Author Topic: Rental vrs Buying for young/mid 20 year olds in Seattle  (Read 7575 times)

chowdan

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Rental vrs Buying for young/mid 20 year olds in Seattle
« on: July 15, 2015, 06:50:27 AM »
Hi everyone!
[TL/DR] - Skip to the bold section!

Been a long time follower in MMM, well not a long time but for about 6 months. My girlfriend and I are in a bit of a dilemma right now regarding housing.

I'm 25 this year, working for a large tech company for the last year as a contractor(my whole tech career - 5 years - has all been contract work). I am on track to becoming a full time employee at this company(my aim is to be a FTE). I make under 50k a year right now, however from the start of my career since living in Seattle(5 years now), I have seen over 70% increase in wages. If I do get FTE, ill see another 60-100% increase in wages. I have no college education, however I am very tech savvy and am motivated to learn and do well, so anything above what I make now I feel is just gravy.

My girlfriend just graduated college for nursing and has gotten a job at Seattle Children's hospital. She hasn't started working yet, and will be starting end of August. She will be making more than I will(at current rates), however she currently has no income until she starts working. This means we are living(and have been for the last 4 years) on pretty much my income alone. In the last 2 years alone, I have seen just over 30% increase in wages. Since the increase, the GF hasn't taken money from her parents for food, rent/misc things and has relied on me to support both of us. She does have a large savings account(in stocks), and has given me some funds to help pay for rent and cover food costs. This large savings account has not only helped support me and her for her share of cost of living, but has pretty much supported her during the summers when she's out of school.

Once she starts working, our combined income will be above/about 100k a year. Not bad for a couple at our age in my view.

Now that I've gotten our current financial state out of the way, onto the real questions and breakdowns

Currently we have a large savings account(above what our combined income will be) that is heavily invested in the stock market. Once the GF starts working, we are considering about buying a house however I am reluctant to say this is a smart decision. 

We have one car, a 2002 honda civic. I try to hypermile as much as I possibly can, the car is fully paid off so our only expenses are gas(about 25 bucks bi-weekly). Insurance is currently covered by the GF's parents.

Based on a combined income of $100k - a savings account say of $120k(returning roughly 15%/year) and a potential house valued at $450k, we would be looking at putting down $90k at 20%.

This means if we had $120k in stocks(savings), we will have a remaining amount of $30k left over after purchasing the house(if the closing cost and everything equaled $450k) and a mortgage payment $2,187.45(based on mortgagecalculator.org), or $1,701(based on Zillow.com) per month for a 30 year mortgage.
Potential Mortgage payment(excluding tax/insurance/repairs):
$2,187.45 x 12mnths = $26,249.4
$1701 x 12mnths = $20,412

Current Rent & Parking:
$1495 x 12 = $17,940
$125 x 12 = $1,500
Total: $19,440/year for renting

The dilemma that I am trying to figure out is, paying an extra 6k/year towards a mortgage payment & taxes/insurance, say another 6k, so a total of 12k(feel free to correct me on this!) per year on top of the base mortgage payment?

We are seeing roughly $200/year increase in our rent, and based on the current housing market in Seattle, it likely that rent will continue to be on the rise due to tech companies moving into the area. We also are seeing house prices sky rocket due to the lack of number of homes for sale.

SO! What do we do? We live in downtown, about 30 minute walk from my office, and about 10 minute walk to the shuttle for the GF to get to the hospital. I hate paying rent as I dont see anything really come out of it, yet spending $90k on a downpayment + having a higher monthly payment also doesn't seem attractive. If we buy a house, our savings account will drastically be reduced, and in a market where stocks are at an all time high, i'm tempted to say that pulling the cash now is a great time, however if the market falls, i'd suspect the housing market to fall as well, which means either way we will be down. 

So any advice, from people who have more experience that we do would be great!

dandarc

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Re: Rental vrs Buying for young/mid 20 year olds in Seattle
« Reply #1 on: July 15, 2015, 07:08:40 AM »
Isn't Seattle one of those cities where renting has been the winner for a long time?  As you point out, the P&I on the mortgage alone is more than your current rent.  Taxes, insurance, and maintenance could double the housing cost from the P&I payment. 

I wouldn't buy a house with someone I'm not married to, but some people do, so you know, just be sure about it before acting.

If you are going to buy a house in the next couple of years, your down payment money should probably not be in stocks - the market could tank right about when you need the money to close.

Anyway, good luck with the decision, and congrats to your GF on finishing the nursing program.

Also:
Quote
(returning roughly 15%/year)
is either totally unsustainable or you are in very risky investments.  How long have you been keeping track on this account?  The last few years have been fantastic for stocks, but there will be much worse years as well.  2015, for example hasn't looked particularly hot so far.


chowdan

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Re: Rental vrs Buying for young/mid 20 year olds in Seattle
« Reply #3 on: July 15, 2015, 07:45:17 AM »
Thanks Dandarc for the response! Much appreciated!

Isn't Seattle one of those cities where renting has been the winner for a long time?  As you point out, the P&I on the mortgage alone is more than your current rent.  Taxes, insurance, and maintenance could double the housing cost from the P&I payment. 
How would one calculate the renting vrs buying? I was thinking about taking the last 5 years in housing, calculate the average increase in pricing of the houses and calculating the average price of rent increase per year. The lower of the two would be the winner, however it seems the last 5 years has been pretty crazy for investments and I'm not sure thats its sustainable for the future?

I wouldn't buy a house with someone I'm not married to, but some people do, so you know, just be sure about it before acting.
This was something we have been thinking about as well. I talked with a mortgage broker about it, and they said they've dealt with people who aren't married before. We've been wanting to get married(been together for 6 years now), however we both are young(she's 22) and it hasn't been at the top of the list. If we were to buy a house I'd want to put some sort of pre-nup in place for the house so details are sorted while our heads are level just in case something does go wrong.

Is there any reason you're against it?

If you are going to buy a house in the next couple of years, your down payment money should probably not be in stocks - the market could tank right about when you need the money to close.

I also agree with this, which is why we are thinking now would be a time to do this. We have ~90k in stocks, and ~30k in mutual funds bonds.

Also:
Quote
(returning roughly 15%/year)
is either totally unsustainable or you are in very risky investments.  How long have you been keeping track on this account?  The last few years have been fantastic for stocks, but there will be much worse years as well.  2015, for example hasn't looked particularly hot so far.

I do agree with you, 15% is not sustainable what so ever(2013/14 returned this). Overall this year, were up about 6% total(10% on stocks, down 4% on mutual funds - mutual funds are heavily dividend based).

Unfortunately our money is with a stock broker with Merrill Lynch. We are on the market for a new advisor who will be honest and has fiduciary responsibilities. Last month we met with the current broker and asked him about his fiduciary duty, however he responded he hasn't herd that term before. This threw the giant red flag up and is the sole reason we are on the search for a new broker. Last 2 years has been great for returns, especially since this is what has supported the GF's half of things, but now she's going to be working, anything we generate will be turned back into investments.

PS! I love your journal! I just started reading it  but so far so good! I think I may start one :) - Do you find keeping this journal, you stay on track better?

chowdan

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sammybiker

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Re: Rental vrs Buying for young/mid 20 year olds in Seattle
« Reply #5 on: July 15, 2015, 09:53:08 AM »
A lot of "we" in this post...but legally you're not a "we".... = risk. You're 25 (almost, right?), still very young in the big scheme of things but you're on the cuff of either making it big or making a commitment that could strain (or strangle) you financially later...proceed with caution.

Side note:  I work with a lot of young guys, 27-35 and these guys make good money, excess of 150K usd annual plus travel/living expenses/perks...many are slaves to the income due to poor decisions they made (although in good faith!) when they were younger...and more importantly, they are slaves to poor decisions accompanied with poor legal paperwork lacking clear delineations.  Just...be aware, be realistic (it's hard, I know) and be cautious.   

Personal relationships and associated liabilities aside, although it's  a bit anti MMM, I think Seattle begs an exception - what about leveraging your downpayment as much as possible and pursuing a multi-family outside of downtown - maybe FAR outside downtown/Seattle completely - but positioning yourself to at least live (collectively) rent-free and maybe even cash flow a bit?  Go put 5% or 10% or 20% down on a 4-unit?

I'm out of touch with the SEA market but surely going 30 miles North or South will yield something that fits the above? 

I liked your background story, grinding it out on talent and reputation alone (sans formal education)...you're certainly underpaid and I hope you realize your market value soon.  Best of luck. 

dandarc

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Re: Rental vrs Buying for young/mid 20 year olds in Seattle
« Reply #6 on: July 15, 2015, 10:32:36 AM »
PS! I love your journal! I just started reading it  but so far so good! I think I may start one :) - Do you find keeping this journal, you stay on track better?
Maybe not as helpful as I'd hoped initially in terms of staying on track, considering we've backtracked on quite a few of the cost cutting measures.  Still better than when we started, but I think we've settled into what our spending is going to look like, and it is quite a bit higher than I was hoping for initially.  Also I get pretty whiny at times in the journal, so be warned.  That being said, getting all the support and ideas there does mean alot, and it has been wonderful overall having the journal.

dandarc

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Re: Rental vrs Buying for young/mid 20 year olds in Seattle
« Reply #7 on: July 15, 2015, 10:40:49 AM »
Unfortunately our money is with a stock broker with Merrill Lynch. We are on the market for a new advisor who will be honest and has fiduciary responsibilities. Last month we met with the current broker and asked him about his fiduciary duty, however he responded he hasn't herd that term before. This threw the giant red flag up and is the sole reason we are on the search for a new broker. Last 2 years has been great for returns, especially since this is what has supported the GF's half of things, but now she's going to be working, anything we generate will be turned back into investments.
In addition to the above linked article about renting vs owning, read the entire jlcollinsh stock series.  If you still think you need a financial advisor, read it again.  Once you are convinced you can do a perfectly fine job of managing your money on your own, call Vanguard (or another DIY type broker that has good fees), and get away from this guy.

Only time having a traditional advisor might be worth it is if you are prone to making impulsive decisions along the lines of "the market is down 20% - I HAVE TO SELL NOW BEFORE IT GOES TO ZERO".  Even then they'd have to talk you out of it.  It is incredibly expensive over your lifetime to be paying the high expenses that most advisors charge.

https://personal.vanguard.com/us/insights/investingtruths/investing-truth-about-cost illustrates how bad high fees are.



Bob W

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Re: Rental vrs Buying for young/mid 20 year olds in Seattle
« Reply #8 on: July 15, 2015, 10:56:57 AM »
Please remember that if you are "buying" you are paying cash.   If what you are proposing is buying a mortgage that is an entirely different thing and this concept is lost on most people. 

Standard answer --  Buy if you have the cash to buy and want to for some reason.   In our current loan environment put 20% down and invest the rest.    If you don't have the cash then you can't buy a house.   You can buy a mortgage that is secured by a house.  I wouldn't recommend it. 

Renting is freedom--- buy a mortgage and the house owns you. 

chowdan

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Re: Rental vrs Buying for young/mid 20 year olds in Seattle
« Reply #9 on: July 15, 2015, 01:28:34 PM »
Thank you everyone for all the insights. This is EXACTLY why I am have come here, and plan to stay here:)

Unfortunately I can't respond to everyone, due to being at work, however you all shall hear from me in the next few hours!

Again I really appreciate everyones help!

chowdan

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Re: Rental vrs Buying for young/mid 20 year olds in Seattle
« Reply #10 on: July 24, 2015, 11:27:12 AM »
Thank you all for the help and responses! I'm going through jlcollinsnh.com site and trying to absorb as much info as possible. I'm also in the process of getting an excel spreadsheet updated with all the finances and am going to break down costs of owning vrs renting.

Thanks to everyone here, the initial number crunching on just vague numbers shows that we are better off not buying. The next step is getting this spreadsheet to be accurate in terms of finances and show the breakdown of the cost of owning vrs renting to show to the girlfriend. She still is under the idea that we are better buying than renting as renting we are "just putting money into nothing, where a house is going towards an asset we own".

As a side note, when I say "buy a house", i mean we are planning to put roughly 20% down depending on the cost of the house, however we dont want to put more than 50k down, and have the rest come from a mortgage.

I was curious though, say we buy a house thats valued at $400k, we put down 20%(80k), and recieve a 30year fix mortgage at 4% for  $320k.

30years x 12 = 360months
Monthly payments:  $1,528

360mo x $1,528 = $550,080
$550,080 + 80k = $630,080

So if we owned the house for 30 years, not including taxes, inflation, and maintence, just the cost of acquiring the house would be $630,080 in todays $. If todays $ was the same as 30 years from now $, we'd need to sell at $630k to break even correct?

Say we decide in 10 years to sell the house and move somewhere else. Is there generally a penalty for paying back the loan early? Since we would still have ~20 years left on the loan, or roughly $360,000 left on the loan.

Also doing quick numbers I was hoping someone could possibly go through and see if i'm on the right track(basing off the numbers above) and understand it correctly?

House cost: $400,000
20% down: $80,000
Mortgage: $320,000
Monthly payment: $1,528
Interest rate: 4%
Housing value increase yoy: 6%
House value after 5, 10, 20, 30 years: $535k, $716k, $1.2m, $2.2m(This was based on a compound calculator using a $400k starting price)

Total cost to pay off house: $630k

If housing grew at a 6% rate each year, and compounding that growth rate over multiple years, itd take 8 years to meet the "break-even" point for us to sell the house(not including inflation). If we were to sell the house at the 10 year mark when valued at $716k we would be seeing roughly $86k remaining after paying off the loan, which means over that 10 year period, we saw $6k increase in our initial 80k investment?

That right there was a giant red flag waving infront of me saying "DO NOT BUY"



dandarc

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Re: Rental vrs Buying for young/mid 20 year olds in Seattle
« Reply #11 on: July 24, 2015, 01:54:59 PM »
If housing grew at a 6% rate each year, and compounding that growth rate over multiple years, itd take 8 years to meet the "break-even" point for us to sell the house(not including inflation). If we were to sell the house at the 10 year mark when valued at $716k we would be seeing roughly $86k remaining after paying off the loan, which means over that 10 year period, we saw $6k increase in our initial 80k investment?
This is wrong.  At 10 years, your loan balance would be about 252K, taking the numbers given.  So you'd clear 716K - 252K = 464K from the sale (you know ignoring commissions).  You'd have paid down 68K in principal, paid 115K in interest, then of course the 80K down payment.  Even subtracting all those numbers, you've got an increase of 201K.

Of course, ignoring taxes, inflation, maintenance, and commissions isn't a trivial thing - on the net, ignoring all of these things should make buying look more attractive than it actually is, I would think.  The only one that makes buying look worse by ignoring it is inflation - that $1500 loan payment you make in year 29 is much less expensive in year 0 dollars.

NoNonsenseLandlord

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Re: Rental vrs Buying for young/mid 20 year olds in Seattle
« Reply #12 on: July 25, 2015, 05:19:28 AM »
One thing that is rarely mentioned in the buying vs. renting equations is the ability to be flexible.  That flexibility is a key to saving money being a renter, but only if you maximize the rental experience.

If you are going to live in a long-term rental, especially in a house where you have to mow the lawn and take care of the property, buy a home.

When you rent, you want to rent only the space you need.  And only rent the space where you need it.  If you maximize the rental experience, it is WAY cheaper than renting.

Rent close to your main traveling area, probably work.  Save money on commute costs, and time.  Use that time to devote to your career, or gain a side hustle job.  If you out grow your position, get a better paying job and move closer.

Rent a studio or one bedroom if it is just for you.  If you rent an extra bedroom, get a roommate.  Maybe that is a significant other, or someone else that can help pay.

If your neighborhood evolves to be a higher crime neighborhood, you can just move.  Or if you moved into an area you did not know was crime ridden, you can move.

If you are renting, you do not need things like lawnmowers, hedge trimmers, snow blowers, rakes, hoses, boats, jet skis, canoes, window air conditioners, workout equipment, pets, etc.  Those all cost money.  If you are renting, and you need some of those items, you can rent those as well. 

Moving when you own a place is a real headache and it is expensive.  You have to buy a new place, and sell your old one.  A real estate commission is paid on both transactions.  Someone is paying the realtor, and you will be one of the main payers.

Bearded Man

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Re: Rental vrs Buying for young/mid 20 year olds in Seattle
« Reply #13 on: July 25, 2015, 08:37:18 PM »
Hmmm...I think it could be a great investment in the long run, but I think your and your gf's income, even combined is not high and secure enough to buy something like that without a lot of risk. You have no college education, which means you won't usually make the same pay a college grad will. I'm sure someone will come and flame me, but it is a statistical fact. There are exceptions to the rule, but 5 years in, you are not the exception, sorry.

Your GF is just starting out in her field. You guys are talking about taking on nearly half a mil of debt. Ouch.

I think in your shoes, I'd buy a starter house, further from Seattle, smaller, less expensive. Establish yourselves. You can always either sell and trade up, or turn it into a rental and buy another house to keep building wealth.


Yankuba

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Re: Rental vrs Buying for young/mid 20 year olds in Seattle
« Reply #14 on: July 27, 2015, 06:16:43 PM »
NY Times has in my opinion the best calculator re: renting vs. buying:

http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html?_r=0&abt=0002&abg=1

humbleMouse

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Re: Rental vrs Buying for young/mid 20 year olds in Seattle
« Reply #15 on: July 28, 2015, 08:41:45 AM »
Just want to pop in and say I think "buying" a house in your situation is an absolutely terrible idea.  Renting is not throwing your money away.  You get a place to live!!


aasdfadsf

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Re: Rental vrs Buying for young/mid 20 year olds in Seattle
« Reply #16 on: July 29, 2015, 02:10:26 AM »
While up-to-date numbers are kinda hard to find, the P/R in Seattle is now somewhere around 33. That is ridiculous. It implies an imputed rent of owning a home of around 3%. Once you deduct expenses, that's a terrible investment (likely negative) unless you're betting on a big appreciation in property values, and at such high valuations that's not a good bet. Besides, a prospective home buyer shouldn't be a speculator.

As always, the specifics are what matters. But unless you can find a property with a P/R of something closer to 15 that is good for you in every other respect, renting is the smart thing here. And even then buying might not be smart. 

aasdfadsf

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Re: Rental vrs Buying for young/mid 20 year olds in Seattle
« Reply #17 on: July 29, 2015, 02:36:06 AM »
Renting is not throwing your money away.  You get a place to live!!

Exactly. The two most irritating phrases to me when it comes to rent vs. buying arguments are "renting is just throwing money away!" and "owning a home is not really an investment!".

Both are wrong in the same way. No matter what, unless you're willing to sleep under a bridge, you must pay for housing. The only pertinent question is whether it makes more sense to invest in the property and pay rent to yourself, or to forgo the investment and pay rent to someone else. Either way, there is rent.

To know which is better, you have to dig into the specifics of the situation. There can be no generalizable correct answer.

Bearded Man

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Re: Rental vrs Buying for young/mid 20 year olds in Seattle
« Reply #18 on: August 13, 2015, 04:51:04 PM »
In the long run, owning is better. It fixes your housing costs other than taxes and insurance, which only increase by a small amount rather than 3% of 1-2K.

Between the tax benefit, albeit small on mustachian mortgages, and principal pay down, not to mention that besides the fixed cost of ownership overall, eventually you pay it off, and thus reduce your living expenses.

I too laugh when people tell me my primary residence is not an investment.

Cressida

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Re: Rental vrs Buying for young/mid 20 year olds in Seattle
« Reply #19 on: August 13, 2015, 05:00:07 PM »
I'm out of touch with the SEA market but surely going 30 miles North or South will yield something that fits the above?

Just popping in to say DO NOT DO THIS. The traffic will kill you.

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Re: Rental vrs Buying for young/mid 20 year olds in Seattle
« Reply #20 on: August 13, 2015, 05:29:06 PM »
I'm out of touch with the SEA market but surely going 30 miles North or South will yield something that fits the above?

Just popping in to say DO NOT DO THIS. The traffic will kill you.

Move south and take the train?

Frugal D

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Re: Rental vrs Buying for young/mid 20 year olds in Seattle
« Reply #21 on: August 13, 2015, 05:38:06 PM »
Lots of moving parts here, but I think the easy answer is DO NOT BUY. Find an apartment in the city and save up your money for a down payment together

Keep the $120k invested and just let that work for you - you won't believe how much it will be in 10 years. I would have loved to essentially receive a $120k graduation gift. Live like you're broke and you'll be rich very quickly with that.   

2Cent

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Re: Rental vrs Buying for young/mid 20 year olds in Seattle
« Reply #22 on: August 14, 2015, 03:53:06 AM »
If you have to ask, don't buy. The savings are marginal at best and you lose all the flexibility to move. Also renting saves you the hassle of house maintenance. If you buy now and want to stay for at least 10 years, you will need to accommodate all kinds of future decisions like having kids, which usually means you buy bigger than you really need for most of the time or smaller than you need for when you have kids. When you rent you only need to rent what you need right now.

And if the worst happens and you break up, the house is a big headache. Just wait a few more years. You yourself will change a lot, so don't tie yourself to a house.

chowdan

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Re: Rental vrs Buying for young/mid 20 year olds in Seattle
« Reply #23 on: August 20, 2015, 09:24:09 AM »
Well everyone, I wanted to thank you all for your lovely insight. The girlfriend and I have found a bigger, closer to her work, better place for LESS than what we are paying right now.

So not only are we in the process of trying to figure out what to do with our funds, but in the process of saving a around $300/month.

At our current place, rent is $1495 + $125 for parking, the new place includes parking, water, sewer, garbage, and rent all for a grand total of $1400. Our last water/sewer/garbage bill was around $110 for the month, so I think we are coming out a head.

Now that the girlfriend is starting to work, our incomes are going up dramatically, and we are locked in to the apartment for the next year. The girlfriend has a 3 year contract for work, and after that period, who knows what will happen.

I know many of you probably think this is a tad crazy, however we are planning to buy a small sailboat for day cruising/weekender for the next couple years. After the GF finishes her contract with the hospital she's at, we are going to look at acquiring a more offshore vessel, and take a year sabbatical. We both have come to realize, there is much more to life than dedicating ones adulthood to a corporation/company just to retire to then live the life you expect just to find out your health isn't where it used to be.

The budgeting and funding for the trip will be quite interesting, and who knows, maybe ill start a journal of it.

Again, i really want to thank EVERYONE for opening my eyes to expenses of owning a house of such value and cost of it. If housing wasn't in such a bidding war, and they were sub 100k, then i'd probably look further into it. But house valued at 400k is selling 100k more these days :(

jooles

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Re: Rental vrs Buying for young/mid 20 year olds in Seattle
« Reply #24 on: August 20, 2015, 10:27:01 AM »
Living outside the city is not an impossibility.  The Metro service is pretty good.  Working downtown or on Capitol Hill or pill hill gets you access to many "express" routes on Metro.  You simply pick up your buss at a centralized park and ride and they take you directly to your area with very few stops in just your area.  I used to ride an express from the eastside to pill hill.  I got on in Mercer Island (I did not live on Mercer Island, just caught the bus there) and 20 minutes later I was dropped off 1 block from my hospital job.  There were only 5 stops for this bus, all stops were near the major hospitals on pill hill.  I'm sure you could find something similar if you chose to live outside the downtown core.

clarkfan1979

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Re: Rental vrs Buying for young/mid 20 year olds in Seattle
« Reply #25 on: August 21, 2015, 01:17:10 AM »
If you can get a rental that you like, then rent. Generic formulas state that you need to be in the house for at least 5 years to break even. If a mortgage is more expensive than rent, it might be closer to 10 years. Are you sold on Seattle for the rest of your life? Would you feel comfortable renting it out if you want to leave after 4 years? Would the rent generate enough money to cover the mortgage?

chowdan

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Re: Rental vrs Buying for young/mid 20 year olds in Seattle
« Reply #26 on: August 24, 2015, 03:33:25 PM »
Thanks Jooles and Clarkfan,

We both used to live outside the city, mainly Issaquah/Bellevue area, however moved to down town since the GF started school. Now that she's graduated and is starting her career, we were looking outside downtown.

I must say though, considering both our mental states as it is, neither of us want to live in the USA for ever, even though we both LOVE seattle. This would mean if we were to own, we'd need to figure out a way to get our units rented, which if we weren't actively involved, could be costly jsut for management fees + maintenance in the future.

That being said, we are actively on the market for a sailboat, 35-40ft, that is offshore capable. Preferably one that would be less than 20K in decent condition but in need of some work still. I am very handy and was raised maintaining boats for a large portion of my life, however these were workboats designed for diving and hauling goods. According to what I can figure out, if we have a total cost of $40k for the boat and upgrades we make, we will come out ahead in terms of cost.

Living aboard the vessel for just over 28 months, paying what will be paying for our new apartment in rent(1400), we are looking at the break even point. Tacking on another $15-$20/foot/month, thats $800/month + any utilities that we have, so $2500/month for just over 28 months(2.3 years) we will ahve a boat outfitted for offshore cruising, plus a home that travels with us.

If we were to chose to stay and not go offshore, and continue saving a bit more for the adventure, that means our rent is only what mooring cost is + utilities.

In the end, we aren't where we want to me mentally, financially, or career wise in terms of buying a house/condo. The cost of it is too great to take on, we do not want kids just yet, and want to ahve an "extended" honeymoon/sabbatical that will allow us to visiting a majority of the world.

I've come to realize, working for other companies, I am selling my time to these people, and at the end of the day, time is not money, time is a commodity, and a VERY RARE one at that. Why should we be spending a majority of our adulthood, selling the one resource we can NEVER get back, and then when we are at the point of "retirement" to go off and do things that we always dreamed of, we are likely to be sick, overworked and worn out.

That being said, we are actively making moves towards saving the finances we have, and saving a large portion of our income to be able to flip the bird to the corporate world, to enjoy the one life that we have, and the one resource we have that is irreplaceable.

Dicey

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Re: Rental vrs Buying for young/mid 20 year olds in Seattle
« Reply #27 on: August 24, 2015, 03:54:35 PM »
I've come to realize, working for other companies, I am selling my time to these people, and at the end of the day, time is not money, time is a commodity, and a VERY RARE one at that. Why should we be spending a majority of our adulthood, selling the one resource we can NEVER get back, and then when we are at the point of "retirement" to go off and do things that we always dreamed of, we are likely to be sick, overworked and worn out.

That being said, we are actively making moves towards saving the finances we have, and saving a large portion of our income to be able to flip the bird to the corporate world, to enjoy the one life that we have, and the one resource we have that is irreplaceable.
Wow! You're only 25? Good on you for figuring this out so early in life. Forget the house, it doesn't align with your near- or mid-term goals at all.

chowdan

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Re: Rental vrs Buying for young/mid 20 year olds in Seattle
« Reply #28 on: August 24, 2015, 04:27:59 PM »
Wow! You're only 25? Good on you for figuring this out so early in life. Forget the house, it doesn't align with your near- or mid-term goals at all.

Not sure who it was that said this, but like you say, forget the house, once we owe the money for the house, we will be forever in debt to the corporate world to be forced to work to pay for this giant ass thing that really, we will be spending a ton of money on, and never really get to make use of.

I look at like buying a new car. And a new car that is expensive. I could afford a car thats 30k-60k, and be fine owning it, however really, over the time frame of owning the car, I am not getting anything better, except a giant hose of money flowing out from me. If i were a professional driver, that may be different, but owning a car thats 20k+ seems crazy considering the amount of time one drives the car vrs it sitting in the lot/garage.

Plus on the bright side, we have a '02 honda civic shared car between the two of us. Paid less than $7k for it, have had it since 2010, and very minor maintenance in the car. We also can easily get 35mpg with it, and if we try hard enough, 45-50mpg on it. The gf doesn't like my methods to get the higher MPG range, but its definitely doable. No need to spend a ton on a hybrid when you can slow down, run lower RPM's and hypermile your way to fuel efficiency.

Now i just need to figure out a way to start some sort of business that earns enough cash to support my part of the bills, and allows me to have more free time away from "work" to dedicate this free time towards learning and actually enjoying life.
« Last Edit: August 24, 2015, 04:31:56 PM by chowdan »