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Okay, so I could use all the free advice I can get.
I'm a white male, mid-30's, who lives alone and makes roughly 47K. By the time my current lease is up, my salary will likely increase to about 50-55K. Any additional increases, beyond yearly merit raises or a promotion, will not be in the near future in my current position with my current employer.
I'll be socking away 15% a year to my 401K, which is the max amount my employer will match at 100%.
I work at the airport. I relocated to Columbus when I got the job and lived in Gahanna for a while, at the Arbors of Gahanna. I could afford more, my rent there was only $555 a month, so I moved.
Now I live in Hibernia, still relatively close to the airport. It's a much larger apartment, a step up in almost every way from the Arbors, and I pay about $735 a month.
When my lease is up next March (2008), I'm budgeting about $600 in spending money each month -- AFTER I take into account my 401K, bills, food, insurance, car loan, student loan, etc.
So, here's my dilemma. Making 50 grand a year, living alone, I don't want to be house poor. Which means I could buy a place for about $125 now, without much of a down payment (I've been paying down debt and should be revolving debt free by March 2008, when my current lease is up).
OR I could save money for a few years (minimum 3), and maybe buy a house/condo in the 150K range.
Honestly, that doesn't get anyone a whole lot these days. But let's assume I'm going to stay single and that's all the income I have to work with.
Hibernia is great in my ways, but it is on the east side. And frankly, the complex, beautiful though it is, makes me feel a bit unsafe at night.
What to do? Save to buy a house, or continue to rent? Honestly, a 150K home isn't going to bring me much in the way of investment income, assuming I stay only 5-10 years. 3% yearly return ... 30 grand in 5 years. Less expenses like: roof, exterior/interior upgrades, windows, you know the drill.
I don't know that it's worth it. And quite frankly, I can't stand cookie cutter suburban homes. That leaves the downtown area, GV, VV, Short North, Clintonville, well my point is I know all the areas. I'm a Columbus native and wasn't gone but for a few years before I came back.
What can 150K get me in urban areas, or "homes with character" areas outisde of downtown, like Clintonville? Answer, not a lot. Not a lot at all. It's nice to see areas of Columbus becoming gentrified, like Merion Village, but the bottom line is: These houses are lower middle class homes that people are buying up for the character and central location. Character is minimal, but it's there. Thing is, communities like this would be the first to go in a major economic downturn and return back to neglect -- far sooner, say, then GV, VV, etc.
Any ideas or advice?
Right now, the only apartment complex that I can afford, that I'm truly interested in, that doesn't have poor rating after poor rating on those apartment complex user review sites, is Market Mohawk, which is located downtown.
I could get a very nice Townhouse there for about 975 a month. That's it. That's the only place.
Tell me I'm wrong. Tell me there are other nice apartment complexes in Columbus, in safe areas, to choose from.
Tell me I can get a nice place for 125 - 150. And tell me where. Remember, I don't want some cookie cutter suburban home.
Or, tell me I'm crazy to consider long-term renting (even though 30% of my income [with employer match] goes to my 401K).
Long post! I'm in a mood. And I really could use some advice.
I have some doubt about appreciation in Columbus for the next five years. If you are counting on this like a bank account, I would be a little skeptical. Also, budget in an additional 3% of the price for closing cost, including title insurance and bank loan origination fee, and 7% when you sell. So you can see, 10% of the appreciation is eaten up in fees.
Also, if you go condo, check out the association fees.
With the slow growth in Columbus and the rate of home construction, I don't know that demand will outstrip supply. I kind of think you need to have 10 years in a house to probably see appreciation, and even then it could be minimal. In 1991 I signed a contract on a home in the Hilliard area for $190 K (and added another $20 K to finish the basement and landscape), and today that house goes for about $260 K. That is only an increase of $50 K in 16 years, and then you have to subtract another $25 K to account for the buying and the selling expenses.
And that assumes you can sell it. Many homes don't sell.
You don't want to live in a condo - the HOA fees are ridiculous, and the HOA itself is a hassle - they're little nazis trying to run everyone's lives. I'm a quiet person, pay my bills on time, not very social & the HOA has caused me more of a headache than it's worth.
I really like Westerville, it's a nice place, got some character, plus it's not too much of a drive to Gahanna.
I was looking to buy property with the same criteria as you & a realtor suggested Westgate Park, she said there are a lot of first time buyers there, the houses have a lot of character too, lots of grown trees and nice hardwoods - it seems like it might be a good fit for you too. Those houses are running between $100k to MAYBE $130 or $140k - relatively inexpensive. Definitely look into it!
I would give Gahanna another try. It may not be as great as say Clintoville, but it has a lot of charm and close proximity to Easton, 270 and 670. It also offers easy access to downtown and the university area via 670.
There is a small apartment community off of Agler that tends to stay out of the rental magazines (making it harder to find.) It has brick two-story townhomes. I don't know the name of it, but here are very lose directions...coming off 62 heading into Gahanna, turn left onto Stygler Rd then a quick left onto Agler Rd and it will be a little ways down on your left.
That said, I also like Market Mohawk and think that it is a quaint community if you are looking to spend that $.
Well, the true cost of housing is not just $150K. The yearly outlay includes Property Taxes + Mortgage Interest + Insurance + Maintenance (broken pipes/gutters, lawn maintenence, etc) + Home Owner Association Fees (if you live in a house) or Condo Fees (if you live in Condo).
If you talk to realtor, it is very likely they would "lie" it's great to buy because you would not throw your money away -- they forget to tell you the yearly cost associated above. So, this is why there is a rule of thumb stating that you would break even if you live in your house for 5 years, factoring the 6% sales commission to realtor and assuming 3% yearly appreciation.
Therefore, it's hard for any online poster to just give you a good answer tailored to your specific financial situations and emotional value of a home.
But there is a simple and yet very effective rule in helping you making a good decision no matter where you live -- If your ideal home yearly cost is close to the yearly rental cost of a comparable home/condo, then you should consider buying instead of renting.
In Columbus where home prices are pretty stable and maybe some depreciation coming along, you would have to factor in no appreciation, and be ready to stay in the house for minimal of 5 years.
Or, you can find good bargain of house from some foreclosures. That typically come with higher risk due to potential structure damage + Lien (bad title), but the return is equally rewarding.
If factoring all these costs and if it makes sense to buy, then I will say go ahead because Real Estate is a good diversification to your 401K stock portfolio, unless your portfolio has been made up of tons of REIT (real estate investment trusts) stocks which would mean you have made a very good investment and hedging for your money threw away on rental in the past few years.
I have some doubt about appreciation in Columbus for the next five years. If you are counting on this like a bank account, I would be a little skeptical. Also, budget in an additional 3% of the price for closing cost, including title insurance and bank loan origination fee, and 7% when you sell. So you can see, 10% of the appreciation is eaten up in fees.
Also, if you go condo, check out the association fees.
With the slow growth in Columbus and the rate of home construction, I don't know that demand will outstrip supply. I kind of think you need to have 10 years in a house to probably see appreciation, and even then it could be minimal. In 1991 I signed a contract on a home in the Hilliard area for $190 K (and added another $20 K to finish the basement and landscape), and today that house goes for about $260 K. That is only an increase of $50 K in 16 years, and then you have to subtract another $25 K to account for the buying and the selling expenses.
And that assumes you can sell it. Many homes don't sell.
Thanks for the comments. No, I'm definitely not looking at this as a bank account. If I were, I wouldn't be considering renting in the first place.
You don't want to live in a condo - the HOA fees are ridiculous, and the HOA itself is a hassle - they're little nazis trying to run everyone's lives. I'm a quiet person, pay my bills on time, not very social & the HOA has caused me more of a headache than it's worth.
I really like Westerville, it's a nice place, got some character, plus it's not too much of a drive to Gahanna.
I was looking to buy property with the same criteria as you & a realtor suggested Westgate Park, she said there are a lot of first time buyers there, the houses have a lot of character too, lots of grown trees and nice hardwoods - it seems like it might be a good fit for you too. Those houses are running between $100k to MAYBE $130 or $140k - relatively inexpensive. Definitely look into it!
Hey there, I'm not sure what the HOA acronym stands for, but I'll assume it has to do with condo fees. Maybe Home Owners' Association?
At any rate, I get it. I don't really WANT to buy a condo at all. Condo fees never go away, and they always get worse.
I very much appreciate the suggestion about Westgate. That's not a place I'd considered. I did see a few homes for sale while browsing the realliving.com website and I'll keep an eye on it. I'm a bit worried about the area, thought what I've read (I think it was Wikipedia) stated that areas around it are high crime, but it's holding its own.
Thank you very much. I may go driving around the area tomorrow.
I would give Gahanna another try. It may not be as great as say Clintoville, but it has a lot of charm and close proximity to Easton, 270 and 670. It also offers easy access to downtown and the university area via 670.
There is a small apartment community off of Agler that tends to stay out of the rental magazines (making it harder to find.) It has brick two-story townhomes. I don't know the name of it, but here are very lose directions...coming off 62 heading into Gahanna, turn left onto Stygler Rd then a quick left onto Agler Rd and it will be a little ways down on your left.
That said, I also like Market Mohawk and think that it is a quaint community if you are looking to spend that $.
Good luck with your search!
I guess charm's relative, right? Seriously, where's the affordable charm? I'm not seeing it. Is there a specific are you're thinking about?
Thanks for the Agler apartments suggestion. I'll drive by, directions seem specific enough for me.
Yeah, I do really like MM. Am I looking to spend that cash? Kinda. Especially if I decide I don't want to buy. Free water there, and almost-free cable (used to be free, now there's a small charge). Budgeting that stuff means I can wipe about 60 bucks off the top of the rent.
Ultimately, rent will be about 170 more bucks a month than I'm paying now. I'm considering it. I'll give them my name so I can see a floorplan I'm interested in as they open up.
Well, the true cost of housing is not just $150K. The yearly outlay includes Property Taxes + Mortgage Interest + Insurance + Maintenance (broken pipes/gutters, lawn maintenence, etc) + Home Owner Association Fees (if you live in a house) or Condo Fees (if you live in Condo).
If you talk to realtor, it is very likely they would "lie" it's great to buy because you would not throw your money away -- they forget to tell you the yearly cost associated above. So, this is why there is a rule of thumb stating that you would break even if you live in your house for 5 years, factoring the 6% sales commission to realtor and assuming 3% yearly appreciation.
Therefore, it's hard for any online poster to just give you a good answer tailored to your specific financial situations and emotional value of a home.
But there is a simple and yet very effective rule in helping you making a good decision no matter where you live -- If your ideal home yearly cost is close to the yearly rental cost of a comparable home/condo, then you should consider buying instead of renting.
In Columbus where home prices are pretty stable and maybe some depreciation coming along, you would have to factor in no appreciation, and be ready to stay in the house for minimal of 5 years.
Or, you can find good bargain of house from some foreclosures. That typically come with higher risk due to potential structure damage + Lien (bad title), but the return is equally rewarding.
If factoring all these costs and if it makes sense to buy, then I will say go ahead because Real Estate is a good diversification to your 401K stock portfolio, unless your portfolio has been made up of tons of REIT (real estate investment trusts) stocks which would mean you have made a very good investment and hedging for your money threw away on rental in the past few years.
Thanks for the detailed response. An HOA fee would depend on the neighborhood, wouldn't it? I haven't even considered going to a realtor yet. My reasons are similar to yours. I'd rather do my research online, rather than try to pull the truth from someone with an agenda.
Heres' the thing. Market Mohawk's apartments are unique, to be sure, and every one of them is (if only barely in some cases) priced below $1000. The one I'm most interested in is $975. That's a 2 bedroom (sorta) townhouse, 1211 square feet, with a sunroom, den, two story living room, secured, attached garage, "penthouse" level bedroom, etc. I think, by penthouse, they mean it shares walls with no other unit. Kind of nice.
I'm single right now. That's more than enough space. So, 12 grand a year to live there. I don't know that I could find a house like MM that doesn't cost a lot more. There's a big difference between $975 and $1200 for a house (plus upkeep, upgrades, etc.).
Hmmm. If I could afford even 200K+ on a small house in German Village or Victorian Village or Clintonville, etc. then I could view it more as an investment than simply as a place to live.
Why not take the extra money and spend it on myself?
It really is tough to figure out. I should probably go read some books about it.
Thanks very much. You've given me lots to think about.
I just came across this old thread concern (in part) Market Mohawk apartments. I am also considering renting there and wondered if anyone who has lived there recently could comment on there experience -- particularly, concerning all important questions like: (1) is it noisy? (2) is it safe? (3) how noisy? (4) is the maintenance service good? (5) what kind of noise?
Thanks for any info.
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Try Gahanna Again
Seriously, where's the affordable charm? I'm not seeing it. Is there a specific are you're thinking about?
