Homeowner vs. Apartment; Am I crazy? (jobs, Budget, furniture, cheapest)

[Mike78613]

Always owning a home, I never experienced living in an apartment long, but I think it is about time.


My wife, about eight months ago lost her fabulous paying job in the high-tech field.
Now w/ her contracting / temping, it has been a whirlwind for us. My wife’s jobs are very low paid and we’re just barely making it. If not, now tapping into our savings and coming close to using my 401k loan to make it for couple of more months.

Then I had an idea. The idea is to sell our home (haha) and move into an affordable apartment close to where my kids are going to school and paying much, much lower payments. I’ll probably save over $800 a month if we was to move to apartments which by the way looks really nice.

I don’t want to do this forever, but enough to where I can send my wife to college full-time as I will be the only one making the money to support the family. I know it will be a huge change giving up that beautiful 2200 sq ft house, with the custom pool I designed and now wanting to make a difference.

I know life is a gamble and homes are dime a dozen. I just want to be sure that what I do tomorrow, we will not regret. Anyone here ever was in the same predicament as us and making these types of sacrifices to better yourself in career / life? If so, please post your thoughts/feedback.

Thanks,

[k350]

Well, not exactly the same.....

I live in an apartment now, I use to own a house in Florida, but bought it only for investment reasons, I sold it right before the very predictable housing crisis and made a healthy profit off of it.

Anyway, instead of buying a house, I chose to reant an apartment because of a few reasons.

I am in college now so I am not settling down anywhere for any extended amount of time, so no reason to buy a house.

I knew that prices will be falling like a rock, so now when I think it has hit rock bottom, I will use my profit and buy maybe 2 houses and make a profit off of them on the upswing, just one option.

I am paying only $550 a month for my apartment of 990 sq ft. So it is small but big enough not to notice or feel cramp. The money I made off my house sale is supplementing my lifestyle while in college and is tied up in conservative investments because I will wait to get a job before I start taking risks.

I like apartment living somewhat, it suits me fine now, it is cheap, do not have to worry about maintenance, and if I don't like it, I can easily move to another place.

The down side is I don't have a yard, I am not a yard weenie but I like growing food. There is no garage and I love tinkering with cars, Also can't do anything with the place other than change the shower head. Plus the walls are thin so you can hear neighbors yelling, stomping around or whatever, its not that they are loud, its just certain sounds go right through the floor and walls.

As far as it being a sacrifice, you have to do what you have to do to be happy. I gave up a really nice paying job to pursue my dreams, which takes me through the path of college. I was just sitting talking with my wife and decided to quit, cold turkey. Went to the college and enrolled and started a few weeks later. How is that for a drastic change?!

[Crew Chief]

Mike 78613, I LOVE owning my own home. The intangibles (we can do with it whatever we want, we don't have neighbors on the other side of the wall, etc.) are what makes it worthwhile. But, you know, I truly believe owning a home is, at the very best, a wash to renting an apartment, financially speaking. We've spent a lot to make our home look nice inside and out, far more than we would've spent on decorating an apartment. And there's no one to call when something breaks in our house. I've often wondered (especially while doing some awful chore...) whether we woudn't have been better off living in an apartment and investing the extra money we've spent on the house. But then I think of the "Neighbor from H**l we had in our last apartment complex and I'm sure glad we own our own home. Best of luck!

[caligurltotx]

Mike78613 you are not alone! There are many people losing their homes in this market and having to go back to apt renting. I say go for it and get into a better position so you can buy again when the time is right.

[Rakin]

It does make sense to cut expenses and sell. My wife & I are "Right sizing" and selling our home for something smaller. We'll probably move to an apartment for awhile, save a little money, figure out where we want to live and pick up a bargain sometime this fall / winter.

[tortoisegirl]

What about a compromise? Rent a smaller, maybe older home.

My fiance and I really want to buy a house right now, but aren't in the right position to do so. We're compromising with renting a larger apartment then we could scrape by with. It also has a garage.

There are a lot of associated expenses with selling a home and moving. You would likely need a storage unit unless you sold off some furniture. Best of luck!

[azoria]

We are now living in a rented apartment, the first apartment I've lived in....I think in 30 years.

At the moment I'm in love with it. Not my roof, not my hot water heater, not my stove/fridge, not my plumbing. The apartment is in good condition but if something goes wrong--it's not my problem. It's the owner's. I don't have to worry about it and I don't have to pay for it.

If I don't like the neighbors or get tired of the neighborhood, or I don't like the view anymore, I can give 30 days notice and just leave. Get a different apartment. Move to another city. Move to another country.

Also for the first time in 30 years I don't own a car. Pretty inconvenient sometimes but I'm not buying gas and tires and insurance.

Somewhere lately I got tired of being owned by my stuff. Owned by mortgage payments and property responsibilities, car maintenance and expenses. It's all gone. And we are living on a much smaller income. Everbody doesn't have to work all the time any more to support all the stuff we own.

We are paying off credit card debt and investing some.

We have seriously downsized our life and I can't tell you how much easier it is. Don't know if I'll ever go back to the way we used to live. It's not looking at all tempting to me right now.

(I do miss my yard.....I'll get over it)

[sweetana3]

An apartment can give you great flexibility at different times of life. We were in one when we were first married and loved it. Great landlord. When we moved across the country, we stayed in one to get settled and get a feel for the new city and when we get older, I plan on one so we have no worries about maintenance.

At each stage, we could afford a house but it did not fit and would tie us down.

You should not use your emotional attachement to one house compromise your whole financial picture now and in the future.

[sponger42]

I would not sell property or stocks right now. In your position (and making a whole boatload of assumptions), I would hold onto the house, sell all but one small, old, efficient car, cancel or downsize all subscriptions (magazines, newspapers, cable, internet, telephone frills) and put the family on a cash-only weekly budget where you withdraw the ammount of cash you can afford, and spend only what's in your wallet that week. Run out of money? Keep a stock of ramen in the cupboard.

If you do go back to an apartment, I would rent the smallest and cheapest apartment you can possibly shoehorn your family into. Renting a big apartment or house does not make financial sense compared to buying. However, if you can SEVERLY downsize (think; 2-3 people sleeping in the living room and each bedroom), you can probably rent for less than the interest payment on even a small home. (My rent is less than 1/2 of the interest payment I'd be throwing away if I bought a house now. Paying down principle is not throwing away money.)

That's MO.

[AlexTx]

Thanks, I'll repost there.

Thanks for the help