Author Topic: The Cost of Frugality - Weigh In!  (Read 2549 times)

frugalinseattle

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The Cost of Frugality - Weigh In!
« on: February 02, 2018, 08:32:53 PM »
This is my first post as I've recently become introduced and (obsessed with) FIRE. (Thanks Mr. Money!) I live in a HCOL - Seattle. Most of my colleagues envy my $1300/month 1BR only 6 miles away from downtown and I've always thought I was living frugally. I saved 50k last year without really trying so now I'm thinking...how much could I really save??

That being said, I have the opportunity to move into a house a block away. Rent will range from $1800-2000 for 3 BR. The place is heated by a furnace, a fireplace, and a few electric heaters in the wall. I have no idea what to anticipate for utility expense or how quickly I could get roommates in the house so that could be a hit financially.

The biggest thing is the house itself. It's quite old with zero rehabilitation. One window is broken, a few are cracked, the gutters are blocked, there's a leak in the roof, a backdoor with just two hinged locks to keep people out (and it's a pathetic excuse for a door), it looks like some insulation has been done with hay (literally) and there's mold in quite a few places. The third BR is in the basement and dingy, with a slanted floor. I didn't inspect the house a ton because I didn't want to be rude but I imagine there are a few more things wrong. Unless it's a big problem, the landlord made it clear he won't be fixing much. He'll work on the leaky roof and he'll fix the furnace but if the water goes out? Or it's not hot? Or a window is broken into? Nada. He intends to sell it this year or next (it's probably worth 700k without any rehab).

I guess I'm wondering if anyone can help me weigh in on this decision and the value of the savings I'd make over the course of a year or two. It would be around $500/mo at least in savings. But I've never lived in such rough conditions and I'm intimidated by the work it may involve. I'm not a handy person but I'm willing to learn. I just usually break more before fixing things. And I don't know if I can do the poor housing conditions -- or is that just normal for a lot of America and I've been sheltered/spoiled? Is $500 /mo a good trade off for everything in a house being reliable?

Also, if I need to provide stats...I'm single, 27 and I work in sales so my income fluctuates. Base is 60k, I made 70k in commission last year (grand total of 130k), 35k in 401k, 100k in the bank (working on investing this over the next 6 months). Last year my expenses were around 33k.

mozar

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Re: The Cost of Frugality - Weigh In!
« Reply #1 on: February 02, 2018, 08:44:46 PM »
Mold can be very expensive to fix. That by itself would be a big nope for me.

Poundwise

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Re: The Cost of Frugality - Weigh In!
« Reply #2 on: February 02, 2018, 08:51:53 PM »
I wouldn't do the extensive work needed to make such a house livable, unless I owned it. 

Suppose you fix it up enough to attract some roommates, then together you fix it up enough to make it comfortable to live in? Then he raises the rent on you?

No, I wouldn't do it.

redbird

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Re: The Cost of Frugality - Weigh In!
« Reply #3 on: February 02, 2018, 08:58:15 PM »
I probably wouldn't want to buy a house in that bad of condition. But I might consider it if the price was right.

Renting? Absolutely not. Especially if you're considering fixing any of that. You'd essentially be giving the landlord a free upgrade. You said it yourself, he plans to sell the place in about a year. You wouldn't even get to enjoy any fixes/mold cleaning that you did to it for more than a short-term basis.

living small

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Re: The Cost of Frugality - Weigh In!
« Reply #4 on: February 04, 2018, 04:46:57 PM »
Hey there.
I agree about the mold issue. One thing that i have learned over the course of owning several properties is that there always needs to be an exit strategy. In fact, you have to be thinking about the exit strategy prior to getting into any investment. If there is mold, it can be a difficult, tenacious problem to solve. if you purchase a property knowing that there is an issue,  you have to disclose it down the road, which could suppress the resale price even if the issue is "resolved".
I currently live in a smallish house, built in the 1960's; we have been fixing it up room by room as we live here. I am lucky to have a husband who knows everything from tiling to electrical to plumbing to drywall. If I didn't, the rehab would be dauntingly expensive.
If it were me, I would hold steady where you are and keep on saving- maybe looking at other ways to save instead of jumping into a money pit. good luck!

Sun Hat

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Re: The Cost of Frugality - Weigh In!
« Reply #5 on: February 04, 2018, 07:30:33 PM »
I don't understand why you'd want to move. Why would you want to pay more to live in terrible conditions when you wouldn't even be building equity in the place? Are you being forced to move out of your apartment? If so, find somewhere else. I can't imagine any situation where moving into that house sounds like a good idea.

Edited to add: 1) I now see that you plan on roommates to offset the expense. Your health isn't worth a few hundred dollars - that's really short term thinking. Plan to live long and well!
2) My house had mold in it when I moved in (I had a shit home inspector), and I was very, very ill for two months until I discovered the problem and remedied it at enormous expense. Even so, I was fortunate that my mold problem was fixable, not all are!
« Last Edit: February 05, 2018, 08:00:45 PM by Sun Hat »

Dicey

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Re: The Cost of Frugality - Weigh In!
« Reply #6 on: February 04, 2018, 08:23:20 PM »
Not a chance. The value of your health and well-being deserves more consideration in this decision. I support the idea in theory and encourage you to keep looking for a similar situation with a better house.

EmFrugal

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Re: The Cost of Frugality - Weigh In!
« Reply #7 on: February 05, 2018, 11:49:34 AM »
My takeaway from Mustachianism is that it is about enhancing your life while building savings. This sounds like a step in the wrong direction... like live in poverty in order to save more. Not quite the message MMM is going for.

My hunch is that you would regret this decision, especially if your current apartment is in livable condition. Just keep doing what you're doing! It sounds like you've made some great strides. But don't sacrifice your health and well-being. You want a place to come home to that is livable and cozy. Especially since people tend to spend more time at home when they're saving money.

JLee

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Re: The Cost of Frugality - Weigh In!
« Reply #8 on: February 05, 2018, 12:19:12 PM »
No.

nurseart

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Re: The Cost of Frugality - Weigh In!
« Reply #9 on: February 05, 2018, 12:46:09 PM »
Yea no.

ketchup

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Re: The Cost of Frugality - Weigh In!
« Reply #10 on: February 05, 2018, 01:34:00 PM »
I would definitely not do that.  I know a family that lived with their grandma for a number of years.  They got sick all the time, and they blamed mold in the house which their grandma fervently denied.  Years later, they've all moved out and almost never get sick.  Don't fuck with mold.