Author Topic: Single with good income, where to live...  (Read 7007 times)

FuckRx

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Single with good income, where to live...
« on: August 18, 2013, 10:16:33 AM »

I'm single and take home a little under 200k/yr....
I have 150k in student loans...3% interest....
I just bought a 450k condo (a pre-mustachian decision) with a 3600/mo payment (including everything)...4% interest rate...
To be mustachian, should I sell it? should I keep it and work on paying it off? Should I rent a small place instead?

thanks

cats

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Re: Single with good income, where to live...
« Reply #1 on: August 18, 2013, 10:44:00 AM »
Would taking a roommate on at your condo be an option?  Is the condo otherwise in a good location for you in terms of getting to work, social activities, etc?

If the condo is a good set-up (finances aside), looking for a roommate seems like the easiest solution to me.

FuckRx

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Re: Single with good income, where to live...
« Reply #2 on: August 18, 2013, 11:07:30 AM »
It does have an extra bathroom and bedroom so that certainly would be an option....
my hours are unconventional so it will make it hard but I'm sure I could find a way around that...

totoro

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Re: Single with good income, where to live...
« Reply #3 on: August 18, 2013, 12:11:38 PM »
That is a high monthly payment for the loan amount.  What is the strata fee/taxes part?  Are you in an area where this unit will hold its value or appreciate?  Can you get what you paid for it if you sold it?   Might be cheaper for you to rent - have you done the math? Difficult to know without knowing your market.

FuckRx

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Re: Single with good income, where to live...
« Reply #4 on: August 18, 2013, 12:27:50 PM »

Yes the units are in a desirable part of town, easy to rent out for about 2900 and I would expect to see appreciation.
There is a HOA fees, there is taxes of course at 1% and there is the mortgage insurance because I didn't put enough down. If I kept it the plan would be to put enough down to get rid of that mortgage insurance by refinancing.

totoro

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Re: Single with good income, where to live...
« Reply #5 on: August 18, 2013, 12:36:20 PM »
So you would lose $700/month by renting out?  This would not be a great move - or does that $3600/month include utilities that would be paid for by a tenant that even the numbers? 

What can you rent something adequate for if you sold?  Would a room-mate pay $1500/month to you if you stayed?

 

FuckRx

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Re: Single with good income, where to live...
« Reply #6 on: August 18, 2013, 01:36:38 PM »
The payment of 3550 is 600/mo of HOA dues, about 430/mo of mortgage insurance, property tax comes out to 400/mo, insurance is about 30/mo, mortgage payment is about 2100/mo.....I am not including water/heat/electricity/Wifi.... (purchase price was 455,000)

I could charge about 1000-1200/mo for a roommate....

This same condo was up in the 600's before the market crashed...
I bought it April and the value right now should be about 470K according to my realtor's comps...
I don't think it will rise this quickly in the future but it's at the very top of a building with many amenities so it should go up to about 550-600 in the next 10 years...

I could refinance and get rid of the mortgage insurance, but I would have to put some major cash down which I am open to....
that would free up 430/mo...

FuckRx

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Re: Single with good income, where to live...
« Reply #7 on: August 18, 2013, 01:43:56 PM »

I was off a little...
here is the exact details from my statement:

Principal and Interest  2,069.01
Taxes (based on present information)  473.96
Hazard Insurance  48.75
Mortgage Insurance  493.96
TOTAL MONTHLY MORTGAGE PAYMENT:  $  3,085.68

totoro

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Re: Single with good income, where to live...
« Reply #8 on: August 18, 2013, 03:24:09 PM »
I think there are better places to invest your money.  This one seems quite expensive relative to equity/appreciation.  If you are going to stay I would get a room-mate.  I don't know your market well so can't comment otherwise.

Rebecca Stapler

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Re: Single with good income, where to live...
« Reply #9 on: August 18, 2013, 04:24:36 PM »
How much would a realistic rent be for you, if you sold it?

I would weigh a few years' rental costs plus selling costs (less any realistic appreciation) versus the cost, over the same amount of time, of keeping it and having a roommate, plus add appreciation as it stands right now (I would not consider what you hope it to be selling for in 10 years).

FuckRx

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Re: Single with good income, where to live...
« Reply #10 on: August 19, 2013, 11:16:27 AM »

I can rent a studio for myself for about 950-1000/mo.
So from what I gather it's better to sell it and save up and buy again when I'm ready to own my own property, correct?
I mean for one person I don't really need that expensive of a property.
It will take me a long time to pay that off.
If I get rid of the PMI I would still owe 3,000/mo, that's a lot of payments.

totoro

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Re: Single with good income, where to live...
« Reply #11 on: August 19, 2013, 12:27:57 PM »
In my view you are better off selling and renting and investing the difference.

TrulyStashin

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Re: Single with good income, where to live...
« Reply #12 on: August 19, 2013, 03:21:24 PM »
Check your HOA regs and your city/ county zoning to make sure that having a roommate is allowed.  Some HOA regs do not allow you to rent out space to a roomie -- all occupants must be "family" members.

Personally, I vote for selling so long as you can cover the cost of a realtor -- perhaps contact the realtor who sold it to you and see if s/he will list it for a discounted commission.  Any loss you take on closing costs or fees, I'd chalk up to what I call a "stupid tax" (we all make mistakes!) and realize that if you cut your housing cost by $2600 a month, you'll make it back quickly.

If I were single, young, and childless with that kind of SL balance then I'd spend two years living in the cheapest, closest-to-work, non-crime-ridden part of town I could find and pay it off like my hair was on fire.  (And FWIW, I have a similar SL balance but have a teenager to feed, shelter, and keep in his HS district, which is the only thing stopping me).

One goal of Mustachianism is to live simply and modestly thanks to a strong frugality muscle.  I think it will be very hard to fully understand/ adopt this philosophy while living in swank surroundings, so selling also puts you in a better environment to change your frame of mind in ways that will benefit your long-term future.

FuckRx

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Re: Single with good income, where to live...
« Reply #13 on: August 19, 2013, 09:20:30 PM »

thanks for all the advice...
I think that's what I'm gonna do...
my realtor said he'll gladly list for me again and he'll give me a very good discount...
I found places to live under 900, all safe and within biking distance...

TrulyStashin

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Re: Single with good income, where to live...
« Reply #14 on: August 20, 2013, 10:58:44 AM »

thanks for all the advice...
I think that's what I'm gonna do...
my realtor said he'll gladly list for me again and he'll give me a very good discount...
I found places to live under 900, all safe and within biking distance...

That's awesome!   Last year (pre-MMM) I landed a great job with a high income and promptly bought a BMW 128 convertible (because I deserved it, right?!).   I found MMM in May and immediately cranked down on my spending.  Sold the BMW in July and the sense of MASSIVE RELIEF and near bliss was overwhelming.   I immediately went to the DMV website to report it sold; then on to my insurance guy.  Then to my bank to delete Wells Fargo from my bill pay list.   Nirvana.   I was upside down on it and had to use my savings to get free, but I don't care. 

I bet you will feel the same when you get into your new, cheaper lifestyle and feel the rush of power that comes from stroking a check toward your SL's for several thousand dollars each month and watching your Freedom Date get closer and closer.  You will NOT miss that condo.   Please report back and let us know how it feels.


FuckRx

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Re: Single with good income, where to live...
« Reply #15 on: August 21, 2013, 11:30:10 AM »

Now that I want to pull the plug on the condo it's hard....
a part of me says that 3500 isn't too much to pay for the place and that I will be able to sell it for more down the road...
spoke to my realtor and he thinks in the next 2-4 years it will be in the 630k range....
I worry it might be hard to get such a good interest rate down the road or find such a great deal...
the condo is on the very top floor of a nice building, super high ceilings....
but....I don't NEED anything that fancy....
argh

davisgang90

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Re: Single with good income, where to live...
« Reply #16 on: August 22, 2013, 01:18:46 PM »
I think you should sell, rent for $1000 a month and concentrate on killing the 150K of student loans.

If you really want to keep it, get a roommate and put everything you can toward the loans (depending on interest rates).

FuckRx

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Re: Single with good income, where to live...
« Reply #17 on: September 17, 2013, 11:27:12 AM »

just to update ...
based on all the advice the condo is listed...
hopefully it will sell before the end of the month because we have listed it very competitively...
if it doesn't sell we can rent it for about 2850/mo it looks like...
so that will be my back-up option...

i'm doing well in the 200sqft studio actually...
for 825/mo it's hard to beat...