1. The situation:
Saw some pictures of a 1 bedroom / 1 bath – fabulous location, awesome amenities including balconies and fitness center / spa, gorgeous building with gated entry and underground parking and tons of space (the ad said huge closets!).
2. The issue: The price (and the one-year lease).
The cheapest 1bed/1bath in that complex starts at $1,250, and that’s after amortizing the one-month free deal. I may be able to negotiate a 6-month rent, but that’d probably include a $50-$100/month premium (which would put it really out of my budget).
3. The considerations:
$1,250 is actually a really good price – I’ve seen similar places go for $1,500 in the same area (do I sound as if I’m rationalizing?). But – $1,250 still a big fixed expense. Another consideration – do I really need all those wonderful features such as the fitness center, balconies, spa room, etc.? I’ve gone without granite counters in my kitchen so far, surely I can do so for a while longer. Must balance need vs. want…
4. The budget:
My current budget for the new place is $1,000 for rent and a six-month lease. I may be able to “afford” up to $1,500 in rent and still save some, but I’m a huge fan of keeping my fixed expenses low at this point in my life.
5. The question: Can I afford to increase my budget and pay more to live in a nicer apartment?
6. The real questions (thanks to Single Ma!):
- Will this purchase delay progress towards my financial goals? YES
- Will this purchase result in consumer debt? NO
- Will I regret this purchase in a month? I don’t think so (I’ll be too busy enjoying my balcony!) But if I lose my job, I’d really rather not have such an expensive place.
7. The answer:
I need to think about this. If I decide that I can’t afford it, I probably won’t even visit this building (or similar ones) in person. No use falling in love with an apartment that’s out of my budget!
*Don’t you love how at the end of my 7 steps I haven’t really answered my question? Heehee.
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Ohhh, girl. Granite countertops for $1,250? That’s kind of amazing. We pay $1,100 for our one bedroom in Santa Barbara, and, well… Our apartment is 80s-tastic.
Can’t tell you what to do (you’re so responsible. You’ll make the right choice) but I can envy the possibility of a sweet kitchen…
Hope you’re well!
L
Maybe you need 8 steps? Or 9? Hehe.
For me, I found paying for amenities was a waste, except the balcony (but maybe because the “heated” pool felt like ice and i like to run outside), so I steered away from big complexes this time. That is a personal thing.
Look at as many as you can, preferably most in your price range! You certainly can afford it, but do you want to sacrifice the saving power?
I’m really curious about the neighborhood. Where D and I will be moving, $1,250 is probably about the going rate on a nice one-bedroom apt, so I don’t think it’s terribly unreasonable. Then again, we’ll be splitting it in half.
My thought is that it’s not just $500 per month that you can’t save; it’s $500 per month that you’ve given up any choice to for an entire year. If it’s worth it to you, then just make sure you get your money’s worth out of the fitness center and balcony!
Good luck with your decision!
I think you just get to a point in life when you want to live somewhere nicer, and not deal with shitty cheap apartments any more. I got there a year ago and now live in beautiful 2 bed, and now can’t believe some of the places I used to live in! To me though, it kind of equals out because I live somewhere nice, I go out less because I’m not going out all the time to escape annoying housemates etc. If it’s a priority to you to have a nice home, you’re going to be more willing to spend more to do so.
Wow….I don’t have the level of money to live in a $1250 a month apartment. I have a studio ( very big and spacious) for $430 a month. It is just me and I have folks telling me that I should get a 1 bedroom. The places that I look either wanted to put me in a box…or they cost ways out of my budget. I can afford something in the $515-550 range but that also added the energy bill as well. I guess it depends on the area. I wish that more affordable housing was available. Until then I will keep saving and get a house instead.
Really try to negotiate with these places. I am in Real Estate and the commissions apartment complexes are offering these days are amazing since the value of all properties have decreased drastically and unfortunately no sign of coming up in the near future. Good Luck!
Whew, Texas gives me sticker shock when I see others’ rent.
Rent is always negotiable, especially now. I got a good deal because I rented a condo from an individual on Craigslist. It might be worth plowing through all those broker ads to find one.
I also really love padmapper.com
Reverse sticker shock! I read your blog almost daily but never comment…but the sticker shock was enough to get me typing.
My one-bedroom in the suburbs (okay, Brooklyn–big city to me, suburbs to others) runs $1600/month, and I was excited to get a “balcony” aka fire escape, accessible by climbing over the couch and through the window.
A nice place for 1250 sounds like a deal to me!
Without knowing the exact neighborhood you are looking at it’s hard to judge the price. The last rent I paid in LA was $1045 for a largish studio in West Hollywood. When i lived in the OC one apt was in a large complex with pool, fitness center etc and I never used them once. I always made a list of my must have features and maximum price I could afford and went from there. For me it was always reserved parking, a dishwasher and heat/ac. Rents are supposedly coming down so keep looking, there may be a place that has everything you want at a better price.
Wow, that’s a good deal. My last one bedroom in Culver City was $2,200. It was huge though, granite countertops, steel kitchen appliances, washer/dryer in unit, balcony, pool, gym, underground parking.
My current two bedroom in Long Beach costs $2,063, and features all of the above.
Have I ever used the pool? No. The gym? Maybe once or twice. The balcony gets annoying because it gets dusty (why on earth is it so dusty in CA??) So you don’t really need those amenities like a pool and gym. Because really, it’s like a gym membership. How many people get suckered into buying one, and then never go?
But if the difference in that $250 means looking at absolute crap apartments, and then that nice one for $1,250, i’d go for the more expensive ones.
I don’t totally agree with asking the question “will this delay my progress towards my financial goals” to evaluate spending issues. Why? Because EVERYthing you buy delays your progress! With that reasoning, you should be living with your parents for free and saving 100% of your income if possible.
It’s OK to spend for what you want. Don’t spend more than 40% of your pay on housing (incl utilities), and make sure you’re saving adequately (10% for retirement, 5-10% for shorter term goals), and then if you want to use $1,250 of what’s left towards a comfy apt, then do it and don’t feel guilty!
I spend “too much” on travel and “way too much” on shopping, and sure that money COULD be going into savings, but I already save plenty so I don’t really care. What’s the point in continually depriving yourself for the sake of tomorrow if you really can afford what you want today?
In other words, maybe your *goal* is really to live in a nice apartment during this period in your life. You’ve done what you need to get your income and habits in a place where you can afford it. So if that’s one of your goals, consider it reached and do it! And then do what you want to reach your next goal – owning a home. And then don’t stress about doing that because it will delay your retirement goal – do it and then start to save for the next thing! That way you enjoy all your goals – AND your life along the way.
I would recommend finding something less expensive. The incremental $250/month is a lot of money; at the end of 6 months, that’s enough for 1 month’s living expenses for anyone whose job is at risk in this economy, and at the end of 12 months it’s enough to cover 3 grad school applications & interview trips.
I love my place now, but man I’d be in much better shape toward paying for my MBA if I hadn’t lived alone the past 3 years.
I would take a cheaper place and save the money toward the down payment of a house. I rather pay for a nicer house (with granite counter top and patio and others) of my own than paying more money for an apartment that I will never own
I live in Las Veas and it sounds like we are starting to have comparable rent rates which sickens me. Not to be a snob but isin’t Cali suppose to be more expensive because its, well, Cali? You have the beach and cooler weather and Disneyland. Anyhoo, Rambo and I pay 950 for rent and a fixed rate water plan. We live in a prime location ( the third nicest one in Las Vegas) and our apartment is close to around 11 years old. And its 720 sq feet! Your rent and expectations sound reasonable so I wish you the best of luck and hope your apartment fantasies are fulfilled
Where do you live? (Area wise?)
I live in Sydney, and pay $220AUD a week to share a 2 bedroom/2 bathroom. So I do have my own bathroom (with a bath!) but share kitchen/laundry/living etc.
So really, $1,250 a month doesn’t sound like that much to have a place on your own!
If you plan on renting for a while I think you should get something nice that you really like as long as you won’t be ‘house poor’ (or ‘apartment poor’ as the case may be). My current apt is cheap ($465/month) but after living there for 6 years I’m starting to get sick of it. It’s small and things are falling apart and man, what I wouldn’t give for granite countertops.
Plus if you have a bigger apartment, you can have your friends OVER instead of going out!
After I make a decision, I’m definitely going to do some follow-up steps.
I hope the weekend viewings go well!