Id stick with your cheap renting situation until you increase your income. Putting nearly $2,000 (you didn't include utilities) towards housing on your income of $3,300 is not a smart move.
Thank you! I must reveal that my apartment is about 430 sq ft, but it's fine for the most part; I can only be in one room at a time haha. I'm not sure being strapped every month outweighs any benefits from more space.
It’s better to rent and save more versus buy into a house and be house poor. Unfortunately a LOT of people don’t understand this and still rush into a house to build “equity” …
Play your cards right and buy when the numbers make sense.
Thank you, my thoughts as well. If I find a house I absolutely love, it might be worth it as a purchase, but considering the true cost of owning a home over the years with maintenance and interest, it's not exactly an investment if I'm living in it.
PLEASE if you aren’t listening to it already… The Dave Ramsey show on youtube, podcast, radio station… it will help you settle/manage all your finances and get you prepared for these big life decisions AND they have a number you can call to ask questions or email them and they will answer your questions. THEY ARE GREAT!
[the Dave Ramsey Show podcast](https://podcasts.apple.com/us/podcast/the-ramsey-show/id77001367?i=1000659449273)
There's only so much internet people speculating call tell you. What I would recommend is a stress test by setting aside a simulated monthly payment into a HYSA for a few months. It will not only give you some real-life understanding of how much you can actually afford, but it will also build a contingency fund because you will likely need some unexpected upkeep.
Oh sure, I know, thank you. I just needed some confirmation that I'm not being totally weird and miserly about this. I have an admittedly stupid amount of cash stashed in an HYSA and I do already save and ignore over half of my take home.
*If* I were to buy a house right now, my monthly cash savings would just be drastically reduced.
I’ve seen people put themselves in riskier situations, but I would stick with the renting route and build up your savings even more. you still need to include some sort of maintenance and repairs in your budget that rent would be crazy to give up.
Thank you! Yes, as nice as having a bit more space and no upstairs neighbors would be, I'd very much like to avoid "owning a home" being the only thing I can afford to do every month.
That rent seems like an amazing deal at $650/month assuming it works for you now. Maybe wait until that modest cash infusion and then revisit the idea?
Eventually allocating a larger % of income towards housing is fine if you know that home ownership is something that really matters to you. I would just make sure you account for the extras like maintenance and potential taxes/insurance increases each year, so that you're looking at the full number and can decide if it's worth lowering other budget categories like vacation, or entertainment, or dining out.
I know you're right, thank you. It's ultimately up to me to decide what owning a home is worth to me. I've gotten spoiled with cheap rent in an incredibly convenient location...hard to imagine giving it up for a new area at a higher cost.
I would agree with your math. And I would have a lot of issues buying a house I didn't feel I could afford with money promised by others.
However, I do wonder if you aren't being too strict with what your are deeming acceptable to buy. If you are currently living in a house that rents for $650, it seems odd that anything you deem buyable would cost 3x as much. Do you have house where the landlord just doesn't care about market rent so is vastly under priced? Because usually landlords charge enough to cover mortgage (or replacement) tax, insurance, maintenance/repairs plus profit, so it mathematically should be cheaper to buy.
I live in a ~430 sq ft apartment, three rooms and a bath. It's cheap even by that standard, I know. High ceilings, big windows, quiet street...so I'm not totally suffering. My landlord is pretty chill and lives in the neighborhood. I think he was just able to buy fixer-uppers at the right time; I know he has several properties. I've been living here quietly for over a decade, and I have to imagine that has something to do with it; if I move, I'm assuming he'll jump the rent up to be a little closer to market rate.
The housing market in my city has gone bonkers over the past few years, relatively speaking. A lot of homes nearby that need to be gutted are at the top of my budget.
Rent is the ceiling you’ll pay. Mortgage is the floor. There are a LOT of costs that come up with home ownership people don’t always think about.
A roof is $20k+. Need trees cut down? Couple thousand. Appliances are all on you, too. First year in my house, refrigerator, oven, dishwasher, HVAC all went out. You own the home, you’re paying for that.
Wait for better rates, or better prices, and to see the impact of the changes to real estate commission.
Thank you, I like that saying. It costs SO MUCH to maintain a home and it's daunting to think about being the sole caretaker of anything. I'm not against owning, I just want to make sure I'm not in over my head. I appreciate your input!
With rapidly rising rent costs, this isn't always the case. Rent in my area has nearly tripled since before COVID. Anyone that owned a home before that time, or even early during that time, lucked out by not having massive rising monthly costs. So far home ownership has been roughly the same cost as rent, even with work done on the house. At least with a house I can get that money back when I sell
I hear you; people are renting for 2x my mortgage in my neighborhood, so if the monthly is that different it’s a conversation, but OP’s rent is $650 and he’d be pushing 2/3 of his take home on a mortgage. Small ticket home repairs aren’t a big deal but a roof, an HVAC, etc. takes years to break even on and if you don’t have the cash for it you’re then paying interest on those, too. From the sounds of it, if he bought a house it would clear him out and he wouldn’t have that in reserves.
Id stick with your cheap renting situation until you increase your income. Putting nearly $2,000 (you didn't include utilities) towards housing on your income of $3,300 is not a smart move.
Oh ya, utilities go without saying. Plus I'd still have to eat! Thank you!
That $650 rent is probably the absolute cheapest you’ll ever be paying for living arrangements the rest of your life
Until last year, it was $575...up from $560. I've been living here a long time hah. My landlord finally learned about inflation, I guess! 😆
Thats incredibly cheap. Are you in the US?
Yep! It makes no sense!
Where in the US????? Rent in my area starts at ~$2500/m
It depends on the neighborhood, but I think the average rent here is probably somewhere around $1,000-$1,200. My rent is far from the norm!
The rent is a far better deal until you need more space
Thank you! I must reveal that my apartment is about 430 sq ft, but it's fine for the most part; I can only be in one room at a time haha. I'm not sure being strapped every month outweighs any benefits from more space.
Wife and I lived in an apartment until we had multiple children.
It’s better to rent and save more versus buy into a house and be house poor. Unfortunately a LOT of people don’t understand this and still rush into a house to build “equity” … Play your cards right and buy when the numbers make sense.
Thank you, my thoughts as well. If I find a house I absolutely love, it might be worth it as a purchase, but considering the true cost of owning a home over the years with maintenance and interest, it's not exactly an investment if I'm living in it.
How much savings do you have in cash aside from your retirement savings?
PLEASE if you aren’t listening to it already… The Dave Ramsey show on youtube, podcast, radio station… it will help you settle/manage all your finances and get you prepared for these big life decisions AND they have a number you can call to ask questions or email them and they will answer your questions. THEY ARE GREAT! [the Dave Ramsey Show podcast](https://podcasts.apple.com/us/podcast/the-ramsey-show/id77001367?i=1000659449273)
I missed your comment somehow; thank you, I will check it out!
There's only so much internet people speculating call tell you. What I would recommend is a stress test by setting aside a simulated monthly payment into a HYSA for a few months. It will not only give you some real-life understanding of how much you can actually afford, but it will also build a contingency fund because you will likely need some unexpected upkeep.
Oh sure, I know, thank you. I just needed some confirmation that I'm not being totally weird and miserly about this. I have an admittedly stupid amount of cash stashed in an HYSA and I do already save and ignore over half of my take home. *If* I were to buy a house right now, my monthly cash savings would just be drastically reduced.
I’ve seen people put themselves in riskier situations, but I would stick with the renting route and build up your savings even more. you still need to include some sort of maintenance and repairs in your budget that rent would be crazy to give up.
Thank you! Yes, as nice as having a bit more space and no upstairs neighbors would be, I'd very much like to avoid "owning a home" being the only thing I can afford to do every month.
That rent seems like an amazing deal at $650/month assuming it works for you now. Maybe wait until that modest cash infusion and then revisit the idea? Eventually allocating a larger % of income towards housing is fine if you know that home ownership is something that really matters to you. I would just make sure you account for the extras like maintenance and potential taxes/insurance increases each year, so that you're looking at the full number and can decide if it's worth lowering other budget categories like vacation, or entertainment, or dining out.
I know you're right, thank you. It's ultimately up to me to decide what owning a home is worth to me. I've gotten spoiled with cheap rent in an incredibly convenient location...hard to imagine giving it up for a new area at a higher cost.
I would agree with your math. And I would have a lot of issues buying a house I didn't feel I could afford with money promised by others. However, I do wonder if you aren't being too strict with what your are deeming acceptable to buy. If you are currently living in a house that rents for $650, it seems odd that anything you deem buyable would cost 3x as much. Do you have house where the landlord just doesn't care about market rent so is vastly under priced? Because usually landlords charge enough to cover mortgage (or replacement) tax, insurance, maintenance/repairs plus profit, so it mathematically should be cheaper to buy.
I live in a ~430 sq ft apartment, three rooms and a bath. It's cheap even by that standard, I know. High ceilings, big windows, quiet street...so I'm not totally suffering. My landlord is pretty chill and lives in the neighborhood. I think he was just able to buy fixer-uppers at the right time; I know he has several properties. I've been living here quietly for over a decade, and I have to imagine that has something to do with it; if I move, I'm assuming he'll jump the rent up to be a little closer to market rate. The housing market in my city has gone bonkers over the past few years, relatively speaking. A lot of homes nearby that need to be gutted are at the top of my budget.
I swear I read this same post a month or two ago.
'tweren't me! Maybe you intercepted my brain waves, because I've been thinking about this A LOT.
Rent is the ceiling you’ll pay. Mortgage is the floor. There are a LOT of costs that come up with home ownership people don’t always think about. A roof is $20k+. Need trees cut down? Couple thousand. Appliances are all on you, too. First year in my house, refrigerator, oven, dishwasher, HVAC all went out. You own the home, you’re paying for that. Wait for better rates, or better prices, and to see the impact of the changes to real estate commission.
Thank you, I like that saying. It costs SO MUCH to maintain a home and it's daunting to think about being the sole caretaker of anything. I'm not against owning, I just want to make sure I'm not in over my head. I appreciate your input!
With rapidly rising rent costs, this isn't always the case. Rent in my area has nearly tripled since before COVID. Anyone that owned a home before that time, or even early during that time, lucked out by not having massive rising monthly costs. So far home ownership has been roughly the same cost as rent, even with work done on the house. At least with a house I can get that money back when I sell
I hear you; people are renting for 2x my mortgage in my neighborhood, so if the monthly is that different it’s a conversation, but OP’s rent is $650 and he’d be pushing 2/3 of his take home on a mortgage. Small ticket home repairs aren’t a big deal but a roof, an HVAC, etc. takes years to break even on and if you don’t have the cash for it you’re then paying interest on those, too. From the sounds of it, if he bought a house it would clear him out and he wouldn’t have that in reserves.