Start putting aside the difference in rent vs mortgage. If you can do it, without tapping into it at all, for at least 6 months, then start looking.
But you've got a screaming deal, so likely best to stay put.
Financially it makes sense, but it sounds like logistically it’s not a good situation anymore. I know this is a sub about finance, but the decisions cannot be made in a financial vacuum. OPs mom can’t navigate the house well, electrical problems are always scary.
It's a fair point. I do think 6 months is still a short enough timefeame to handle the challenges and understand the budget.
I also think there's a big difference between renting another place and jumping into buying.
But yes, life is more than money.
OP can’t afford a house in their market and won’t get approved for 800k.
6 months is not nearly enough time to even get close to buying a house in their market at that salary and current monthly rent. Let alone factoring in the rest of their expenses/liabilities
Regardless of the situation a well below market rental is tenuous in that it can change overnight. Setting aside the difference between what you are paying and fair market rent is essential for security. As far as your mom goes look as ways to make your current situation better for her… perhaps repurposing space within your home could help her be more comfortable. A family room or dining room converted to a bedroom for her mobility needs might help.
Great advice. Pretend that you have that mortgage, take the difference, and invest in a Roth IRA. Max it out. Then put the rest in a brokerage account. The money you’re saving is worth the opportunity of owning a house. At least for now.
Why would you do a rothira ? Do a regular brokerage account so he can get the money and gains out. At his income he will need to put 30-40% down to make the monthly payment in LA.
You’re right!
With a longer conversation I’d advise him that his best investment right now is the *lack* of a mortgage. The opportunity cost of buying a house on the rates we have now is higher than that of 1/2 price rent. Again, we don’t know all the particulars, especially on the family front, but if I were him I’d ride this gravy train as long as I could.
I gross $9400 but I have some expenses taken straight out of my check (childcare, union, etc) Also, my mom pays all the utilities and partial rent ($850 - she gets disability). I pay the rest of the rent plus all groceries.
I pay for after school care for my 13 year son because he likes the program, gets homework done, has times with friends, and it's better than having him go home and be lazy. It's literally less than $250 per month and very beneficial for him. How is this relevant to my housing question?
I guess I can understand that...I work for a school district so it's literally the "child care office" that deducts the $$ so I just call it childcare 🤷🏻♀️
Did some very rough math, and u/ShatteredHope would need at least 17,500 per month in gross income to qualify under usual conditions.
***Assumptions:***
* 800k mortgage
* 20% down
* 7% interest, 30 yr term
* 10k/yr property tax
* 1,500/yr insurance
* no HOA or PMI
OP would be looking at about $5,200 per month for P&I plus escrow. Assuming no other debts (foolish assumption) and a 30% DTI threshold required gross income is just shy of 17,500. Any additional monthly debt obligations would add to that.
The mother's portion would be considered income (he's renting her a room in this scenario) but that also means he'd need to start paying tax on it. That puts OP at 10,350/mo, around 7k shy.
If interest rates come back near 3% in the near future that could drop to \~$12k, which could be workable or solved with a slightly higher down payment, but who knows what home prices will be by then (if ever).
I'm sure you could find some banks willing to be lax on the DTI requirements, but I'm certain more cost would get added in via interest rates or some form of insurance.
Sorry OP, wish I had some advice. Your current situation is quickly becoming unworkable with your mother's mobility issues, but this isn't a good solution. I don't know of a better one for you though.
Have you thought about keeping your house and separately renting your mom her own studio or one bedroom single floor apartment?
You have a killer deal for LA, and would be crazy to move. Seriously.
Yeah i realize every time I start looking around how amazing it is, it's like we're rent controlled. The problem is that my mom really can't live independently at this point in time, she's super super limited in what she can do by herself. I've been trying to convince her that we should talk to the landlord about getting permission to add a shower in downstairs - she has her bedroom and a half bathroom on the ground floor. We would pay for the whole thing but would obviously need his permission!! She literally showers a couple times per month now because she can't get up all the stairs but still is convinced it's a non issue.
If I were you I'd contact the landlord and ask them to make changes that would help with mobility. Instead of just offering to pay for the remodel, you could offer to sign a longer-term lease to make the changes worth it. I wouldn't offer to pay more rent, but it may be cheaper to split bathroom costs, agree to manage a bathroom remodel for your landlord without cost to them, or even pay more in rent. Honestly, as a landlord, you paying for a remodel that would increase the property value and make the rental even more desirable for future tenants and paying to still live there while the remodel happens is a fantastic deal for them. So fantastic that paying for the remodel probably shouldn't be your first offer (remember if they wish to update or remodel anything normally the property will be vacant while that's happening and they'd be losing money). Depending on how long you've lived there, laws where you live, accessibility concerns, etc. the landlord may even qualify for some subsidies for this. Realistically having an accessible full bath on the ground floor is a significant boost for that landlord.
From there, you can also consider asking about other changes that might make the house easier to live in. Your landlord should be paying an electrician, flooring repair, etc. anyway and would like have to do so if they wanted to sell the place or rent it to someone else (should you move out). There also may be ways to update/ make the kitchen more accessible that also increase market value (again, I take it the kitchen is almost ten years old at this point given how long you've lived there). Bathroom and kitchen remodels would likely benefit the landlord in the shorter-term (keeping you there longer if they like having you there) and in the longer-term (helping them charge more if and when you do move out).
Then talk to a medical social worker if you mom has one. There are ways to get insurance to cover some things that may be useful and there might be other things you aren't realizing are still fairly affordable that would ease her quality of life. A stair lift, for example, can be purchased for about $2K. You can also consider other things that may make her life easier (example, setting up a coffee station and mini fridge with microwave in someplace she can access more easily than the kitchen so that she can at least do a few things.
Again, getting creative with the landlord may make sense here. I have a friend who was using a wheelchair for a year and a half but couldn't use her parents kitchen easily due to mobility concerns. Her parents' solution was to put in a lovely wet bar in a place she could more easily access. This gave them a countertop at her height, a "wine" fridge, and a sink. With a blender, traveling hot plate, small slow cooker, and microwave she could do a lot more for herself at that wet bar in terms of meals and such and when she was out of the chair and moved out her parents could easily convert it to be used as a wet bar. Another option is a private outdoor shower area and hot tub by the pool (depending on the layout) or an outdoor kitchen. This helps with property value and rentability and also gives your mother a larger place to cook or an additional place to occasionally shower if adding a shower to the half bath isn't feasible.
If you can make some of these changes, then stay at least until you're certain your teenagers are fully out of the house. You could even agree to a lease with your landlord for that long.
Keep saving during that time, on your salary and where you live the bigger a downpayment you have, the better. When your teenagers are out of the house that's when considering purchasing with more down and that's the point where you'll likely need less space and when a 2-bedroom place might actually make sense.
Could you set up a lil mini kitchen in an area accessible for your mum - think mini fridge/air fryer/toaster/electric kettle/microwave - whatever she needs?
I assume she's not the one cooking all the meals every day if her mobility issues are that bad.
Ask the landlord if it’s possible to remodel the bathroom, although, if it’s a half bathroom it’ll be small. Explain to them what’s going on, and what you need and why. I’m sure the LL would be amenable to do it especially since you’re paying for it. Or like someone else said - ask them if they’d consider selling the home to you. Then you can do all the modifications you want to.
Honestly, this is what I would do before leaving such a good rental deal. See what you can work out with the landlord. Adding a shower would probably increase the value of the home. I would offer to split costs with them.
As for the outlets - if that's just a problem with the actual receptacle, those are easy to replace yourself.
I'd be looking for any way to make the house work before paying way more for a smaller house that you'll probably struggle to afford. And with your mom getting older, her expenses are probably only going to increase. I assume you'll be at least partially responsible for her care. She may need a home nurse or other specialty care relatively soon, and that gets expensive.
What about assisted living for your mom? If she has no income and is disabled, I’d look into what social services have to offer. If she doesn’t have much savings, she should be eligible for a facility that accepts Medicaid. I know it’s easier said than done, but you really really should start looking into it because I know it takes time and there’s a bunch of red tape. But if she’s already mostly immobile at 60, you have a long road ahead of you. I see what my mom is going through taking care of my dad, and it really takes a toll on her. What happens when she needs more care than you can offer? She deserves to shower more than a couple times a month. I strongly suggest looking into your options sooner rather than later. Best of luck, I know you’re not in an easy position.
Just weighing in here as an occupational therapist. Do you have a gym membership or can you go to the YMCA weekly? They are required to have accessible showers with a bench, grab bars, hand held shower head. It’s a way to get your mother more showers in without the stairs. Heck for the amount you are “saving” by not moving you could even hire a care assistant to transport and help with the shower and it would still be cheaper than a mortgage.
Isn't there a right to accommodate disability where you live?
Any reasonable request for accommodation should be considered at least.
Someone needs to advocate for your mom. Maybe see if there are some accommodation experts nearby that could help you create a proposal within budget.
Yes, it would be a horrible decision. You'd be paying double the housing costs for less than half the space if you purchased now.
Think about it. You can live in a spacious home for now. Every penny you save on rent is additional down payment on your home.
Half the outlets in my home didn't work they slowly broke through through the years in the old home. I paid an electrician $250. He crawled under the house for about 30 min and now everything works. $250 is a little steep for 30 min work and whatever part he replaced. I don't know and I don't care. One of the best $250 I ever spend.
Good luck.
> $250 is a little steep for 30 min work and whatever part he replaced
$250 for an expert to come to you, do manual labor, fix something productively, and provide the parts is a great price imo.
What!! I had no idea the electricity could be done so cheaply! Thank you for this, I'm going to look into it immediately. Typically I'll fix 90% of the shit in the house and anything that's not expensive to fix I'll just pay it rather than bother the landlord. I just always figured the electricity was a major thing but not worth bothering him over. I'm totally going to check it out now and see!
Oh no I would never DIY electrical, that's why I haven't done it so far! There are certain things I'm not willing to even attempt and electrical work is definitely one of them
If it’s just one socket in an outlet it’s pretty easy and cheap to replace the outlet, just need to turn off the breakers. The tool to test if a socket is live is cheap also. The only complication is if there’s two lines feeding the outlet, one might lead to a wall switch that’s bad or something.
Don’t forget you’ll be paying LA prices. I wouldn’t get too excited if I were you. But if you do find someone cheap and they’re good/legit, pay it forward and spread the word 😃
Ok but I’m not advocating against the repairs for OP in favor of moving/buying. They can stay put and also be prepared to pay more than $250 to fix the electrical. It’s not one or the other.
A $640K mortgage ($800K home - 20% down payment) will be around $4250/month PI alone, add another $1000-1500 for taxes & insurance, more on top of that if there’s an HOA. You’ll also need some money set aside for maintenance and repairs. You can’t afford a home at anywhere near that price point because that’s literally your entire take home.
My suggestion is keep your head down, bring your landlord some cookies or other gifts that make them smile, and start searching for a higher paying job if you want to move.
Your landlord seems happy just covering his costs, regardless of what market rate is. Possible this same mentality might apply to selling? Have you asked him if he’d consider selling to you, and if so, how much?
If you can get a deal, the issues you mentioned can be addressed.
But no, you are not buying anything close to a $800K house netting $6500/mo.
I haven't talked to him about selling, no. Definitely a good idea though. It makes me so sad not to own this house because when we moved in it was worth somewhere around $600k and now it's worth $1.2 million!! I could never afford to pay the market price for the house.
I hear you, but that means sacrifices. If you had a second income to split the mortgage, the taxes, the utilities, ect then yeah, you’d be in a position to buy a house. But you aren’t.
Do NOT move. 🚨 Stay in this rental forever! Hell, try to make nice with the landlords kid.
Sincerely, San Francisco man paying $2800 for 2BR, 1 bath, 1 parking spot (Civic sized), 850 sq. ft. AND I HAVE A FANTASTIC DEAL TOO
That would be a terrible decision. Get permission to install chair lifts and call an electrician (you really should get landlord to pay for electrician). Do some minimal upgrades to kitchen and other areas. Squirrel away what you can.
You definitely cant afford an 800K house on your income. The biggest issue is obviously your mom’s mobility and difficulty accessing the kitchen and shower, because outlets etc can be fixed. How old are your teenagers? Do you expect them to stay local and live at home for college/university? Because if not, you’re looking at <10 years till a 2 bedroom condo could be a reasonable option for you and your mom, and probably not much more than 10 years till it definitely is.
Alternatively, could your mom qualify for a subsidized apartment near you? Elder housing is always ADA compliant and she might get a boost on a wait list because of her disability. You could check with the local council on aging or even her doctor if she goes to a practice that has a social worker.
I just bought a 800k 4 bedroom house, pool, with 10% down, it's been tough and we make 230k a year.
The interest rate is bad right now, and the house + all the little expenses to maintain this house is about 8k per month
My advice if you want to keep your mom living with you and your kids in the same area is to minimally remodel the existing house but you will have to communicate to the landlord
It sucks to have to pay for that, but realistically if you make minor changes for under 20k let's say, that would be the best option
Probably cheaper to rent your mom a first floor/1 floor studio nearby + your rent, if the cheapest house that will need money put into it is $800k. Don’t see how you could afford the house where you are on that salary.
Sounds like your mother's mobility is the real issue. Is there a downstairs room she can switch to? Can you install a staircase mobility elevator? Just about anything is a better deal then giving up your rent
It makes no sense for you to buy something.
How much money do you have saved up?
You're currently paying $2850/month.
You would love to buy a house that has a mortgage payment of... $5600.
In year 1 of paying that mortgage, your **interest** part of the mortgage will start at $5,000/month and slowly drop. Even a $700k loan would still be over $4200/month IN INTEREST.
In addition to the mortgage, that doesn't include property taxes where you are. Property taxes are going to be about another $10,000/year for that house. Now, the monthly payment is more like $6600/month.
But you'll also own your own house. And if you spend $6k/year on maintenance on it, that's another $500/month.
And maybe another $200/month for PMI.
The real cost of ownership of an $800k house with an $800k mortgage is around $7300/month. I realize that you probably have some money, but a mortgage that large will eat up a $100k down payment.
Why not do yourself a thought experiment and deduct $4500/month from your bank account every month and estimate how long it will be until you go broke. If you haven't been saving $4k/month or more, (And on your salary I don't think that's feasible for obvious reasons)
Your desires are your desires, but even if you could qualify for a loan on something like that, it's insanity.
Dude, you're crazy for thinking this is remotely possible.
Can you do things to mitigate her living issues instead? Like for the shower, we ended up getting a camp shower and a small plastic wading pool to catch the water from Walmart for my grandma when she couldn't get upstairs for the main bathroom
Personal finance is personal.
That said you would be INSAINE to change your living situation. You just can not afford it and those issues you mentioned will likly seem much less important if you now tried to live on $2k+ LESS per month.
You are better off taking a couple thousand dollars and working with your landlord to so some minor renovations.
"almost all of our electrical outlets only 1 works" - there is no rational for this. House wiring is wiring wether there is 1 or 2 outlets. Buy new outlets and change out the old ones. Can even get outlets with USB chargers built in for bedrooms. Super cheap solution, and if you can not even change outlets yourself you are not ready to BUY A HOUSE!
The half flights of stairs are tougher but even paying yourself to get stair climbers installed will be cheaper than moving. Can also look at things like https://www.toprostep.com/en/ as a cheaper option. Full stair lifts would be much more pricy but probably be still less than 1 years increase in rent from moving. Could do a lift to get to kitchen as she probably needs regular access to that while you are not home. For shower or if she can survive with a bar fridge and a hot plate/microwave during the day perhaps you can something like https://www.mobilestairlift.com/products/genesis-eco-mobile-stairlift-battery-powered-portable-stair-lift when someone is home to get her to kitchen and shower.
In conclusion, teenagers will be out of the house in a couple years. Figure short term solutions for your mom. Then go from there.
I was kind of in a similar scenario. I net $6800 a month. I was renting for $1550 a month including utilities. One bed one bath nice yard. In the Bay Area, so friends with maybe slightly nicer spaces in the same area were renting for 2500+.
I decided to buy a house for $460k. Interest rates weren't even as high as they currently are, and my mortgage is 3200 a month. The killer though is that there are supplemental property taxes and utilities on top of that that amount to another ~$800 a month. Plus normal maintenance and repairs of a few thousand a year on average.
It is definitely very tight. I went from always saving up to basically living paycheck to paycheck (granted I max my 401k and Roth IRA contributions).
You can definitely not afford a $800k house unless you have a like 50% down payment. I think you would regret anything more than a $400k mortgage
Not in my current area but I'm trying to expand my search within 30 or so minutes driving distance to my work and my kids' current schools. But every time I start looking seriously I wonder if this is just pointless and we're way better off financially staying where we are so then I don't put much effort into looking. I can't decide.
In addition to what everyone else is saying, you also need a backup plan for when your landlord inevitably doesn’t renew to you because they want to cash in on this crazy market with a new tenant. And your plan cannot include your moms disability because she won’t be around forever
Yep exactly what happened to me. Rent was great so I never thought to buy a house, then the house prices doubled in my city so the landlord wanted to sell. Not fun
It has never been less affordable to own a house throw in a plum rental deal and you legit will never pay this low for that much house. My strategy would be to set aside money until housing market corrects or interest rates go down.
> my mom uses a wheelchair and is quickly decreasing in mobility. She has to go up half a flight of stairs for the kitchen and 2 half flights for the shower and this is a huge ordeal for her.
See if the landlord is up for installing a portable chair lift?
> On top of that this house has all sorts of little problems, like almost all of our electrical outlets only 1 works, kitchen is teeny tiny, some floor issues, etc.
uhhhh you need to report the outlet issues, those are electrical issues that need to be checked out
Yeah I try to stay out of his hair and keep being a good tenant!! He had just dealt with a lengthy eviction right before we moved in so I think that's why he's keen to keep on letting us live there forever for the same price...the only reason he even raised the rent a tiny bit was because the gardener and pool service guys raised their prices and he pays for those. We literally talk to the landlord once per year at most, just keep on paying the rent on time and never bothering him and it's worked so I don't really want to start bringing up tons of issues.
I was in a situation similar to yours. From 2010 to 2020, I had a 1-br in a HCoL city for $1000/month. During that time, my rent increased once, to $1050/month. Then I went full remote (my employer intends to keep it that due to the distributed makeup of our team). I couldn't handle the trappings of city living and bought a house with acreage. My mortgage is almost 4x what I was paying in rent, but I'm happy I made this decision. This is the right living space for this stage of my life. I'm still maxing out my retirement accounts and saving more than 1/3rd of my income, so I don't feel like I'm borrowing against my future.
In my opinion, the point of working and making money is to be able to afford the lifestyle we want. If you genuinely want a house, and it sounds like you do, see how much your bank will pre-approve and start looking. You're in a situation where you don't have to move right away, so you can take your time to find the perfect place for your family.
BTW, a 4-br house is not small. lol
Dude stay put. Getting a deal on a housing price is so rare. The economy and corporations cannot STAND when this happens. You and your landlord are sticking it to The Man.
Simulate the cost of owning by putting the mortgage payment into a high yield savings account, and then realize that you get to keep all that money, and that you get TWICE the amount of home for all that money (that is still yours).
If you want/have to stay in LA absolutely don't move. You hit the lottery with that rent, and unfortunately that level of income will get you no where near close to the same quality of living in owning a home. If you truly want to own a similar home without changing your income, it's not gonna happen there, or honestly anywhere in CA for that matter.
Per your explanation, you are paying $2,850 per month for a home that has a realistic market value of (roughly) $5,000 per month. What are you doing with that $2,150 now?
Unless you are putting this $2,150 into a special housing savings fund, I am concerned that you have experienced a life-style creep in the last 10 years. That is why you consider the $5,000 per month needed for a traditional 30 year mortgage to not make sense.
Just wanted to say OP I'm in the exact same situation. Rental market is much more flatline in major CA metros compared to the rest of the country despite housing going up up up. We moved into a nice house rental last year at a quite affordable rate (same cost as a non luxury apartment rental in our area) and our landlord is super low key too. So much that rent isn't increasing next year. I suspect they'll happily rent to us every year forever with minimal rent increases if we wanted to as they seem like low key landlords that don't want to fuss too much.
Even if we weren't taking into lack of rent increases, a mortgage for this exact same house would cost almost x1.5 what we pay in rent in a HCOL market. It's absolutely bonkers how big the delta is. So much so that it'd be a stupid financial decision to burn $2k/mo more just to own.
I suspect a big reason why the market is this way in CA is just how many all cash / low mortgage landlords there are in CA. To these guys, they buy and effectively have no monthly expenses on the property so the rent almost doesn't matter. People who are individually wealthy self starters using up their stock options or whatever and aren't just trying to maximize rental income on what the market will bear. So the housing costs get insane due to how many people are doing this here ESPECIALLY if you need to finance at 6-8% rates, but the rent stays relatively stable. At least, that's my theory...
Customers and Suppliers are equal!!! And this you understand.
So many people don’t get this!!
Treat your supply chain right and they will treat you right!!!
I have so many examples. Congratulations
A common strategy where I lived (another HCOL area) is to buy and continue renting, if you're getting a good deal.
If buying is realistic for you (you have a deposit etc) and you're getting a great deal on rent then you can put some of your savings on rent into topping up the costs on your investment. You can buy something smaller, that's in your price range, and if (/when) prices go up you won't be left behind. When you're ready to buy something to live in you'll have a much larger down payment from capital gains.
The time to buy a house was 3 years ago if you wanted one. If you buy anything you should buy after your children leave. If you haven't saved the difference between market rate and your actual rent then you should not be buying a house.
What size would be your down payment?
I think you need to aggressively save for a few years and then maybe you can find a small home, but a two bedroom condo is going to be worse than the situation you’re in now, as long as your mom can still navigate the stairs (I assume she can’t be moved to be on the same floor as the bathroom)?
If you want a house in that area to call your own you’re going to have to make substantially more or obtain a huge downpayment. You can try becoming a doctor, lawyer, software engineer, ect but sometimes that’s not the reality or everyone would be those things, the best answer might be move elsewhere, where the prices are lower where regular working people with regular salaries can still afford the American dream.
If it needs all that work it won’t rent for 5000/mo but it sounds like the real issue is your mom’s mobility. Are you the only one that can care for her? How much can your mom contribute financially towards a new house. That could be a make or break. You can’t really afford a house in LA on 6500 net unless you stop putting into your 401k to free up some money.
Not every decision is about the money.
It’s good that you’re able to prioritize other things over cash flow. Do what calls you and feels right for your family.
Can you get a chair lift for your mom? Could you build an outdoor shower that has easy access for her? Since you’re in LA, weathers pretty nice year round and a lot of people have outdoor showers with a pool anyway.
Your teenagers will (potentially) be moving out/going to college/etc in the next 5ish years. I would wait until they move to do anything like buy a house.
You’re also overlooking the fact that your mom’s care is going to get more and more expensive. What’s your plan for when she needs full time help? Can she afford it? Can you look into assisted living facilities near your house?
Lots of good advice and points being made but I was unable to actually read it all but did have one concern that I didn't see mentioned. While I think the consensus seems to agree that you have a great deal and for now you should stay put....the issue is all good things come to an end....whoever owns the house now will not own it forever...at the very least that person will die and whoever inherited the house will likely increase rents after your lease is due but most likely sell the home. I think many have mentioned saving up for a downpayment but you really need to go crazy trying to save for this eventuality which might not happen on your timeline.
I was in this situation. Paying for a rent control department, which I hated, and wanting to move. I did move, I’m now paying double and housing costs, but I don’t regret the decision.
Would also be worth it to ask your landlord if they have any other places or if he knows anyone who has a place that would fit your needs better moving forward. Just a thought.
My first instinct is to approach the landlord with a proposal to split the cost of some renovations that would help your mother and improve the place in general. It’s expensive but even if it costs you a year’s rent, you’ll make that back in a year because you’d be paying double elsewhere. But since it’ll take time to recoup your losses, you’ll also want to get a longer lease option as part of the deal to guarantee this is worth it for you.
You’ll want to start by talking to contractors about the cheapest way to make it more accessible for your mother and get some quotes to see if it’s doable and worth it.
And when I say to split the costs, that doesn’t necessarily mean 50/50. That’s something to negotiate. If you’re putting in a new bathroom on the first floor, that increases the value of the home and you want to offer to pay just enough that it seems like a good deal for the landlord. If you’re putting in a chairlift for your mother, that’s not a great value to the landlord and you’d have to pay for most if not all of it.
Could you speak with landlord about paying to have a lift put in on the stairs railing that would making getting around much easier for your mom? This would be SIGNIFICANTLY cheaper than purchasing a home in your area. If you can do this and then save an additional $4k/mo for the next few years to put down a large down payment when you do go to purchase. Personally, I’d offer to have the outlets fixed out of my own pocket if you are truly saving that much on rent.
You can't ask the landlord to install the stair climber for your mom? I'm sure it's not super pricy and may be covered by her insurance honestly. Not sure if that would change your decision.
If I were you I wouldn't move. On 800k, 160k down your mortage would be close to 5k with 5% interest, and 10k in property taxes. I'm almost positive that taxes in Cali would be higher than that but I just threw that on there to see.
This is a classic example of where renting is better than buying. No way this makes sense to buy in that part of the country, given your salary and financial constraints. Get creative and crafty. I am sure the landlord would love you paying to install a bath for momma. Take care of the electrical and thank your lucky stars your rent is <$4k. You could task rabbit and have your electrical dealt with for under $400 I am sure of it. If you ask the landlord to pay rent will go up - possibly a lot.
Other advice about practicing and saving for a larger monthly payment are great. DO NOT HUNT FOR A PURCHASE IN LA/Orange County, you can't afford it. Be grateful and crafty. Stockpile cash and maybe you;ll get lucky with a purchase some day.
Why aren’t you asking the landlord to fix the sockets?? It’s his responsibility. I would stay where you are and ask for the terrible things to be fixed. I live in CA and a 4 bedroom is 4,000 plus for rent. The lady I work for pays 3,500 for a 2 bedroom apartment. I agree with others. Stay, save every penny you can for a large down payment. Not only is real estate at all all time high interest is over 7%. Higher interests kill a new buyer. I would find a way to make it a bit easier for your mom. Maybe a small fridge and microwave on her level?? I definitely would ask for repairs regardless my rent price.
Have you given any thought to trying to purchase the home that you are renting? Maybe even owner financed? You could offer to double the monthly payment in a pay to purchase deal. Still money left over to slowly remodel and make the place wheelchair accessible. It's an easy and profitable exit for a landlord that doesn't like hassles.
My wife and I net approximately 8400/month after taxes etc and our rent is currently $3100 percent n south OC 2 min from the beach.
Unless you have a MASSIVE down payment, owning is going to cost you significantly more at the moment. We have no intention on leaving anytime soon and just use our opportunity in terms of rent cost to save an about $2k per month towards a home. We have approx $115k saved and that only gets us into a condo between 600-800k and $3.5-$5k/month with HOA etc. depending on the cost, it might not even be 20%. that’s not even including closing costs etc.
Well, you could move out of state and comfortably afford a new place. Is your job remote by any chance? I know that seems drastic, but sometimes it’s the best thing. I’m from CA and moved because I just couldn’t afford anything available. I also looked at the property taxes and knew that I couldn’t afford even simple repairs because all my money would go into saving for those. I found a delightful one-story home with easy wheelchair access in a nice neighborhood for $250,000. But it’s in a different state. I told my family about it and they were against it until they found out all the fun things to see and do, then we couldn’t move fast enough! It was the best decision I made for me and my family and my mom. I hope you’re able to find a good place. The best of luck to you.
The problem you have is that you’re significantly under market and apparently still cannot save significant sums of money. I would be very concerned if I were you if your landlord did raise the rent, or decided to sell to someone else who is going to raise the rent. I would use this situation as a wake up call and either work hard on improving your income so you can eventually save enough to buy something or consider relocating. I’m not suggesting moving while rent is cheap, but start thinking about alternatives so you have a plan if your situation does change.
Ask your landlord if they'd invest in ADA features to retain you as their tenant. Strike a negotiation if they aren't willing to pay 100% and don't be afraid to check local ADA zoning laws to bolster your argument.
Sadly, buying a house doesn't seem likely just yet but it may be easier in 5 years when your teens have flown the nest.
You’d probably be better off getting permission from your landlord to install features to make your home more accessible. Since if $2850 a month is cheap even getting two stair lifts is cheaper than buying a house/renting elsewhere.
But ramps are probably more feasible. Especially for half stairs.
https://www.homedepot.com/c/ai/how-to-make-stairs-accessible/9ba683603be9fa5395fab9016d1560ac
And are you saying only one electrical outlet in the house works?
"...almost all of our electrical outlets only 1 works"
This is weird. Are you sure there isn't a switch that turns the other outlet on? It is pretty hard to screw up an outlet in this particular way, to have most of your outlets like this would be super weird.
Back in the 90's I remember an interview on the radio with a fish broker from LA. He realized that he was doing everything via fax, telephone, and email. He moved to rural Nebraska while still getting an LA salary.
It's called arbitrage.
Sheesh these comments are so dark. My mom is early 60's and has been stable for years. Not doing great...but stable. Y'all are acting like she's literally on her death bed.
A mortgage is a 30 year commitment. Is your mom going to be financially contributing into her 90’s? This is a situation where you have to think long term and the cold hard reality is that literally everyone dies. Will you be able to afore that mortgage without your mother contributing? If the answer is no, then you can’t afford it.
in all fairness it’s quite common for multi generations to live together in LA, when OPs children become adults they can possibly chip in if they live at home, or OP can rent spare rooms out to help with mortgage. This is what my mom did with her house, when I live at home with her I help with the $, and spare rooms are always rented out.
Duno why I’m getting downvoted, you live with your mom so obviously you two support each other. 800k is do able imo but money will be very tight, but with that kind of pressure on your shoulder it might push you find a better paying job so who knows. I made 900k offers with similar gross (but no children) in LA market but didn’t get it, but that was with a 5% interest rate back then. My plan was to be house poor and use it as a drive to find jobs with better pay.
Not everyone understands LA market, we take on crazy mortgage and house poor is the reality of the average buyer 🫤
Start putting aside the difference in rent vs mortgage. If you can do it, without tapping into it at all, for at least 6 months, then start looking. But you've got a screaming deal, so likely best to stay put.
If they can't do this, they can't afford to move.
Financially it makes sense, but it sounds like logistically it’s not a good situation anymore. I know this is a sub about finance, but the decisions cannot be made in a financial vacuum. OPs mom can’t navigate the house well, electrical problems are always scary.
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I agree I was trying to cut off the criticism from hardliners in the sub and you all know who you are 🧐
It's a fair point. I do think 6 months is still a short enough timefeame to handle the challenges and understand the budget. I also think there's a big difference between renting another place and jumping into buying. But yes, life is more than money.
OP can’t afford a house in their market and won’t get approved for 800k. 6 months is not nearly enough time to even get close to buying a house in their market at that salary and current monthly rent. Let alone factoring in the rest of their expenses/liabilities
Regardless of the situation a well below market rental is tenuous in that it can change overnight. Setting aside the difference between what you are paying and fair market rent is essential for security. As far as your mom goes look as ways to make your current situation better for her… perhaps repurposing space within your home could help her be more comfortable. A family room or dining room converted to a bedroom for her mobility needs might help.
Great advice. Pretend that you have that mortgage, take the difference, and invest in a Roth IRA. Max it out. Then put the rest in a brokerage account. The money you’re saving is worth the opportunity of owning a house. At least for now.
Do not do this if you need the money for a down payment. Don’t invest money you’ll need in the short term.
Yeah especially if you're looking at a 6 month timeline, stick to a money market, not something that's going to fluctuate in value.
HYSA until they know what they’re doing… better 4.5% > than not having the cash to utilize
HYSA is a better play for this situation than a Roth IRA. Liquidity is the key in this test run.
Great point!!
Why would you do a rothira ? Do a regular brokerage account so he can get the money and gains out. At his income he will need to put 30-40% down to make the monthly payment in LA.
You’re right! With a longer conversation I’d advise him that his best investment right now is the *lack* of a mortgage. The opportunity cost of buying a house on the rates we have now is higher than that of 1/2 price rent. Again, we don’t know all the particulars, especially on the family front, but if I were him I’d ride this gravy train as long as I could.
Absolutely use the low rent to stack up investments
You net 6,500 with rent at 2850? That already seems so tough
I gross $9400 but I have some expenses taken straight out of my check (childcare, union, etc) Also, my mom pays all the utilities and partial rent ($850 - she gets disability). I pay the rest of the rent plus all groceries.
You wouldn't even qualify for a 800k mortgage unless you have a significant downpayment north of 200k
Why are you paying childcare for two teenagers?
I pay for after school care for my 13 year son because he likes the program, gets homework done, has times with friends, and it's better than having him go home and be lazy. It's literally less than $250 per month and very beneficial for him. How is this relevant to my housing question?
$250 a month and they do homework is a bargain for many teens.
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It was a fair question, I was curious as well. But OP also had a good reason for it... Calling it childcare absolutely made it confusing though.
I guess I can understand that...I work for a school district so it's literally the "child care office" that deducts the $$ so I just call it childcare 🤷🏻♀️
There you go again with another solid answer.
That’s not really a normal childcare budget which is why people asked. Normal would be $1500-2000/mo per kid . This is an obvious great deal.
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Interest rates… they have changed.
Did some very rough math, and u/ShatteredHope would need at least 17,500 per month in gross income to qualify under usual conditions. ***Assumptions:*** * 800k mortgage * 20% down * 7% interest, 30 yr term * 10k/yr property tax * 1,500/yr insurance * no HOA or PMI OP would be looking at about $5,200 per month for P&I plus escrow. Assuming no other debts (foolish assumption) and a 30% DTI threshold required gross income is just shy of 17,500. Any additional monthly debt obligations would add to that. The mother's portion would be considered income (he's renting her a room in this scenario) but that also means he'd need to start paying tax on it. That puts OP at 10,350/mo, around 7k shy. If interest rates come back near 3% in the near future that could drop to \~$12k, which could be workable or solved with a slightly higher down payment, but who knows what home prices will be by then (if ever). I'm sure you could find some banks willing to be lax on the DTI requirements, but I'm certain more cost would get added in via interest rates or some form of insurance. Sorry OP, wish I had some advice. Your current situation is quickly becoming unworkable with your mother's mobility issues, but this isn't a good solution. I don't know of a better one for you though.
Have you thought about keeping your house and separately renting your mom her own studio or one bedroom single floor apartment? You have a killer deal for LA, and would be crazy to move. Seriously.
Yeah i realize every time I start looking around how amazing it is, it's like we're rent controlled. The problem is that my mom really can't live independently at this point in time, she's super super limited in what she can do by herself. I've been trying to convince her that we should talk to the landlord about getting permission to add a shower in downstairs - she has her bedroom and a half bathroom on the ground floor. We would pay for the whole thing but would obviously need his permission!! She literally showers a couple times per month now because she can't get up all the stairs but still is convinced it's a non issue.
If I were you I'd contact the landlord and ask them to make changes that would help with mobility. Instead of just offering to pay for the remodel, you could offer to sign a longer-term lease to make the changes worth it. I wouldn't offer to pay more rent, but it may be cheaper to split bathroom costs, agree to manage a bathroom remodel for your landlord without cost to them, or even pay more in rent. Honestly, as a landlord, you paying for a remodel that would increase the property value and make the rental even more desirable for future tenants and paying to still live there while the remodel happens is a fantastic deal for them. So fantastic that paying for the remodel probably shouldn't be your first offer (remember if they wish to update or remodel anything normally the property will be vacant while that's happening and they'd be losing money). Depending on how long you've lived there, laws where you live, accessibility concerns, etc. the landlord may even qualify for some subsidies for this. Realistically having an accessible full bath on the ground floor is a significant boost for that landlord. From there, you can also consider asking about other changes that might make the house easier to live in. Your landlord should be paying an electrician, flooring repair, etc. anyway and would like have to do so if they wanted to sell the place or rent it to someone else (should you move out). There also may be ways to update/ make the kitchen more accessible that also increase market value (again, I take it the kitchen is almost ten years old at this point given how long you've lived there). Bathroom and kitchen remodels would likely benefit the landlord in the shorter-term (keeping you there longer if they like having you there) and in the longer-term (helping them charge more if and when you do move out). Then talk to a medical social worker if you mom has one. There are ways to get insurance to cover some things that may be useful and there might be other things you aren't realizing are still fairly affordable that would ease her quality of life. A stair lift, for example, can be purchased for about $2K. You can also consider other things that may make her life easier (example, setting up a coffee station and mini fridge with microwave in someplace she can access more easily than the kitchen so that she can at least do a few things. Again, getting creative with the landlord may make sense here. I have a friend who was using a wheelchair for a year and a half but couldn't use her parents kitchen easily due to mobility concerns. Her parents' solution was to put in a lovely wet bar in a place she could more easily access. This gave them a countertop at her height, a "wine" fridge, and a sink. With a blender, traveling hot plate, small slow cooker, and microwave she could do a lot more for herself at that wet bar in terms of meals and such and when she was out of the chair and moved out her parents could easily convert it to be used as a wet bar. Another option is a private outdoor shower area and hot tub by the pool (depending on the layout) or an outdoor kitchen. This helps with property value and rentability and also gives your mother a larger place to cook or an additional place to occasionally shower if adding a shower to the half bath isn't feasible. If you can make some of these changes, then stay at least until you're certain your teenagers are fully out of the house. You could even agree to a lease with your landlord for that long. Keep saving during that time, on your salary and where you live the bigger a downpayment you have, the better. When your teenagers are out of the house that's when considering purchasing with more down and that's the point where you'll likely need less space and when a 2-bedroom place might actually make sense.
A chair lift (which might be covered by Medicare) would probably be a cheaper solution.
Could you set up a lil mini kitchen in an area accessible for your mum - think mini fridge/air fryer/toaster/electric kettle/microwave - whatever she needs? I assume she's not the one cooking all the meals every day if her mobility issues are that bad.
Ask the landlord if it’s possible to remodel the bathroom, although, if it’s a half bathroom it’ll be small. Explain to them what’s going on, and what you need and why. I’m sure the LL would be amenable to do it especially since you’re paying for it. Or like someone else said - ask them if they’d consider selling the home to you. Then you can do all the modifications you want to.
this might be a better idea just pay 4 the remodel or split the cost with LL.
Honestly, this is what I would do before leaving such a good rental deal. See what you can work out with the landlord. Adding a shower would probably increase the value of the home. I would offer to split costs with them. As for the outlets - if that's just a problem with the actual receptacle, those are easy to replace yourself. I'd be looking for any way to make the house work before paying way more for a smaller house that you'll probably struggle to afford. And with your mom getting older, her expenses are probably only going to increase. I assume you'll be at least partially responsible for her care. She may need a home nurse or other specialty care relatively soon, and that gets expensive.
What about assisted living for your mom? If she has no income and is disabled, I’d look into what social services have to offer. If she doesn’t have much savings, she should be eligible for a facility that accepts Medicaid. I know it’s easier said than done, but you really really should start looking into it because I know it takes time and there’s a bunch of red tape. But if she’s already mostly immobile at 60, you have a long road ahead of you. I see what my mom is going through taking care of my dad, and it really takes a toll on her. What happens when she needs more care than you can offer? She deserves to shower more than a couple times a month. I strongly suggest looking into your options sooner rather than later. Best of luck, I know you’re not in an easy position.
What about installing a stair assist?
Just weighing in here as an occupational therapist. Do you have a gym membership or can you go to the YMCA weekly? They are required to have accessible showers with a bench, grab bars, hand held shower head. It’s a way to get your mother more showers in without the stairs. Heck for the amount you are “saving” by not moving you could even hire a care assistant to transport and help with the shower and it would still be cheaper than a mortgage.
Isn't there a right to accommodate disability where you live? Any reasonable request for accommodation should be considered at least. Someone needs to advocate for your mom. Maybe see if there are some accommodation experts nearby that could help you create a proposal within budget.
Is there a bedroom upstairs on the same level as bathroom?
Yes, it would be a horrible decision. You'd be paying double the housing costs for less than half the space if you purchased now. Think about it. You can live in a spacious home for now. Every penny you save on rent is additional down payment on your home. Half the outlets in my home didn't work they slowly broke through through the years in the old home. I paid an electrician $250. He crawled under the house for about 30 min and now everything works. $250 is a little steep for 30 min work and whatever part he replaced. I don't know and I don't care. One of the best $250 I ever spend. Good luck.
> $250 is a little steep for 30 min work and whatever part he replaced $250 for an expert to come to you, do manual labor, fix something productively, and provide the parts is a great price imo.
This. Insurance, Taxes, and mortgage Interest will be way more than your rent. Hold out until your landlord sells or jacks up the rent.
> $250 is a little steep for 30 min work and whatever part he replaced. You were paying for his expertise in addition to the time and parts.
That expertise is what makes it a 30min job instead of 4 hours
What!! I had no idea the electricity could be done so cheaply! Thank you for this, I'm going to look into it immediately. Typically I'll fix 90% of the shit in the house and anything that's not expensive to fix I'll just pay it rather than bother the landlord. I just always figured the electricity was a major thing but not worth bothering him over. I'm totally going to check it out now and see!
Please research before you start doing DIY electrical work. Turn off your breakers that control the outlets you are working on.
Oh no I would never DIY electrical, that's why I haven't done it so far! There are certain things I'm not willing to even attempt and electrical work is definitely one of them
If it’s just one socket in an outlet it’s pretty easy and cheap to replace the outlet, just need to turn off the breakers. The tool to test if a socket is live is cheap also. The only complication is if there’s two lines feeding the outlet, one might lead to a wall switch that’s bad or something.
Don’t forget you’ll be paying LA prices. I wouldn’t get too excited if I were you. But if you do find someone cheap and they’re good/legit, pay it forward and spread the word 😃
Even if it's $2000, that's less than a month of the higher costs they'd be paying to move.
Ok but I’m not advocating against the repairs for OP in favor of moving/buying. They can stay put and also be prepared to pay more than $250 to fix the electrical. It’s not one or the other.
You have such a good price. I would never move. Save your money and invest it while you have the rental deal.
A $640K mortgage ($800K home - 20% down payment) will be around $4250/month PI alone, add another $1000-1500 for taxes & insurance, more on top of that if there’s an HOA. You’ll also need some money set aside for maintenance and repairs. You can’t afford a home at anywhere near that price point because that’s literally your entire take home. My suggestion is keep your head down, bring your landlord some cookies or other gifts that make them smile, and start searching for a higher paying job if you want to move.
Your landlord seems happy just covering his costs, regardless of what market rate is. Possible this same mentality might apply to selling? Have you asked him if he’d consider selling to you, and if so, how much? If you can get a deal, the issues you mentioned can be addressed. But no, you are not buying anything close to a $800K house netting $6500/mo.
I don’t know, there’s a lot of issues you can fix with real estate but layout is usually one of the ones you can’t.
Chair lift for the accessibility issues. Tiny kitchen is what it is at OP’s budget.
I haven't talked to him about selling, no. Definitely a good idea though. It makes me so sad not to own this house because when we moved in it was worth somewhere around $600k and now it's worth $1.2 million!! I could never afford to pay the market price for the house.
Does your spouse contribute income to your budget?
I mentioned my mom and kids only in the OP. I don't have a spouse and my kids do not have a second parent involved or contributing to finances.
It’s incredibly expensive owning a house and supporting three others who live there, on one salary.
Well, I mean...that's my life 😅 I've always supported 3 people and this is the highest salary I've ever had.
I hear you, but that means sacrifices. If you had a second income to split the mortgage, the taxes, the utilities, ect then yeah, you’d be in a position to buy a house. But you aren’t.
An electrician to fix the outlets, even if it’s on your dime, and a stair lift would be a lot cheaper.
Do NOT move. 🚨 Stay in this rental forever! Hell, try to make nice with the landlords kid. Sincerely, San Francisco man paying $2800 for 2BR, 1 bath, 1 parking spot (Civic sized), 850 sq. ft. AND I HAVE A FANTASTIC DEAL TOO
That would be a terrible decision. Get permission to install chair lifts and call an electrician (you really should get landlord to pay for electrician). Do some minimal upgrades to kitchen and other areas. Squirrel away what you can.
You definitely cant afford an 800K house on your income. The biggest issue is obviously your mom’s mobility and difficulty accessing the kitchen and shower, because outlets etc can be fixed. How old are your teenagers? Do you expect them to stay local and live at home for college/university? Because if not, you’re looking at <10 years till a 2 bedroom condo could be a reasonable option for you and your mom, and probably not much more than 10 years till it definitely is. Alternatively, could your mom qualify for a subsidized apartment near you? Elder housing is always ADA compliant and she might get a boost on a wait list because of her disability. You could check with the local council on aging or even her doctor if she goes to a practice that has a social worker.
You should leave LA if you want to buy a house. Sorry, it's just not going to happen for you there on that salary.
I just bought a 800k 4 bedroom house, pool, with 10% down, it's been tough and we make 230k a year. The interest rate is bad right now, and the house + all the little expenses to maintain this house is about 8k per month My advice if you want to keep your mom living with you and your kids in the same area is to minimally remodel the existing house but you will have to communicate to the landlord It sucks to have to pay for that, but realistically if you make minor changes for under 20k let's say, that would be the best option
No. Your mortgage will be 2x your rent.
Probably cheaper to rent your mom a first floor/1 floor studio nearby + your rent, if the cheapest house that will need money put into it is $800k. Don’t see how you could afford the house where you are on that salary.
Sounds like your mother's mobility is the real issue. Is there a downstairs room she can switch to? Can you install a staircase mobility elevator? Just about anything is a better deal then giving up your rent
I think it would be much less expensive to invest $10k into this house to fix it up to your needs.
It makes no sense for you to buy something. How much money do you have saved up? You're currently paying $2850/month. You would love to buy a house that has a mortgage payment of... $5600. In year 1 of paying that mortgage, your **interest** part of the mortgage will start at $5,000/month and slowly drop. Even a $700k loan would still be over $4200/month IN INTEREST. In addition to the mortgage, that doesn't include property taxes where you are. Property taxes are going to be about another $10,000/year for that house. Now, the monthly payment is more like $6600/month. But you'll also own your own house. And if you spend $6k/year on maintenance on it, that's another $500/month. And maybe another $200/month for PMI. The real cost of ownership of an $800k house with an $800k mortgage is around $7300/month. I realize that you probably have some money, but a mortgage that large will eat up a $100k down payment. Why not do yourself a thought experiment and deduct $4500/month from your bank account every month and estimate how long it will be until you go broke. If you haven't been saving $4k/month or more, (And on your salary I don't think that's feasible for obvious reasons) Your desires are your desires, but even if you could qualify for a loan on something like that, it's insanity. Dude, you're crazy for thinking this is remotely possible.
Can you do things to mitigate her living issues instead? Like for the shower, we ended up getting a camp shower and a small plastic wading pool to catch the water from Walmart for my grandma when she couldn't get upstairs for the main bathroom
Personal finance is personal. That said you would be INSAINE to change your living situation. You just can not afford it and those issues you mentioned will likly seem much less important if you now tried to live on $2k+ LESS per month. You are better off taking a couple thousand dollars and working with your landlord to so some minor renovations. "almost all of our electrical outlets only 1 works" - there is no rational for this. House wiring is wiring wether there is 1 or 2 outlets. Buy new outlets and change out the old ones. Can even get outlets with USB chargers built in for bedrooms. Super cheap solution, and if you can not even change outlets yourself you are not ready to BUY A HOUSE! The half flights of stairs are tougher but even paying yourself to get stair climbers installed will be cheaper than moving. Can also look at things like https://www.toprostep.com/en/ as a cheaper option. Full stair lifts would be much more pricy but probably be still less than 1 years increase in rent from moving. Could do a lift to get to kitchen as she probably needs regular access to that while you are not home. For shower or if she can survive with a bar fridge and a hot plate/microwave during the day perhaps you can something like https://www.mobilestairlift.com/products/genesis-eco-mobile-stairlift-battery-powered-portable-stair-lift when someone is home to get her to kitchen and shower. In conclusion, teenagers will be out of the house in a couple years. Figure short term solutions for your mom. Then go from there.
I was kind of in a similar scenario. I net $6800 a month. I was renting for $1550 a month including utilities. One bed one bath nice yard. In the Bay Area, so friends with maybe slightly nicer spaces in the same area were renting for 2500+. I decided to buy a house for $460k. Interest rates weren't even as high as they currently are, and my mortgage is 3200 a month. The killer though is that there are supplemental property taxes and utilities on top of that that amount to another ~$800 a month. Plus normal maintenance and repairs of a few thousand a year on average. It is definitely very tight. I went from always saving up to basically living paycheck to paycheck (granted I max my 401k and Roth IRA contributions). You can definitely not afford a $800k house unless you have a like 50% down payment. I think you would regret anything more than a $400k mortgage
Have you found something in your price range that meets your needs?
Not in my current area but I'm trying to expand my search within 30 or so minutes driving distance to my work and my kids' current schools. But every time I start looking seriously I wonder if this is just pointless and we're way better off financially staying where we are so then I don't put much effort into looking. I can't decide.
You need to leave LA/CA for what you want.
You can keep looking, but I'm not sure how likely you'll be able to find something that hits all the criteria.
In addition to what everyone else is saying, you also need a backup plan for when your landlord inevitably doesn’t renew to you because they want to cash in on this crazy market with a new tenant. And your plan cannot include your moms disability because she won’t be around forever
Yep exactly what happened to me. Rent was great so I never thought to buy a house, then the house prices doubled in my city so the landlord wanted to sell. Not fun
It has never been less affordable to own a house throw in a plum rental deal and you legit will never pay this low for that much house. My strategy would be to set aside money until housing market corrects or interest rates go down.
> my mom uses a wheelchair and is quickly decreasing in mobility. She has to go up half a flight of stairs for the kitchen and 2 half flights for the shower and this is a huge ordeal for her. See if the landlord is up for installing a portable chair lift? > On top of that this house has all sorts of little problems, like almost all of our electrical outlets only 1 works, kitchen is teeny tiny, some floor issues, etc. uhhhh you need to report the outlet issues, those are electrical issues that need to be checked out
Maybe they have the worlds nicest landlord, but those things would quickly go from being a very easy tenant.
Yeah I try to stay out of his hair and keep being a good tenant!! He had just dealt with a lengthy eviction right before we moved in so I think that's why he's keen to keep on letting us live there forever for the same price...the only reason he even raised the rent a tiny bit was because the gardener and pool service guys raised their prices and he pays for those. We literally talk to the landlord once per year at most, just keep on paying the rent on time and never bothering him and it's worked so I don't really want to start bringing up tons of issues.
Sublet it to me and find a new apt 😂
I was in a situation similar to yours. From 2010 to 2020, I had a 1-br in a HCoL city for $1000/month. During that time, my rent increased once, to $1050/month. Then I went full remote (my employer intends to keep it that due to the distributed makeup of our team). I couldn't handle the trappings of city living and bought a house with acreage. My mortgage is almost 4x what I was paying in rent, but I'm happy I made this decision. This is the right living space for this stage of my life. I'm still maxing out my retirement accounts and saving more than 1/3rd of my income, so I don't feel like I'm borrowing against my future. In my opinion, the point of working and making money is to be able to afford the lifestyle we want. If you genuinely want a house, and it sounds like you do, see how much your bank will pre-approve and start looking. You're in a situation where you don't have to move right away, so you can take your time to find the perfect place for your family. BTW, a 4-br house is not small. lol
Stay where you are. Get the house updated if needed for accessibility.
Dude stay put. Getting a deal on a housing price is so rare. The economy and corporations cannot STAND when this happens. You and your landlord are sticking it to The Man. Simulate the cost of owning by putting the mortgage payment into a high yield savings account, and then realize that you get to keep all that money, and that you get TWICE the amount of home for all that money (that is still yours).
If you want/have to stay in LA absolutely don't move. You hit the lottery with that rent, and unfortunately that level of income will get you no where near close to the same quality of living in owning a home. If you truly want to own a similar home without changing your income, it's not gonna happen there, or honestly anywhere in CA for that matter.
Per your explanation, you are paying $2,850 per month for a home that has a realistic market value of (roughly) $5,000 per month. What are you doing with that $2,150 now? Unless you are putting this $2,150 into a special housing savings fund, I am concerned that you have experienced a life-style creep in the last 10 years. That is why you consider the $5,000 per month needed for a traditional 30 year mortgage to not make sense.
Just wanted to say OP I'm in the exact same situation. Rental market is much more flatline in major CA metros compared to the rest of the country despite housing going up up up. We moved into a nice house rental last year at a quite affordable rate (same cost as a non luxury apartment rental in our area) and our landlord is super low key too. So much that rent isn't increasing next year. I suspect they'll happily rent to us every year forever with minimal rent increases if we wanted to as they seem like low key landlords that don't want to fuss too much. Even if we weren't taking into lack of rent increases, a mortgage for this exact same house would cost almost x1.5 what we pay in rent in a HCOL market. It's absolutely bonkers how big the delta is. So much so that it'd be a stupid financial decision to burn $2k/mo more just to own. I suspect a big reason why the market is this way in CA is just how many all cash / low mortgage landlords there are in CA. To these guys, they buy and effectively have no monthly expenses on the property so the rent almost doesn't matter. People who are individually wealthy self starters using up their stock options or whatever and aren't just trying to maximize rental income on what the market will bear. So the housing costs get insane due to how many people are doing this here ESPECIALLY if you need to finance at 6-8% rates, but the rent stays relatively stable. At least, that's my theory...
Customers and Suppliers are equal!!! And this you understand. So many people don’t get this!! Treat your supply chain right and they will treat you right!!! I have so many examples. Congratulations
A common strategy where I lived (another HCOL area) is to buy and continue renting, if you're getting a good deal. If buying is realistic for you (you have a deposit etc) and you're getting a great deal on rent then you can put some of your savings on rent into topping up the costs on your investment. You can buy something smaller, that's in your price range, and if (/when) prices go up you won't be left behind. When you're ready to buy something to live in you'll have a much larger down payment from capital gains.
The time to buy a house was 3 years ago if you wanted one. If you buy anything you should buy after your children leave. If you haven't saved the difference between market rate and your actual rent then you should not be buying a house.
What size would be your down payment? I think you need to aggressively save for a few years and then maybe you can find a small home, but a two bedroom condo is going to be worse than the situation you’re in now, as long as your mom can still navigate the stairs (I assume she can’t be moved to be on the same floor as the bathroom)?
If you want a house in that area to call your own you’re going to have to make substantially more or obtain a huge downpayment. You can try becoming a doctor, lawyer, software engineer, ect but sometimes that’s not the reality or everyone would be those things, the best answer might be move elsewhere, where the prices are lower where regular working people with regular salaries can still afford the American dream.
Yeah, if money is tight now getting a degree for those occupations isn’t a good idea.
If it needs all that work it won’t rent for 5000/mo but it sounds like the real issue is your mom’s mobility. Are you the only one that can care for her? How much can your mom contribute financially towards a new house. That could be a make or break. You can’t really afford a house in LA on 6500 net unless you stop putting into your 401k to free up some money.
Maybe ask if you can buy that house
Not every decision is about the money. It’s good that you’re able to prioritize other things over cash flow. Do what calls you and feels right for your family.
you can ask the landlord for stair elevator for your mom if you decide to stay
You need to accumulate a large down payment and stay where you are till you have it.
What about asking your landlord to install a chair lift? Medicare might pay for it (or at least part).
Can you get a chair lift for your mom? Could you build an outdoor shower that has easy access for her? Since you’re in LA, weathers pretty nice year round and a lot of people have outdoor showers with a pool anyway. Your teenagers will (potentially) be moving out/going to college/etc in the next 5ish years. I would wait until they move to do anything like buy a house. You’re also overlooking the fact that your mom’s care is going to get more and more expensive. What’s your plan for when she needs full time help? Can she afford it? Can you look into assisted living facilities near your house?
Lots of good advice and points being made but I was unable to actually read it all but did have one concern that I didn't see mentioned. While I think the consensus seems to agree that you have a great deal and for now you should stay put....the issue is all good things come to an end....whoever owns the house now will not own it forever...at the very least that person will die and whoever inherited the house will likely increase rents after your lease is due but most likely sell the home. I think many have mentioned saving up for a downpayment but you really need to go crazy trying to save for this eventuality which might not happen on your timeline.
I was in this situation. Paying for a rent control department, which I hated, and wanting to move. I did move, I’m now paying double and housing costs, but I don’t regret the decision.
Would also be worth it to ask your landlord if they have any other places or if he knows anyone who has a place that would fit your needs better moving forward. Just a thought.
My first instinct is to approach the landlord with a proposal to split the cost of some renovations that would help your mother and improve the place in general. It’s expensive but even if it costs you a year’s rent, you’ll make that back in a year because you’d be paying double elsewhere. But since it’ll take time to recoup your losses, you’ll also want to get a longer lease option as part of the deal to guarantee this is worth it for you. You’ll want to start by talking to contractors about the cheapest way to make it more accessible for your mother and get some quotes to see if it’s doable and worth it. And when I say to split the costs, that doesn’t necessarily mean 50/50. That’s something to negotiate. If you’re putting in a new bathroom on the first floor, that increases the value of the home and you want to offer to pay just enough that it seems like a good deal for the landlord. If you’re putting in a chairlift for your mother, that’s not a great value to the landlord and you’d have to pay for most if not all of it.
Could you speak with landlord about paying to have a lift put in on the stairs railing that would making getting around much easier for your mom? This would be SIGNIFICANTLY cheaper than purchasing a home in your area. If you can do this and then save an additional $4k/mo for the next few years to put down a large down payment when you do go to purchase. Personally, I’d offer to have the outlets fixed out of my own pocket if you are truly saving that much on rent.
You can't ask the landlord to install the stair climber for your mom? I'm sure it's not super pricy and may be covered by her insurance honestly. Not sure if that would change your decision. If I were you I wouldn't move. On 800k, 160k down your mortage would be close to 5k with 5% interest, and 10k in property taxes. I'm almost positive that taxes in Cali would be higher than that but I just threw that on there to see.
This is a classic example of where renting is better than buying. No way this makes sense to buy in that part of the country, given your salary and financial constraints. Get creative and crafty. I am sure the landlord would love you paying to install a bath for momma. Take care of the electrical and thank your lucky stars your rent is <$4k. You could task rabbit and have your electrical dealt with for under $400 I am sure of it. If you ask the landlord to pay rent will go up - possibly a lot. Other advice about practicing and saving for a larger monthly payment are great. DO NOT HUNT FOR A PURCHASE IN LA/Orange County, you can't afford it. Be grateful and crafty. Stockpile cash and maybe you;ll get lucky with a purchase some day.
Why aren’t you asking the landlord to fix the sockets?? It’s his responsibility. I would stay where you are and ask for the terrible things to be fixed. I live in CA and a 4 bedroom is 4,000 plus for rent. The lady I work for pays 3,500 for a 2 bedroom apartment. I agree with others. Stay, save every penny you can for a large down payment. Not only is real estate at all all time high interest is over 7%. Higher interests kill a new buyer. I would find a way to make it a bit easier for your mom. Maybe a small fridge and microwave on her level?? I definitely would ask for repairs regardless my rent price.
Have you given any thought to trying to purchase the home that you are renting? Maybe even owner financed? You could offer to double the monthly payment in a pay to purchase deal. Still money left over to slowly remodel and make the place wheelchair accessible. It's an easy and profitable exit for a landlord that doesn't like hassles.
I used to live in Culver City. What part of LA are you looking at? I think most condos are 2 stories and have HOAs too don’t forget about that.
My wife and I net approximately 8400/month after taxes etc and our rent is currently $3100 percent n south OC 2 min from the beach. Unless you have a MASSIVE down payment, owning is going to cost you significantly more at the moment. We have no intention on leaving anytime soon and just use our opportunity in terms of rent cost to save an about $2k per month towards a home. We have approx $115k saved and that only gets us into a condo between 600-800k and $3.5-$5k/month with HOA etc. depending on the cost, it might not even be 20%. that’s not even including closing costs etc.
Stay in your rental and buy a house to rent out to make extra cash
Well, you could move out of state and comfortably afford a new place. Is your job remote by any chance? I know that seems drastic, but sometimes it’s the best thing. I’m from CA and moved because I just couldn’t afford anything available. I also looked at the property taxes and knew that I couldn’t afford even simple repairs because all my money would go into saving for those. I found a delightful one-story home with easy wheelchair access in a nice neighborhood for $250,000. But it’s in a different state. I told my family about it and they were against it until they found out all the fun things to see and do, then we couldn’t move fast enough! It was the best decision I made for me and my family and my mom. I hope you’re able to find a good place. The best of luck to you.
Wants and needs. The lines get blurred sometimes, and then we end up doing something that we regret simply bc we confused a want for a need.
The problem you have is that you’re significantly under market and apparently still cannot save significant sums of money. I would be very concerned if I were you if your landlord did raise the rent, or decided to sell to someone else who is going to raise the rent. I would use this situation as a wake up call and either work hard on improving your income so you can eventually save enough to buy something or consider relocating. I’m not suggesting moving while rent is cheap, but start thinking about alternatives so you have a plan if your situation does change.
Ask your landlord if they'd invest in ADA features to retain you as their tenant. Strike a negotiation if they aren't willing to pay 100% and don't be afraid to check local ADA zoning laws to bolster your argument. Sadly, buying a house doesn't seem likely just yet but it may be easier in 5 years when your teens have flown the nest.
You’d probably be better off getting permission from your landlord to install features to make your home more accessible. Since if $2850 a month is cheap even getting two stair lifts is cheaper than buying a house/renting elsewhere. But ramps are probably more feasible. Especially for half stairs. https://www.homedepot.com/c/ai/how-to-make-stairs-accessible/9ba683603be9fa5395fab9016d1560ac And are you saying only one electrical outlet in the house works?
"...almost all of our electrical outlets only 1 works" This is weird. Are you sure there isn't a switch that turns the other outlet on? It is pretty hard to screw up an outlet in this particular way, to have most of your outlets like this would be super weird.
Do you have those cheap Planet Fitness gym memberships out there? She can shower at the gym.
I’ve always told people that cheap rent/control is a crutch that hurts you in the long run.
Back in the 90's I remember an interview on the radio with a fish broker from LA. He realized that he was doing everything via fax, telephone, and email. He moved to rural Nebraska while still getting an LA salary. It's called arbitrage.
I would look into buying if I were you. And 800k is reasonable on 6500 net *only* if your mother can also help chip in.
Mom isn’t going to be alive forever to chip in….
Sheesh these comments are so dark. My mom is early 60's and has been stable for years. Not doing great...but stable. Y'all are acting like she's literally on her death bed.
A mortgage is a 30 year commitment. Is your mom going to be financially contributing into her 90’s? This is a situation where you have to think long term and the cold hard reality is that literally everyone dies. Will you be able to afore that mortgage without your mother contributing? If the answer is no, then you can’t afford it.
in all fairness it’s quite common for multi generations to live together in LA, when OPs children become adults they can possibly chip in if they live at home, or OP can rent spare rooms out to help with mortgage. This is what my mom did with her house, when I live at home with her I help with the $, and spare rooms are always rented out.
Your **mortgage officer** will be thinking this way… it’s not *your* income.
Duno why I’m getting downvoted, you live with your mom so obviously you two support each other. 800k is do able imo but money will be very tight, but with that kind of pressure on your shoulder it might push you find a better paying job so who knows. I made 900k offers with similar gross (but no children) in LA market but didn’t get it, but that was with a 5% interest rate back then. My plan was to be house poor and use it as a drive to find jobs with better pay. Not everyone understands LA market, we take on crazy mortgage and house poor is the reality of the average buyer 🫤