> I know I could pull out approximately 36k a year without touching principal, but I also have been advised to really try, if at all possible, to avoid taking anything out.
But, here's the thing - you are at the point where you have done all that you can and you really are close to NEEDING to pull some money out.
I used to be so uptight about spending money, but I've come to realize that sometimes, the best solution for a problem - particularly when you are stressed and overwhelmed - is to use money that you have to help solve a problem.
You have the money. You have a need. You are financially responsible. Allow yourself to pay for and live in a nice place. Think of it as a gift to yourself.
Good point--sometimes you *do* have to throw money at a problem to make it go away. I hate to say that, but it's true.
My only concern is doing it over the long term. Like I can pay for a year or two of increased rent, but I don't want to do that forever. In the long run, I have to do something different and I don't know what that is.
I feel like I can get a much nicer place owning. Rent increases also scare me. If I used 2k a month from my savings, that brings my income up to 4k a month, and that does open up a lot of better choices for me.
Whether to rent or buy is still a factor, I guess. I'd like to actually buy something in the 100k range, putting down 25k or so.
I'm embarrassed to tell my financial advisor I changed my mind, need to access some of my money now on a yearly basis, and by the way, I need 15-25k upfront for a down payment or a year's rent when I told them I wouldn't need any money right now originally.
If I am remembering right, don't you have something like $750K saved up? Is it invested in non retirement accounts? If I were in your shoes, I would pull some income from the interest--so if it's invested and you're making 8% a year, take 3% home as income. That would give you another $22k/year before taxes, which would open more housing options, and your money would still be growing.
Yes, about half is in retirement accounts and half is not. I know I could pull out approximately 36k a year without touching principal, but I also have been advised to really try, if at all possible, to avoid taking anything out.
Would you put that extra money towards a nicer place as far as renting or buying? It just kind of saddens me to put so much into rent, especially into places that aren't all that great.
I do have my sister continuing to look at rentals while I'm out of town.
Where is the Greenbrier? I'm sorry if you told me this---I have looked at SO many places the past week that they all blend together and I don't see them on my spreadsheet.
We are willing to go out to Irwin or Greensburg at this point, although Greensburg would be a long commute for both of us. We liked a townhouse community in Irwin but no vacancies.
Greenbriar Village. It's over in Scott Twp, on the other side of town. I know it's not ideal, but it might be a good back-up.
Have you looked out in Delmont, too?
I'm seeing a ton of places for less than $900. Have you looked at any of these?
Scott Township is over an hour from where my sister works right now. I would be okay with it (it's far from my family), but I don't think she can realistically drive 1 hour to work and 1 hour home every day for the little money she makes.
I have looked out as far as Plum and Murrysville. I think Delmont is beyond there, but I can definitely look.
I didn't like the Villages of Easton because it is only one bathroom. Literally the only thing I wanted in an apartment was two bathrooms (well, 1.5).
I really like Walnut Crossings and that's a safe area, thank you!
Alcoma--I don't know anything about, I will check it out.
LOVE Deauville but I think their 1.5 bathroom places are about $1075. I know their availability is limited too though. But I hear they are nice.
Holiday Park--I LOVE them. Above my price though for any that have 1.5 bathrooms and the one building is far superior to the others, I will say. They're a bit further out but neighborhood is fine and safe. This is one of my backup places, actually---I have a few places that I could possibly go to if nothing turns up for me that I like.
I'm kind of laughing that buying a house would be cheaper. There's a lot of expenses, many unexpected, that come with home ownership.
I know---I'm just really struggling. I hate getting the rude treatment when I call a place: "Your income isn't high enough, we don't allow pets, you can't paint, and I'll need a year of rent upfront." Like, I'd like my life to improve a little bit---someday, I'd like to get a dog and not be broke and see a color other than white on the walls.
I already live in an apartment and have for 7 years now total--I guess I wanted to get something with a little outdoor space since I'm at home 24 hours a day, or at least something I can make a little homier.
I just can't afford $800+utilities and then not be able to save to get out of there someday, you know?
I think your expectations are too high. There are very few 2BR/2BA places there - you rarely get 2 bathrooms when you have 2 bedrooms. Have you checked out Greenbriar? It really was not all that bad. I still think you need to check out places a bit further out, like in Irwin or Greensburg. You're going to have to compromise on something.
Having done a similar search a few years ago, I cannot think of anywhere safe out there where you can find a $100K home that doesn't need a ton of work, so I would not buy a home.
Where is the Greenbrier? I'm sorry if you told me this---I have looked at SO many places the past week that they all blend together and I don't see them on my spreadsheet.
We are willing to go out to Irwin or Greensburg at this point, although Greensburg would be a long commute for both of us. We liked a townhouse community in Irwin but no vacancies.
It's hard to move across the country, buy a house and immediately take possession and fix it up. I think you are basically trying to accomplish a hole in one. I realize you are familiar with the area, but it's still difficult and exhausting.
I think your best bet is to continue to meet clients at Panera and SB and acknowledge that you are going to have to pay more in rent than you want in order to get a nice place. You could accomplish that by pulling from savings to do so or working a 2nd job. I'd go with the former in your situation.
It *is* so difficult and exhausting. I am already pulling from our savings now to make ends meet and I can't do that forever. I was hoping to decrease my costs by getting a roommate.
I did decrease my health insurance and cut everything possible from my budget. I just have to figure out a way to make more money, and I feel like I need something more professional than Starbucks or Panera to get there. It's a pipe dream, I know. I work from home, so I don't want to hate where I live.
We also have an apartment full of stuff and I just can't bear right now to part with any of it for emotional reasons, so I need a place that can fit it. It isn't a lot of stuff (it's only a one bedroom), but it is things that are important to me that I really do want to fit in my place.
Kwynn - what does your sister do? If she's only making $1K/month, I'm wondering if it's worth her looking for another job in a different part of town. She should easily be able to make that much money even doing something like waiting tables.
I don't want to say too much on here, but she works doing clerical work, minimum wage. She's been there for two years, and prior to that, she was laid off twice due to her workplaces closing (once in 2009, once in 2010). It sucks---she's had a string of bad luck.
Where do you live that there are NO rentals available in your price range that are livable? As for what you're finding? Why are utilities $300/month?? Why have you chosen a roommate who's income is the same as the average rent? Have you looked into the possibility of not having a roommate and renting a 1 bedroom or a studio? What would those rent for? Or IMO, find a new roommate.
DO NOT buy a house just because it's cheaper than what you can find for a rental right now, especially one that isn't in a great area. But if you have run the numbers, qualify for a downpayment, closing costs, mortgage+ taxes+ insurance+ utilities (comfortably, not just what they say you can afford) then look for a house that needs minimal work in a good area where you would happily live for 5+ years..
Also remember that many rentals do not allow you to operate a business out of the rental property...so perhaps you need to focus on buying anyway?
I wanted to answer some of your questions.
1. Where do you live that there are NO rentals available in your price range that are livable? I will be in Pittsburgh. I am open to anything but I've seen some really, really bad places lately (and I live in a very small apartment now so I promise I'm not picky). The last place we looked was $525/month, had cat urine stains, and the ceiling was falling down in the hallway. Rent has really risen here in the past 4 years or so it seems.
2. Why are utilities $300/month?? Average gas is $86/month according to the local newspaper. $80/month is electricity. Water is $80/month, trash and sewage is like $10/month, and internet is like $50. That's ballparking from what it used to be the last time I rented in like 2007. 3. Why have you chosen a roommate who's income is the same as the average rent? Have you looked into the possibility of not having a roommate and renting a 1 bedroom or a studio? What would those rent for? Or IMO, find a new roommate. I realize her income is not ideal. I'm really stuck here. I don't make much money either---it's my sister and she's the only one I could find to move in with me on short notice. I haven't lived in the area in years. A one bedroom or studio is like $600+ and the utilities would still be high--I live by myself right now and was trying to reduce expenses by getting a roommate.
4. Also remember that many rentals do not allow you to operate a business out of the rental property...so perhaps you need to focus on buying anyway? That's another problem, I know...I just don't know what to do about that. My current landlord does allow it, but many, many do not and I am trying to feel out the situation with each HOA and landlord.
I missed the backstory on this. I'm so sorry you are going through this.
15k OOP a year for your medical insurance seems like a lot...any chance you can switch to better insurance? I have a terrible plan and even mine isn't that bad.
Is it prescription drugs that are expensive? I believe some drug companies have assistance.
Can your DH get another job with group insurance?
I feel for you---what about disability, like Aflac, etc, or SSDI? I could be totally wrong about all this stuff, just trying to think about the slowly draining medical bills.
Can you get a raise? Or start a second job or side job to break even on the medical expenses and stop dipping into savings to preserve it?
Can you drop your DH from insurance for right now and stop driving his car? Add him back when he is healthy.
Have you considered having your church or friends host a spaghetti dinner, etc, for you guys? That can help with some of the costs (I know it is tough to ask, but just a thought).
Not finding any decent rentals, I looked at a house for 50k. It looked GREAT online, needed so much work in person that was expensive, such as a bathroom remodel to be usable, kitchen remodel, electrical.
I do not have much handyman experience and am a widow. Do not have any handy family members either. I ruled the house out.
Now, WWYD?:
I make $2000/month. My roommate makes $1000. Places within commutable distance from her job are running $900+utilities and are not in great shape. I run a business from home and would like to be able to have clients to my home. Right now, I use coffee shops and Paneras though. I prefer two toilets.
Running the numbers, $900+utilities (on average $300/month) is tight. More than I want to spend and it is at the top of my budget range--doable but tight.
Worse still, we are finding NOTHING in that range. I'm not picky, it needs to have usable bathrooms, appliances, and not be in bad shape, that's all. I'd like for it to be suitable for a client, but that's a pipe dream.
I'm exploring the idea of buying. I truly do wish I could rent, but what do you do when buying is cheaper than renting in your city/area even considering property taxes, insurance, and maintenance?
I have assets, not much income. Most rental properties require me to do first, last, and security, and then because we don't meet the income guidelines, pay the whole year up front. That's like 15k---a downpayment on a home.
I can't undertake a major fixer right now. A minor fixer is okay. Saw a great house today, bad neighborhood. Looking at other possibilities now, all around 100k (so mortgage amount would be 70-80k-ish and $700 a month, with a roommate paying some of that).
Is it even possible to look from out of state, take one trip in, buy, and move in all within 4 months?
Can you get a mortgage with little income but an amount of savings far exceeding the mortgage amount?
Am I in over my head?
I cannot find a month to month lease either and want to avoid two times, alone, within a year if possible.
Thanks, ladies---I don't want to buy, but with rent so high, I can't really save anything every month to put towards an eventual purchase.
Is an apartment out of the question? Even something with a short lease while you continue looking.
I can't find anything that would let me do a less than 12 month lease. I really, really, really do not want to move twice--not making excuses for myself, but it's been a really hard year, and this will be my 4th move in seven years (each more than 100 miles), so I'd rather try, if possible, to just do it once. Especially as I have no help, have to hire movers each time, and am trying to run a business.
But it may come down to that option and that's my backup for sure!
Other than Craigslist (I have looked every day since June there) or driving around and looking for signs that say "for rent," where are good places to find homes for rent?
I'm getting nervous---haven't found anything in my price range yet that is acceptable/clean and within a reasonable commute to my roommate's job.
I cried yesterday thinking I may be forced into purchasing a cheap townhouse just to have a place to live, that's how slim the pickings are. (I prefer to just rent and not buy right now)
I called probably 15 real estate agencies too of homes that have been on the market for 9+ months with the hopes that one of those owners would consider renting, but no, none are.
I have one more place that I have been trying to see for a week and the rental agent still hasn't returned my call. Other than that, I'm leaving to go back to Florida soon. It's been a whole week of looking in person and I just won't have that kind of time again for awhile.
Congrats and be careful! What state so we can recommend financial planners/attorneys?
I would not give any money to family right now. It's how so many people get into trouble.
Also, if you win 1mil, isn't that the annuity amount? And the lump sum is even less? And then taxes are more than 25%?
I'd speak to a financial advisor as fast as possible due to tax implications. Just do not make any rash decisions and don't change your lifestyle right now.
It's for sale or rent...it needs WAY, way too much work. I chickened out and crossed it off my list.
I'm alone and work 80 hours a week and don't currently live in the state where I'm relocating. It seems like a huge stressor to try to live in a place that needs major, major work. And I don't have any family help on things really as far as handyman skills, or even just general assistance.
So it's a no-go. I'm bummed. I'll figure something out...the right fit for me will emerge somewhere!
If it's a one bedroom, where would your roommate sleep?
I think it could be a smart move, but I'm not sure I would pay all cash. I would look into paying half in cash and financing the rest. Then pay it off in a year or two.
Two bedroom I'm cheap, but not that crazy to make my sister sleep on the floor or something.
Lauren, I'll send you the link
Peggy, the house is so cute in the snow---when it melts, you can see the stairs are a bit rickety and the bannister is busted a little. The church parking---my parents go there, I'll ask them.
It sounds like a reasonable option to me, assuming the inspection shows no big problems, etc. The one thing I would say is, lack of a dishwasher, crappy porch, even just one bathroom -- those are really minor problems that I would just deal with. I'm sorry to say this and it's going to come across as tactless either way, but until you have the life insurance money in your hand I would not count on that as income. I know someone whose husband died of a heart attack and she is still being dragged through court to get his life insurance. Just go based on your current income, and save up for any big repairs that may crop up. It sounds as if you'll be fine either way.
Yes, I've heard of this--I've heard it can be a huge pain and I'm so sorry for your friend's loss I wasn't going to apply but did at the urging of several ppl as life insurance money just makes me feel so gross, you know?...without the life insurance I would still have 370k saved that we saved up as a couple. I don't really want to touch any of that money of course.
When you say you'd deal with the little things, like crappy porch, only one bath--would you ever consider fixing them? I don't want to let any place I own get too run down--I thought I'd fix stuff slowly as I could afford it and do so modestly.
I don't think you're obligated to pay any of the costs to return an item if the item which you receive was not the item which you purchased. It's his fault for choosing to expedite the shipping without charging for expedited shipping, and it's his fault for sending you the wrong product.
He's being sketchy. Completely sketchy. He wants YOU to relist it? Oh no way.
I'd send it back (I'd make him send me a postage thing and make him insure it). And if he won't refund your money, eBay and Paypal almost always side with the buyer.
I feel like he pulled a fast one.
I own a business, and I understand that, when I screw up, I lose money, not the customer. And I do expedited shipping all the time for free as a courtesy and never bring that up to the client--that's MY choice.
I'm guessing that since you mentioned mls that you like the house better than similar ones for sale, not that you just happened upon it being for sale when you looked to rent it. If so, I'd definitely do it. I imagine it would be nice to keep your monthly expenses low since your monthly budget is a little tight.
I might be way overstepping here, but I'm guessing that making this leap solo is a extremely difficult and I wish you all the best. I'm not shy about being a big fan of home ownership. My property investments have made me a lot of money and while a little uncomfortable jumping into, have really been pretty low risk. Find a good agent and go for it! Good luck!
I was hoping you'd weigh in! This house reminds me of your blog a bit. And like you, I'm in a lower cost area.
You aren't overstepping---it's so scary to do this by myself. It's not a dream home, it's a starter home, and I always worry about getting screwed.
I loved the other place with the detached garage, etc, but it would be double the price to rent. But that's a someday home for me...
I was trying to tell my sister "I know this girl, well, I don't know her, I met her on the Internet, but she has done flips and rentals and they were low cost and smaller homes and..." My sister all gave me the side-eye, like "Someone on the Internet? You don't know those ppl...you talk to strangers on the Internet?!"
I was all, "Her name is, uh, bunchanumbers..." and then I just let the topic drop because I sounded so stupid trying to explain chit chatting about money to people on the interwebz.
I think this sounds fine, provided you are in an area you plan to stay. This is Pittsburgh? Does that mean you moved back home by family? I thought you were in FL but I recall your family was from somewhere else (I don't remember where, I'm just guessing from your follow up above!).
I might consider taking out a mortgage, too, if this would drain your savings. I assume you have good credit and can make a nice down payment so your mortgage rate should be very low. I would think that might ease some of the financial strain/what if stuff since I'm guessing the mortgage payment will be low and you could always dip into your savings if you had a rough month or something. Unless you are keeping all of that savings liquid and not earning any interest on it, I guess.
Would you HAVE TO have a roommate or would that just be a way of making this more manageable? If you think it would be too tight without a second person living there, I might give more pause since a) roommates are a PITA if you don't find the right one and b) roommates can also be unreliable.
I don't *have* to have a roommate...I don't have one currently. But it would free up my budget---without a roommate, I'm really tight on money, and utilities in the north are higher. Without a roommate, my places to rent are really very limited at $500/month or so. I love living by myself but it does get lonely sometimes.
My sister is going to be my roommate. It is hard to find a good one, but she needs to reduce her expenses too. She also works for me in my business from home. She will probably buy her own place in about five years.
I'm living in Florida now, but my parents and in-laws live in Pittsburgh, so that's where I'm moving back to. The houses I talk about above are both there. So even if I don't stay forever (I plan to stay for the foreseeable future, but then again, we planned to stay in Florida for the next 10 years and look what life threw my way), I have family in the area that wouldn't make it an impossible rental.
The idea of buying a 100-year-old house on a smaller income makes me really nervous. I'd want to know the mortgage, taxes, state of the roof/furnace/foundation, and exactly what's going on with your savings situation before I could say yes or no though.
I left it vague on here on purpose, but I realize it doesn't help to give a good answer.
I will delete this part , but just throwing this out there:
To rent this house, it would be $600/month plus utilities. I would have a roommate. I budgeted $1000/month on rent max plus utilities. So my share would be $300/month plus utilities. I currently pay $670 a month and average $100 in utilities, so I pay right now $770/month. I can make it fine, it's not great, but it's okay.
The house is listed for 51k. I haven't even taken a really good look at it yet, still deciding if I even want to pursue this house at all in any fashion, rent or buy.
If I put 10k down, my payment would be about $400/month on a 10-15 year mortgage. Property taxes run about $100/month. My roommate would be paying $300/month plus utilities. Or I could put down any number of things, from 3.5% down to pay cash for it, that would all depend.
My net worth (if I get life insurance) is $770k, of which $60k is liquid and the rest is invested for me. Business money is separate.
I'd have to have inspections done completely of course.
Not sure if that gives a better picture.
I get bummed thinking I'll never be able to afford to own and will always have the expense of renting every month, never having a paid off expense like a house. I know it's so hard on a low income, but I hate moving and rent is my biggest expense every month.
I live in a LCOL area. I was not truly aware of high taxes are until we were really ready to buy. Our taxes are more than our mortgage payment. I would look into those and make sure you can really afford the house. I'll admit ignorance, but I feel like in LCOL everyone tells you to buy a house because they are so cheap, but we still pay a decent amount on our monthly payment.
Good call--I believe the taxes are around $100/month on the place. So not cheap but not terrible--taxes just went up for many in the area due to reassessments.
Is it normal to not get use of a garage or workshop or shed? Saw a GREAT house, but there is tons of stuff in the yard, and it appears the large workshop and garage are going to be used by the owners still for their side business
Whether or not it's normal, we ran into that. We rented an SFH a few years back, and got use of the driveway, but not the garage.
It was super frustrating, because the lease terms were such that we were responsible for snow removal and yard work, but WHERE THE HELL WERE WE SUPPOSED TO KEEP THE DAMN LAWNMOWER? The living room?
It didn't seem reasonable to me, but the landlord was adamant. We didn't last long there.
That's what I was wondering. I'm mainly concerned because, when I went to look at the home, I saw a car in the driveway and the owners were stopping by and getting their business things. There was a huge pile of junk and their dog was let out of the car and running loose on the property.
Was it annoying in your case, like were the owners always coming over at any time? Checking up on the place? (I live in an apartment now and so things are different). I lived in a townhouse 6 years ago and the landlord and I both used the shed, so no big deal in that case. Just wondering if that feels really weird--what if they're in the driveway behind me or need to get into it and I'm blocking it and out of town or sleeping or something?
if it's below your budget, yahoo! However. 1915 houses typically do not have electrical or plumbing systems that are up to code, and seldom have adequate heating, air conditioning or insulation either. I would not buy a house this old without first having an inspection from a termite person, structural engineer, electrical expert and plumbing expert. These kinds of places can rapidly turn into a huge, and I mean huge, money pit.
Yes, absolutely, I would not do anything without full inspections. Even then I'd proceed with caution as I grew up in a house built in 1900 and it certainly had tons of problems.
That area of the country has a lot of older homes though---the house I like second best is from 1924--everything is just old up in Pittsburgh.
I vote buy a house and we can be neighbors, if you're thinking of the area I'm in. Houses here are extremely inexpensive. Depending on your mortgage rate and the ROI you're getting on your liquid savings, would it make more sense to take out a small mortgage and keep the savings liquid?
I am You can probably figure out which house this is on the MLS. It's by the Catholic Church, hinthint.
You have the money, so I'd max the 401k for both and the Roths for both. Then look at non-retirement investments. I'd probably pay off my dad (I personally don't like owing money to family members) and then the furniture.