How Do People Save In DC? (Arlington, Reston: real estate, apartment, to rent)

[DennyCrane]

As someone who's seriously considering moving to DC, the one thing that scares me the most is the cost of living. I'm not married and don't have kids, nor am I carrying a lot of debt. I also work in IT and, based on my research, I think I'll make a decent income in DC, at least enough to pay the high rents there. But I'm also looking ahead to the future. Someday, I'd want to buy a place of my own, not be a perpetual renter. Because I'm single without kids, I wouldn't need a huge place. A townhouse would be ideal. But I've seen the prices out there. 600K for a townhouse that's not even inside the Beltway? I'm not a big spender, I don't live a luxury lifestyle, and I already have a good amount of money saved up. But I worry that it'll take me forever to save up enough to put a decent down payment. My question to the folks who live in NOVA is how do people there manage to save up enough to buy such expensive homes? Do you just never go out or spend your money on anything else? Do you settle for something really small and/or old? Do you buy a home that's more affordable even if it's out in the middle of nowhere? I'm sure there are people in DC who make big money that can afford expensive homes. But what about the rest of the people there?

[Mike From NIU]

I'm not sure what townhomes you've been looking at, but there are a lot of decent townhomes and condos inside the beltway for under $300K. That's still not cheap, mind you, but it's not the stratosphere, either. If you already have a sizable savings already, you might not be that far away from having a sufficient (in your view) downpayment, especially if you would be fine with a 1-2 BR condo.

[Caladium]

"Out in the middle of nowhere" is more interesting here than it is in a lot of other cities. I live in Herndon, which many people consider out in the middle of nowhere. Yet I have all kinds of great restaurants nearby, every store I could imagine (including quite a few upscale stores that you usually find in the big cities), nearby college campuses, an extensive park system, etc. etc.

So that's how I saved money. In my 20s, I did the urban thing and had roommates. After that I developed an appreciation for the suburban life. You can always drive into town (although to be honest the longer I live here and make friends here, the less I have any interest in that. There are plenty of great places to go out in the 'burbs.)

NOTE: If you're under the age of 25 and single, I highly recommend getting a roommate and living inside the beltway. After about age 25 the suburbs start having more appeal.

Also, a lot of other things aren't that expensive here. Groceries, for example, aren't as expensive for us as they were in other cities.

[oneasterisk]

It's possible to save while living in this area, but you have to work at it. For me, it helps that I don't have any college loans to repay since I didn't go to college. I'm in IT too and have made it on certifications, hard work and experience to keep employed. My 3 vehicles are paid off so no loans. I never keep a balance on my credit card. If I can't pay it off at the end of the month, I don't buy it (simple concept that escapes many). I also don't go out to lunch everyday like a lot of others. You'd be suprised the amount of money you can save if you bring lunch. I do go out to lunch one or two days a week though, especially if work is really stressful and I just want to get out of the office.

I don't smoke like a lot of people in this area. I've always been amazed how much people spend on cigarettes/chew/alcohol but they always complain about their other bills. A coworker chews/smokes and yet he doesn't have health insuarance 'cause it's too expensive WTF! Don't get me wrong, I'll go out and have a couple of beers but it's not every week and I don't get blitzed.

I'm 29 and I own a SFH with my brother that we bought in 2003. I also own another SFH completely on my own which I bought earlier this year, that I plan to rent out in a few months. Both houses are in Woodbridge and older homes. One is a 4bd/2bth and the other 3bd/2.5bth with a 1 car garage. They're not extravagant houses by any means but definitely not rat traps either.

I guess it helps that I grew up in a poor immigrant family. Since we didn't have much growing up, my parents taught me to handle money very responsibley. I've still been able to put money away into savings accounts, while still putting money into a 6% into 401k/IRA and two other mutual funds. I still go on vacation on my motorcycle once a year and try to go back to my homeland every 2-3yrs. I'm single so maybe not having a girlfriend to spend my money on helps too

[athousandlogins]

There are tradeoffs involved if you want to buy property in this area, yes. No way around it. You either compromise on commuting distance, or newness/niceness of the property, or size of the property, or some combination of these things. One person who sometimes posts here has mentioned partnering up with a friend to buy a place.

Working in IT, you may also find that your job opportunities are greatest in the suburbs rather than in DC proper, which means the "far-flung" outside-the-Beltway regions might actually be more convenient for you.

In recent years, people of modest means have been able to buy here by taking advantage of ridiculous levels of appreciation. Buying something small, selling in a couple of years at a crazy profit to afford something larger or closer-in. While the market here is still very robust, that rapid fire option isn't quite so feasible anymore (that kind of appreciation wasn't meant to last forever), but the basic principle is sound - you start with the "roof over your head" starter condo to end up with the nice townhouse or SFH.

[DennyCrane]

Hmm. I'm going off what I've seen on some of the real estate search sites. As someone in my 30s, I'm well past the stage of wanting a roommate or living in the city. Suburbs are fine as long as they're not completely cookie-cutter, 30+ miles out from the city, and home to only a handful of singles. I've never been a huge spender. I bring lunch from home everyday, paid off whatever debt I had back in my 20s, and don't waste money on the latest gadgets. Not having a GF or kids certainly helps. But you never know what could happen. A year after moving to DC, I could have a GF and I'd hate to tell her, "I can't go out this week cause I'm already over budget." It's nice to be able to pay your bills, put away money for retirement, and still have a decent cushion in case you lose your job or want to splurge on a vacation or expensive gift for your SO. Maybe the numbers I'm seeing for DC aren't really representative of what's out there. But $1500 for a 1-bedroom apartment doesn't leave a lot for car payment, insurance, Metro fare, and groceries. I just have this feeling that all sorts of little things will really add up and eat into my budget.

[Caladium]

A few thoughts:

Depending on what you like to do for entertainment, there is a lot you can do around here for free or for very little money.

I go out to eat when I'm meeting friends, but I always make my own lunch and breakfast. The grocery stores here are really great, and you can save a lot of money that way.

In many areas you will pay an HOA fee but not city taxes (and you often get gym and pool privileges).

I don't really work hard at saving money (or maybe it's just become such a habit I don't think about it). We live pretty well, although we also live simply. We have kids, and somehow manage to save money. I don't know how to explain it, I guess once you live here you just figure out a way. Last year I was very worried that my husband was going to get laid off. We went into super-frugal mode and were able to save a lot more than we usually do. Now things are much better, we've used those savings to put new windows in the house and we're looking around for an investment. Such is life.

ps. As I recall we had some threads on this topic about 6 months ago. Maybe the search engine could lead you to these threads, where we had some other good suggestions.

[Caladium]

Originally Posted by DennyCrane

Suburbs are fine as long as they're not completely cookie-cutter, 30+ miles out from the city, and home to only a handful of singles.

Vienna might appeal to you, then. Or Reston. The suburbs are predominantly cookie-cutter, however. Most of the area is just a few decades old, so there hasn't been enough time yet to grow beyond the cookie cutter stage.

I don't recall if you saw the Reston or the Vienna photos yet. They will give you an idea if these towns would appeal to you. One problem, though: both Reston and Vienna tend to be pricier than the other nearby towns. There's a poster named JFromReston who always seems to know where the good deals are in Reston. I'd try contacting him.

Reston
Vienna

We don't have a photo tour of Fairfax yet. Maybe Jakila can make one for us?

[oneasterisk]

DC - Have you made a budget and put it on paper? I found that helped me to see what areas I was bleeding. Most of my savings is done automatically so I don't ever see the money in the first place. That helps a lot as I only spend what I saw come in.

The house my brother and I split, my half is $1200 and that includes utilities and a bit extra every month. We've been able to save a lot of cushion in our house fund and looking at replacing the rest of our windows and a couple of other upgrades. The investment property is only $922 PITI. Cheaper than renting and I can write off the taxes/interest.

[novahousehunter]

You are moving from Chicago, right?

I don't think the cost of living is substantially more. The nice yuppie condos do rent for like 2K/month, as they do in Lincoln Park. In Arlington there are big group houses of 20-somethings paying 500/month in shabby houses, sort of like Wrigleyville. If you want location AND to live alone, not cheap.

One DIFFERENCE between the 2, though, is that DC is probably 1/4 the size (geographically) as Chicago. You can live inside Chicago and still be a haul from downtown. DC is much smaller, fewer neighborhoods. Many places that are actually outside DC (Arlington, Bethesda MD, etc.) feel like a continuation of DC. So the close-in burbs here are a lot closer in than they are in Chicago.