Last year, I was finally able to get a quote for rent for a unit in our actual complex. Since I like to talk full disclosure, the rent for these two places, one year ago was $1,700 and $1,875 a month, with the pricier unit closer to our actual living conditions. Both of these units are owned by private individuals, have no AC, are on the top floor, and have a no pets policy. I've also been flat out honest that I would not rent in this association for various reasons:
- Parking is not ideal. No carports, or garages, or assigned spaces. We get two passes, and while we can always get parking in our complex and have never had to street park, sometimes its far if you get home late.
- There are no amenities (pool, gym, etc)
- There is no AC in the units. It's all portable ones or small wall units and rentals just don't bother with them.
- Rental units also have no upgrades and are stuck with original infrastructure, including backwards windows which are not efficient and do nothing for sounds, so higher utility bills and lots of neighbor noise.
You might ask why we would OWN a place we wouldn't rent:
Well, quite frankly, it is within our budget and will ultimately makes us enough $$$ to afford a detached home down the line, and we picked an ideal location right next to the tot lot for our kid. He can play while I cook and I can watch, see and hear him play with his neighbor friends while i'm prepping dinner.
Also, as the OWNERS we can modify the floor plan to suit our needs (AKA built ins for more space, tearing out closets, fixing flooring, replacing appliances, etc.)... and we can improve the property with new doors and windows for security, more comfortable temps and less noise from neighbors....
All of that combined makes the short commute to my work (15 minutes, no freeways), proximity to a public park (We have direct access via a residential staircase), etc worth it.
Even more so, when I hated our bathroom shower even after re-surfacing the tub, we replaced it and now Hubs doesn't have to duck to shower at a full 6 foot 5 (find an apartment that will do that), and I can soak in a deeper tub at the end of a long day.
2020 Housing Comps
Being a natural "shopper" I did browse the internet again in search for comparable housing situations, and again landed on the same decision to keep this apartment complex we have been using as our comparable unit. Now, this apartment is not in the city we live in, but it is commutable distance to all of our jobs and I have actually lived there and would rent in this area again, so I think that makes for a valid comparison tool. I also think using the same association as a benchmark for all these years really does sink in how much housing costs have risen.
In 2017 when we "moved" from the 1 bedroom to the 2 bedroom we "rented" for $2,061. In January of 2018, the rent went down to $2,015, and we decided to "lock in" a 2 year lease and kept figures the same for both 2018 and 2019. For 2020, surprise, surprise, rent has risen again. We always pick the smallest 2 bedroom floor plan and the cheapest priced unit despite the fact that these often are on the 3rd floor overlooking major roads.
We don't include electric bills below since we'd have to pay for those at either place and both units had electric stoves, but my HOA fee includes water, gas, and trash so those will be listed in the apartment costs. Security and Pet deposits were already paid in hypothetical 2017 ($400.00 + Pet Deposit $400.00), and these are refundable if you live there for 2 years, so if we ever "move apartments" we get this cash back. We will also assume the Washer and Dryer we "hypothetically bought" in 2012 (7.5 years old), will continue to function, thus eliminating the need for the coin operated laundry rooms at the apartment complex.
I'm keeping the mock utility bills the same as last year, when I upped them to factor in 3 people living there versus just me and pricing from 9 years ago.
Costs Associated with Apartment: Monthly:
- Trash: $20 a month
- Water: $100 a month
- Gas: $50 a month
- Rent: $2,120 a month
- Renters Insurance: $15 a month
- Pet Rent: $35 a month
Total: $2,340.00 x 12 months = $28,080
Costs Associated with our condo: Monthly:
- Mortgage: $764.00
- HOA: $367.50
- Property Taxes: $288.00
- Homeowners & Earthquake Insurance: $51
Total: $1,470.50 x 12 months = $17,646.00
Owning my condo is $10,434.00 cheaper than renting, and that's before the $3,000 in equity I gain through just making the minimum payments on our loan.
How is my mortgage so cheap for a high cost of living area?
Well, I bought a dump of a condo at near the bottom of the market 11 years ago, renovated it, and held onto it for 8 years before I SOLD IT. We then turned around and dropped $160,000 from the sale of the first place and used it as our down payment to help us buy our new fixer-upper... to keep the costs down. So this has been smart decisions for the past 11 years.
We are living and renovating it bit by bit and doing what we can ourselves while also paying others for their expertise since we have a four year old along for the ride. We have spent a lot more on repairs and remodel since we bought the unit, but I cover those in our periodic mortgage updates as we journey to get out of the hole, and into profit on this purchase.
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