It took 6 months to find my new home, 45 days to close, and now that I’m moved in, it’s time to take a look back at the process as a whole. I’ve shared the juicy details and frustrations of starting the search, setting my budget, finding my lender, appraisal drama, and even the letter I sent to the seller. But now that everything’s said and done, I’m just so damn happy to call this place home.
So, the joy of being a first time home-owner and first time landlord aside, it’s time to reflect on how my search evolved over time.
I went into this process looking for a 2BR (bedroom) 2BA (bath) that kept me within a half hour from my office. It had to have a washer dryer, and had to be rentable.
I ended up buying a 3BR 2.5BA (what what) just a bit further from my office – my new commute takes 40 minutes in rush hour, instead of the 30 I was anticipating. The tradeoff, however, yields an extra bedroom and a sweet renter setup.
It has all the bells and whistles I knew I wanted. Washer dryer, two parking spaces, and it’s in a safer location than I was originally anticipating.
Here’s a big difference. I’ll be honest, I went above my anticipated budget of 365K for a 2BR, and instead opted for 427K for the 3BR. While this raises my monthly housing costs, it also drastically increases the rent I can take in for the additional two bedrooms. I was planning on paying about $2000-2400 for my monthly mortgage, insurance, property taxes, HOA dues, and PMI, but I’m looking at monthly payments of about $2800 all in.
That said, 3BRs in the area rent for over $3300, so each rental bedroom can easily go for over $1000 of monthly rent in the area. Because I’ll be living with a close friend, I’m charging her about $1400, as she’ll be taking one extra bedroom and converting the other into an office, which she and I will split. This brings my actual monthly costs to $1400 for a much better place than I’d ever lived.
If I find another roommate, with whom we both want to live, we’d remove the office, rent the third bedroom, and my monthly costs would drop to less than $900 for housing. Insane, for someone who’s rented in Los Angeles and could never find a 1BR close enough to work for less than $1500 a month.
Long-term, when I convert it to a full rental, I’m hoping I’ll have the same luck as the last owner. He’d had the place rented out to engineers in the area, consistently, for upwards of 8 years before selling. Fingers crossed that my future renters are so consistent!
I’ve been all over the place these past few months. Originally I was looking in the Culver City and Inglewood areas. Culver City is way out of my price range, but Fox Hills (the South West corner of Culver City) had a few 2BRs that I looked at – all in the 450-500K range. I told myself I’d consider these if they were amazing, but the rent I could pull in just didn’t justify the costs.
I looked in the Northwest corner of Inglewood, and loved some of the places I found. They were in my price range, in a relatively good neighborhood, but none of them were right – what I mean is, maybe they had a great location, but only 1.5 bathrooms. Not the best situation for living with a renter… and if I wanted to weigh the pros and cons over night, poof. The place was already off the market.
After having the rug pulled out from under me on a few places, I expanded my search out of pure frustration. I’m so glad I did! I started to look in Gardena and neighboring areas, which eventually led me to my new home!
So, I didn’t get what I was picturing. I got something much better, with pros and cons that come from that. Yay: extra rentable bedroom! Boo: higher mortgage payments. All in all, I think it was the best choice for a long-term play. Here’s to hoping that I’m right!