Relocating decisions (Santa Clarita, Orange: real estate, 2014, apartments)

[dragonwalker]

I just confirmed with my landlord today that he intends to sell the home I am renting a room in and will be giving notice to all of us to move when the housing market stabilizes which he anticipates will be in the next 6 months. I have lived here for 7 years currently pay $570 per month which includes all utilities. It's been a great ride honestly with how cheap it's been. I do live in a house with 6 other people but it has worked out very well.

I will soon need to look for a new place but I wanted to get some advice on the most efficient way to do this. Coincidentally I have been thinking of moving for awhile now but the low rent has kept me here. I am 32 and currently live in the suburbs of LA. My work happens to be relocating to Santa Clarita, CA which is an area north of LA sometime at the end of this year. I would seek to live somewhere near where my work will be.

Over the last few years about purchasing my own place but I feel prices are now to high. I could do it especially with work having a program of getting a 1.5% ARM so long as I work there. A condo would be what I would be in the market for but running the cost benefit it doesn't seem to be the best bet with prices so high at this time however that was considering the rent I pay now at $570 and not the higher amount I would almost certainly need to pay.

One option is trying to find a living arrangement similar to my own. Upon reviewing listings on craigslist it looks there is nothing quite like the situation I have but various rooms in houses will run $800/ month and higher. I strongly prefer renting from someone as opposed to leasing together with a stranger where I may run the risk of that person needing to move or unable to pay for various reasons and dealing with that drama.

Another option is finding my own apartment/studio. It's possible at a minimum of about $1300/month+utilities with 1 years leases. Although cheaper than my current area it just seems to be a poor value. The place is old and in an "ok" area. The area that my work is relocating is actually known to be an area that housing is not as expensive but even then single apartments don't seem to be appealing.

What are some options people on here think I may not be considering or is it time to take out the pen and paper to figure out buying in this market? Judging by the type of person I am I'm likely to stay at any place for an extended period of time. The other factor I'm considering is I feel I'm getting into a part of my life where I think it's fair that I have my own place that's a bit more established like my own property or apartment. There is some pride in that consideration but I am fortunate in that I have no need of my own place such as my own family but sometimes I feel where I live now and type of place I would live has some bearing in being successful finding someone (a bit of another topic).

So far I've checked out Craigslist, Facebook groups, and roommates.com. Nothing really sticks out to me as particularly interesting. All more expensive and not as great a value. Do any of you guys know of similar websites to find living arrangements or is there any other element in this process I may not be considering? I am fortunate in that my landlord says that he will likely give me 60 days notice before the time comes and I have the option of moving temporarily into my mother's home until I find the most suitable place. Thanks.

[socal88]

Sounds like you had a good ride there with cheap rent. But I'd say now is the time to bust out the pen and paper, or better yet, the plethora of mortgage/rent calculators online to see how much house you can afford or get an apartment if buying is out of reach. As you mention, perhaps now is the time to get a place of your own, especially if you intend to stay for an extended period of time.

First off, what is the maximum monthly mortgage/rent that you can afford?

Even in and around Santa Clarita, where you can get more bang for your buck, there are very few homes under $500K, which assuming you put 20% down, is still going to run a monthly payment (mortgage/property taxes/HOA, etc.) of a little over $2,000/month. If that's too high for you, then I'd either look into buying a condo/townhouse or rent an apartment. But with buying a condo/townhouse, you can end up paying a lot in HOA, especially if it's newer with more amenities, so depending on the situation, you may not be paying that much less compared to a smaller home. And with a home, you'll likely get greater price appreciation and build up equity.

Not sure you're necessarily going to find better value in one year compared to today, but if you're unsure of buying vs. renting, maybe temporarily moving in with your mother and saving up more to buy a home is the way to go.

[ElDiabloJoe]

My buddy did that! He had a great garden apartment near a college in Orange County. For years his rent was $750 (when market rents were $1200-1500) and he split that with a roommate. He paid $450 for the primary bedroom and the roommate paid $300. This was largely due to being owned (and fully paid off) complex of 6 or 8 single-level apartments on a level acre lot.

I encouraged him to leave that all behind and buy a townhome. He did so. About 5 years after leaving the apartment to his roommate, the roommate had to move. The owner passed away and the family moved to increase rents to market rates.

My friend meanwhile built equity via mortgage payments and ended up selling for $200,000 more than he bought it for. Now he is retired and bought a lakefront lot in another state. He built a brand spanking new 3000 square foot home on that lake and he did it all because he saved money during the cheap rent days so he had a down payment for his townhome.

The secret to retiring comfortably is to acquire real estate in Southern California as early as you can, and continue to parlay its gains to your advantage.

Hope this helps you in your journey.

[dragonwalker]

@socal, if I were to buy I'm looking at a condo. It's just that homes and condos seem really high in price and present a poor value in addition for them to being expensive for a first time home buyer.

@Eldiablo, although I see what you are saying about home purchasing and the equity I gain over time. The stock market over these last 10 years have been very good to me and in fact running some number on a home I was in escrow in for back in 2014 till now I would have still come out more ahead doing what I do now then if I purchased. Ofcourse no one knows what the future holds though.

[TimTheEnchanter]

I would buy a three bedroom condo the SCV and get two roommates. Hopefully with your very low rent the last 7 years you saved gobs of money the last 7 years.

[ImmerLernen]

Originally Posted by dragonwalker

@socal, if I were to buy I'm looking at a condo. It's just that homes and condos seem really high in price and present a poor value in addition for them to being expensive for a first time home buyer.

The prices *are* high, but that doesn't make them a poor value. With mortgage rates being so low, you'd be foolish to not take advantage of today's "cheap" money. That's where the value lies.

Since you think a condo would suit you (as opposed to a single-family home), start looking for one close to your work. And, as already recommended, if space allows, you can find your own roommate(s). And then, when you're ready to live without roommates, you won't need to be the one who moves.

I think you're at the perfect stage of life to make this move. Hopefully you've been saving up for a down payment while you've been paying such cheap rent. Good luck!