Hi all,
I've been haunting this forum for a year or so and am really impressed with the knowledge and advice that can be found here. I'm hoping some of you are willing to offer some of that savvy feedback on my situation, especially those familiar with the Seattle area market.
In a nutshell: What's the smartest move for me at this point, buy or continue renting? Or to rephrase: Am I letting my wariness of money stress and hassle lead me to avoid making a smart move or am I right to keep things simple and sit out the local real estate market?
The basics: 36 years old. Unmarried (dating nearly 2 years, but we're pretty independent and don't plan on cohabiting anytime soon). No kids. Gross income 80k. Savings rate hovers around 20-25%. Around 25k in cash and 170k between Roth IRA and 401k (got a late start). No debt.
I wouldn't consider myself truly mustachian but I'm drifting closer all the time... Had some bad anxiety issues in early-mid twenties that taught me money stress is EVIL so since then I've responded by living well below my means and keeping my financial life as simple as possible. I'm a big fan of making solid decisions, automating the mechanics, then focusing on other things.
I currently rent a 1br apartment in a good area for $1200 a month plus around $150 in utilities. It's shabby but quiet, convenient, competently managed and a decent deal for the market. Month to month at this point. No plans to leave the Seattle area (was born here). Not interested in a roommate situation.
I favorite listings on Redfin and watch what they sell for so I have a decent idea of the market in my price range. At this point I think that renting is likely somewhere between $0-500 cheaper per month than buying an equivalent place (apartment vs condo). The Seattle market is very strong with fairly low inventory so a getting a true deal is unlikely, especially as I’d be competing with a lot of young tech workers making more money than I am.
So option 1 is to continue renting and sock away the difference. Enjoy the flexibility and lack of responsibility. Resign myself to steady rent increases and moving every few years. Build up a house fund for when I do find myself in a situation where buying clearly makes sense. Forgo possible leveraged appreciation and any tax deductions (which are not all that significant in my price range, as far as I can tell).
Option 2a would be to buy a condo in the city (250-300k), since that’s where I want to live. This would increase monthly expenses and put me on the hook for repairs, special assessments, and condo association craziness. But it would also lock in monthly expenses and hopefully see some steady appreciation. Ideally I’d try to get something I could easily rent it out down the line.
Option 2b would be to buy a house outside the city (like Lynnwood, for example) for around 300k and rent it out while continuing to rent in the city. Adds in the rental headaches but would likely appreciate better than a condo.
I’d appreciate any feedback from you smart (and more decisive) people. Thanks.