Author Topic: The Cost of Frugality - Weigh In!  (Read 2251 times)

frugalinseattle

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The Cost of Frugality - Weigh In!
« on: February 02, 2018, 08:37:04 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.

trix76

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Re: The Cost of Frugality - Weigh In!
« Reply #1 on: February 02, 2018, 11:03:31 PM »
I’d stay far away. Do you want to spend your free time fixing things in a place that isn’t even yours? Also, think about when the landlord sells the place and you need a new place to live. You are unlikely to find a place as cheap as your current 1 BR. (Coming from someone also paying $1300ish for a 1BR in Seattle, which I know is a good deal.) Just my opinion, but $500/month in (potential) savings isn’t worth the hassle that place entails.


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Finances_With_Purpose

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Re: The Cost of Frugality - Weigh In!
« Reply #2 on: February 02, 2018, 11:07:25 PM »
I'd be very hesitant about that.  Sounds like your current situation is pretty good.  That move would be high-risk.  Plus, you don't want to be repairing a house you won't own - that can cost far more than it's worth (and than you're going to save), let alone all the hassle that that involves.  We know what your upside is - a few roommates' rent minus your rent - but your downside on that could be very large or simply a huge hassle. 

I often encourage people on here to reduce housing expenses, including someone yesterday, but in your case, you may want to stay put. 

Your passion is awesome.  You may want to start with some smaller steps first and take some time with these big things. 

undercover

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Re: The Cost of Frugality - Weigh In!
« Reply #3 on: February 02, 2018, 11:32:23 PM »
No. A slumlord situation with two roommates, while you could probably tolerate it, most likely won't be worth saving $6k a year. But more importantly - why even bother with such a temporary situation? Why not look into a 2BR in the building you're in?

alsoknownasDean

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Re: The Cost of Frugality - Weigh In!
« Reply #4 on: February 03, 2018, 02:08:22 AM »
What impact would it have on your happiness?

Unless your current place is unbearable in some way or another, stay where you are. Wouldn't bother with that place, sounds like a dump :)

LifeHappens

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Re: The Cost of Frugality - Weigh In!
« Reply #5 on: February 03, 2018, 04:30:47 AM »
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.
[snip]
 is that just normal for a lot of America and I've been sheltered/spoiled?
Okay, I'm not expert on rental laws in Seattle, but not fixing a broken water supply, water heater or window is almost certainly illegal. As to the second bit, sure, some people live in such bad conditions, but I would never call that "normal."

Stay far away from this situation.

Beach_Stache

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Re: The Cost of Frugality - Weigh In!
« Reply #6 on: February 03, 2018, 05:43:56 AM »
Stay away!  Unless you are reallying looking for a crash course learning experience (if you want that) it sounds like a nightmare.  If the landlord (who is trying to get you in) is basically saying he's not going to do anything for you, then it's just going to be a headache, and if the place isn't yours you're not going to want to put in all that work and live in a s-hole place for a year or more.  If you are not prepared to deal with issues all the time then I would look elsewhere.

2Birds1Stone

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Re: The Cost of Frugality - Weigh In!
« Reply #7 on: February 03, 2018, 10:27:04 AM »
You sound pretty smart, why would you even consider this?

1BR for single person is perfect.....

lbmustache

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Re: The Cost of Frugality - Weigh In!
« Reply #8 on: February 03, 2018, 11:46:42 AM »
Iíd stay far away. Do you want to spend your free time fixing things in a place that isnít even yours?

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STRONGLY AGREE.

OP, you are going to spend YOUR time and YOUR money (negating the $500 savings... windows, plumbing repairs, etc. are not free) fixing this dude's place, so he can make a nice profit when he sells it?

NOPE.

Also, these conditions sound deplorable. Like someone else mentioned, broken windows, not having running hot water, etc. are illegal. Look up laws for Seattle - landlords have to provide a habitable environment. These are not normal living conditions in the U.S.

Stay in your current place. Your savings rate already sounds pretty substantial as is. See if you can cut back somewhere else - make more meals at home, cut a monthly service out, etc.

LWYRUP

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Re: The Cost of Frugality - Weigh In!
« Reply #9 on: February 03, 2018, 05:34:35 PM »

If he flips it, new owner may kick you out. Moving is a pain and expensive.

If he was giving you some sweet deal in rent to fix up the house, maybe.  But that's not what's on offer.

Melf

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Re: The Cost of Frugality - Weigh In!
« Reply #10 on: February 03, 2018, 06:39:35 PM »
I vote for passing on the 'opportunity' as well.  The house sounds pretty undesirable as is and you'd be sinking money into it to make it presentable to get a couple roommates.  I think you're kicking butt already with savings and your current place seems fine for cost/location.  Get that money invested and keep saving as you are now.  You'll be FI before you know it and can decide what to do from there.