My husband and I can't buy a home in L.A. because we're spending too much money on avocado toast. Just kidding—fancy brunch isn't the problem. The problem is that houses, even "starter" homes in decent neighborhoods, are too expensive. If we wanted to purchase a home in Highland Park, it would likely cost around $737,700 (the median home value for that neighborhood, according to Zillow). That would mean forking up close to $150,000 as a downpayment. Other desirable neighborhoods, such as Echo Park and Silver Lake are even more expensive (each have median values of $868,600 and $1,133,400, respectively).
So, starting September 1st, my husband and I will be doing the closest thing we can to buying a dream home: moving into our third rental in our four years living in Los Angeles. It's a two-bedroom, two-bath house with its own private porch, basement, and driveway in Highland Park for $3,500. The thing is, the house is $1,100 more than we're currently paying for our two-bedroom, one-bath townhouse. After entering our salaries into a rent calculator we found on the internet, we reasoned that we can technically do it—but it will be tight.
Yes, we know paying more in rent will endanger our ability to squirrel money away into our Let's Finally Buy A House fund and also mean losing the opportunity to invest in property that could yield in a high ROI when we choose to sell and retire. But guess what: We've decided it's the best thing for us right now in our lives (a.k.a. all that matters). Here's how we're planning on making it work and contribute to savings without feeling too stressed about money left over after our rent gets taken out.
But before I get into my savings plan, I do want to note that while my financial situation may be different from yours, the idea that we may have to re-forecast our budgets in order to afford higher rent (or whatever it is in your life that you're trying to upgrade) is something that I think many can resonate with. And of course it's true that budgets are subjective—while $3,500 rent might sound insane to many (I totally get it, welcome to Los Angeles!), to some, it might be considered a steal. Some of the ways I plan on saving money each month you might be doing already—and if that's the case, I applaud you. You're already ahead of the game. Every person's budgets, needs, and sacrifices are different. I hope that mine offer insight into how one woman is able to manage her money in a way that makes sense for her.
from Apartment Therapy | Saving the world, one room at a time https://www.apartmenttherapy.com/save-money-afford-rent-increase-261366
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