are going to stay at least a couple years it may be worth it to buy.

If the sound of roommate(s) makes you cringe, don't do it. In my personal experience roommates have always made me unhappy, living with someone is a big undertaking and it's not for everybody. If I wanted a roommate to share the housing costs or help pay my mortgage, I'd get a 2-plex and rent out half of it or one level of a 2-level house. But not share a living space/kitchen/bathroom. Been there done that waaaay too many times and it's never satisfying. But I can only speak for myself!

implet

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Re: Buy, rent, or have roommates?
« Reply #2 on: May 01, 2013, 12:11:45 PM »
I've always imagined my first real estate purchase to include a rental unit. I never liked the idea of buying a condo because I'd ideally want a free standing house... And 2 bedrooms. The prices I quoted for the condos in that area are for 0-1 and are tiny. Is there a consensus here about whether it's a good/bad idea to dump most of your money into a down payment?

icefr

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Re: Buy, rent, or have roommates?
« Reply #3 on: May 01, 2013, 12:18:39 PM »
This scares me a bit, for a few reasons:

1) I personally would never buy real estate with someone I'm not legally married to.
2) You guys are moving there for a two year grad program. What if your boyfriend gets a job somewhere else after the program is up? What if he does an internship between the two years?
3) I personally would never buy a condo that has fewer than two bedrooms. (More life flexibility)
4) Between the two of you, you only have $35k in cash. (I wouldn't touch 401(k) or IRA money for a down payment.) That's a 20% down payment on a $175k condo without leaving you any spare cash.
5) Mortgage lenders don't usually like people who just changed jobs recently.

Personally, I would rent without roommates for the duration of his grad program and build up some more assets. Then once he's done the grad program, re-evaluate and consider buying a place.

tongzhi

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Re: Buy, rent, or have roommates?
« Reply #4 on: May 01, 2013, 12:25:31 PM »
Does your boyfriend have income when he's in grad school? What's the likelihood of you losing your job, and how long would it take you to find a new one if that happened?

Would your guys' families bail you out if you were in a crunch?

implet

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Re: Buy, rent, or have roommates?
« Reply #5 on: May 01, 2013, 12:35:38 PM »
Icefr, your points 2, 3, and 4 also worry me a bit. I didn't know about point number 5. He thinks he will be able to find employment in Boston, or any other city, after he graduates, but I obviously worry about the chance that doesn't happen! Also, I considered that 26k in a vanguard account to be money I could use toward a down payment as well.

I'd definitely prefer renting alone and building more assets during the two years, but with the rental prices for one bedrooms, I worry there won't be much saving happening!

Tongzhi, he won't have an income during grad school. He might tutor on the side for some extra income, but we're not banking on it. I think I'd be able to find work in Boston fast I'd I had to and wasn't picky. Our families could help us if we really needed it, but I know we'd both hate to ask.

Done by Forty

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Re: Buy, rent, or have roommates?
« Reply #6 on: May 01, 2013, 01:25:15 PM »
I'd find a roommate situation for the 2 years and use the savings to build up more cash for your eventual home/duplex purchase.   But I agree that buying at this stage seems risky: the transaction costs make make it a net loser, and you don't want your home to be an anchor to your mobility 2 years from now.  Suppose home prices go down in the next 2 years.   A short sale could take a long time and any assets you have in the bank would be a hurdle to clear in that process.

ScottEric

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Re: Buy, rent, or have roommates?
« Reply #7 on: May 01, 2013, 01:40:28 PM »
I'd rent without room mates, if you have some flexibility around location there are some better deals in different areas of Cambridge, Kendall square at least used to be cheaper, Central square can be less sometimes too.  A lot of students end up in Jamaica Plain, even folks from MIT and Harvard.  Personally I love JP, but it's no longer as cheap as it used to be.


limeandpepper

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Re: Buy, rent, or have roommates?
« Reply #8 on: May 01, 2013, 07:48:42 PM »
If you are by yourself I'd say share with housemates (NOT roommates) but since it's the two of you and you despise the thought of living with other people, I think it's okay to get a one-bedroom as technically that means you're still sharing and splitting rent, just that it's with each other instead of with strangers.

cynthia1848

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Re: Buy, rent, or have roommates?
« Reply #9 on: May 02, 2013, 10:53:30 AM »
I would rent for the duration of his program, then figure out what to do.  Which school is he going to?  Depending on where school will be, willingness to take public transport, etc., there are options in Allston, different areas in Cambridge, Somerville, etc.

Bearded Man

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Re: Buy, rent, or have roommates?
« Reply #10 on: November 16, 2015, 02:40:01 PM »
Update, OP?

JLee

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Re: Buy, rent, or have roommates?
« Reply #11 on: November 16, 2015, 03:16:51 PM »
Update, OP?

Last Active: March 17, 2014, 08:28:40 AM

Probably no updates for us. :(

Bearded Man

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Re: Buy, rent, or have roommates?
« Reply #12 on: November 16, 2015, 04:11:38 PM »
Update, OP?

Last Active: March 17, 2014, 08:28:40 AM

Probably no updates for us. :(
Was gonna suggest, maybe live in an RV. More accepted when people realize it's temporary. Plus much cheaper than owning or renting for 2 years.

JLee

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Re: Buy, rent, or have roommates?
« Reply #13 on: November 17, 2015, 09:17:21 AM »
Update, OP?

Last Active: March 17, 2014, 08:28:40 AM

Probably no updates for us. :(
Was gonna suggest, maybe live in an RV. More accepted when people realize it's temporary. Plus much cheaper than owning or renting for 2 years.

That seriously crossed my mind when I moved to AZ a few years ago.

Bearded Man

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Re: Buy, rent, or have roommates?
« Reply #14 on: November 17, 2015, 09:31:47 AM »
Update, OP?

Last Active: March 17, 2014, 08:28:40 AM

Probably no updates for us. :(
Was gonna suggest, maybe live in an RV. More accepted when people realize it's temporary. Plus much cheaper than owning or renting for 2 years.

That seriously crossed my mind when I moved to AZ a few years ago.
Shit I think about it NOW. 10k for a good RV. Very much like an apartment. I visited a few dealerships to look around a couple years ago. It's part of my backup plan to my backup plan if I fall on hard times. (I'm a planner....)

frugaliknowit

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Re: Buy, rent, or have roommates?
« Reply #15 on: November 17, 2015, 09:46:44 AM »
I would never buy in an area that is new to me.  I would also make sure I were planning to stay put for 10 years or more.

JLee

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Re: Buy, rent, or have roommates?
« Reply #16 on: November 17, 2015, 09:51:22 AM »
Update, OP?

Last Active: March 17, 2014, 08:28:40 AM

Probably no updates for us. :(
Was gonna suggest, maybe live in an RV. More accepted when people realize it's temporary. Plus much cheaper than owning or renting for 2 years.

That seriously crossed my mind when I moved to AZ a few years ago.
Shit I think about it NOW. 10k for a good RV. Very much like an apartment. I visited a few dealerships to look around a couple years ago. It's part of my backup plan to my backup plan if I fall on hard times. (I'm a planner....)

I'm right next to NYC now (I see the Empire State Building from my commute) so an RV isn't very practical, but it's still a consideration for when I end up leaving this area.  I'm renting my house in Phoenix, so if I do end up back in AZ for work (which I would prefer, honestly) I may go back to that plan. : )

clarkfan1979

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Re: Buy, rent, or have roommates?
« Reply #17 on: November 17, 2015, 10:00:42 AM »
I would rent without roommates. You are two people, so sharing a small 1 bedroom would be the best option. The really small ones will be much cheaper because less people want to live in them.

My wife and I are currently in a 400 square foot studio. I will admit, it is a little small for our taste, but we are figuring it out. I think a realistic upgrade to get everything we want would be a 500 sq. ft. 1-bedroom.

I have never lived by myself which has helped reduce the cost of living. I have always had roommates and transitioned into living with my wife. This has helped me tremendously. I have acquaintances that claim "I can't do the roommate thing" However, they work a lot and have very little savings.