NWMR: Apartment vs. House

Dacey · August 2013

KindaWMR, the ladies here are such a valuable resource for objective advice.

Quick Version: Pros/Cons to apartment living with a kid? Would you downsize from 4-bed house to 2-bed apartment to save $815/month?

Background: We bought a 4-bedroom house in Jan '12, right before LO was born. Right now, we just-barely-make-it financially, even with both of us working. It's disheartening, especially when I read the "why I choose to work" threads, and see things like "eating out, a cleaning lady, outsourcing lawncare, vacations, retirement, savings, guilt-free splurges". We are able to save a reasonable amount and contribute to my husband's retirement, but we live on a very tight budget. I know I am being a brat, and deep down I am truly grateful for all I have, but I can't kick this nagging feeling that a dual-income household should be able to function more comfortably than this.

Question: I have analyzed our budget, and cut everywhere I can, and the major expense left is our mortgage, $1600/month. I feel drawn to this beautiful apartment neighborhood, actually 10 minutes closer to DH's work. A 2-bedroom apartment, water included, is $885/month! We would save $815/month (including water savings) if we downsized to an apartment! With that $815/month, I feel like I would actually have choices: to work, live comfortably, and build savings, or have the option to SAH. Would this be worth it to you? What pros/cons to apartment living with a kid should we consider?

Thanks to everyone who read this far...

lollipoppoop · August 2013

If it were me I would try to find a smaller house. Where I live I pay as much for an apartment as I do for my 3 br house (1750 square feet). I hated apartment living though lol

jf198400 · August 2013

If you just bought your house last year I'd be afraid of losing money if you try to sell now. You have to pay taxes, realtor fees, and moving expenses. Also what are your long term goals? Do you plan to have more children (and thus need more space)? I personally would stick it out where you are, I'm assuming you got a good price and good interest rate considering when you bought.

Ps. I'm jealous, our mortgage payment is similar and we just live in a small townhouse.

Curls218 · August 2013

I was thinking along the lines of jf198400

Not only is moving freaking expensive (and selling you may not get more than you paid) but also if you have a 4 bedroom house worth of stuff, what would you do with it if you did downsize to a 2 bedroom apartment? Would you sell/donate everything so you wouldn't need to pay for a storage unit? How long would you plan on staying in the apartment? And remember that rent goes up each year usually, so the savings each month may dwindle over time.

$815/month savings does sound enticing, but I would more look at the long term picture and see what makes more sense for you. Or is there a way to refinance so your mortgage is lower?

financialdiva · August 2013

Have you considered the tax savings of own the home in your figures? Deducting the mortgage interest and property taxes?

What about cutting cable to give your budget some wiggle room? Cutting cell phone plans? Coupons? Renting out a room in your house? ( this one is definitely not a great suggestion, but maybe if you knew a person who needs a room?

aeh72 · August 2013

If you were to downsize and cut your monthly mortgage/rent in half and you decided not to work, would you be able to live comfortably and save without your income, or would you be back to things being tight financially again? DH and I have talked about a similiar idea - selling our house (which is larger than we will truly ever need) and buying something smaller with a lower mortgage, but in doing that, if I quit my job to SAH, things would probably be somewhat tight. In our case, I think to truly live comfortably, I need to bring home a decent income. But, that may be where we live, which is a HCOL area. Maybe you've worked it out financially where that won't be the case for your family, but just consider if you're jumping from the frying pan potentially into the fire if you cut your income out (even with much lower living expenses).

itsmevkb · August 2013

There are times as a home owner that I long for the days of apartment living. If something broke I just called the landlord. If something leaked, same thing, as opposed to my having to pay nearly $8,000 to have a leaky chimney fixed. Also, if we only had one child I'd be fine with a two bedroom apartment.

With that said, I'd want a place that I could "make my own." I lived in a duplex where the landlord let me paint and decorate how I wanted and that made it so much better than living in some horrible apartment white place. We also had a fenced in backyard which was nice. The big downside was that after a year my lease went month to month and so I could have been told to move with only a month's notice. I don't know about you, but I'd hate the pressure of finding a new place, packing and moving in as little as a month. We bought our house when your landlords put the house up for sale. We didn't want a new owner kicking us out with short notice. I'm guessing that's less likely to happen though in a complex than a duplex.

For a savings of over $800 I think I would really, really, really consider moving (so long as you're not planning anymore children anytime soon.)

thedash · August 2013

I would be totally fine with renting if it saved us that much monthly at a time when we really needed the extra room in our budget. My only concern would be what you do about your house. You bought it pretty recently so selling may not earn you any money. In fact you could lose money. Do you think you could rent it for enough to cover most of the expenses? Even if it cost you $100 per month after rental income to keep the house, you'd be saving $700 per month. And still getting some equity in the house.

Maybe talk to a realtor about what you could expect to get as a buying price and as rental income and then do the numbers to see if this is worth it.

Fullcircle06 · August 2013

Is your house likely to sell quickly? I think that would be a big factor for me. If I knew that I could sell my house relatively quickly and then get into a smaller place (whether renting or buying), I'd probably give it some serious consideration. There's also @thedash's idea of renting it. I have no idea if that's an option for you.
We live in an apartment, and I actually kind of like it. It's super quiet, close to work, lots of space and great views. And no maintenance. We do eventually want to buy a house, but that just wasn't an option for us just yet. Anyway, all of that to say that an apartment is totally doable for a family w/small kids. Good luck!

jnnfrrose6 · August 2013

We moved today from a 2 bedroom apartment to a 3 bedroom+office home on our LO's 1st birthday. Apartment living for that first year wasn't a big deal, but I could see it getting tougher quick, though it would depend on the apartment complex too (high rise vs garden style). PP have already mentioned the concerns with selling your home (can you get your money back at this point that you put into it, moving is expensive and stressful, etc). One major factor of course is the age of your child too. You say you save a reasonable amount and fund your husbands 401k. Can those be reduced slightly to take the edge off (certainly don't stop funding them, but can you cut back a little there?). While the savings from moving may look nice on paper, there's always more to it than that.

nosoup4u · August 2013

Look into how feasible selling your house would be. We lived in rental apartments with kids for 4+ years, and it was fine.

scrappingcat · August 2013

We live in a very nice rental apartment right now and DS is 4. DH would like to find a new job and I don't want to buy until he is settled or ok with potential long commute. The one thing I will say is if you go that route make sure you find a property with a lot of green space outside. Our property has fitness center, outdoor pool, over 2 acres of property on a lake, picnic areas/grills to use, ect. This has made the smaller living space much easier to handle!

Pros are that if he does scratch a wall, stain the carpet, ect. there is minimal repercussion as carpet is replaced every time someone new moves in. I also love that I don't need to worry when the dishwasher, stove, fridge, ect breaks. Just call someone and they come and fix it while I'm at work! We also love not having to do yard work with being very busy at work and with activities.

Storage is tight and I will be happy to move into something larger in a year or so but overall we have been fine.

ReeB83 · August 2013

Do it. Save the money.

Apartment living isn't all that bad, especially if you don't live in a "building". We're renting a two flat that is about the size of a small three bedroom house.

Having a house isn't worth it if you can't enjoy your life in it.

Dacey · August 2013

Thanks for all the advice, ladies! You have given me a lot to think about. To answer some questions posed above...

The suggestions to cut cable, cell phones... they're already down to bare-bones now. And I guess to me, getting rid of those things seriously infringes on our quality of life, which brings us back to the original problem - working our butts off and nothing to show for it.

Houses sell very quickly here, and ours is in perfect, move-in-ready condition, in a highly-sought-after school district. I think the first step will be to talk to my realtor. She has always been very honest and open with us, and hopefully she and I can work through how the financial end of selling would come out.

The apartments we're looking at are garden-style. We would be in a first-floor apartment, with only one shared wall. We'd have a big, covered patio for grilling, sandboxes, watertables. It's a very safe, family-friendly area, in a good school district. The apartment neighborhood lies alongside an Arboretum, with nature preserves and a 2 mile walking/running trail, and a natural stream. Playground, pool, lots of open space and fields... But definitely less space than we're used to (700 sq ft less).

Thanks so much mamas... I knew this was the place to turn for logical, sound, objective advice... meanwhile, my MIL is sending me craziness.

Mrs_Lady · August 2013

can you buy a smaller house? I know in this economy it may be tough

groovygrl · August 2013

Based on your description of the place and assuming you don't have to put a ton in storage and pay a lot for that and also that you can sell your house easily etc, it could be worth it for awhile to save up I would think- though also that would be assuming your income(s) would grow over time, not just your savings acct & you wouldn't be in the apt indefinitely? (though I just saw something that you'd then SAH so I guess I'm confused about the motivation- saving $800/month but then having less income coming in does not = saving $800/month. I would also consider whether you will want to get back into the workforce again eventually & how easy that will be and also if you're going to have more kids, which will be more $ and less space...)
We lived briefly in a small 2 BR with 2 kids, 4 floors up with underground parking and it was pretty miserable, the space was way too small in wintertime, the up & down to the parking garage was really frustrating w/ two 2 yr olds (esp when I would get them down & into the car & realize I forgot something ARRGGHHH) and I was constantly worried about them destroying the rental (annoying things like the eating area was in a carpeted room...). I couldn't wait to get out, but again, I think there are much better apt setups that could be very workable (and obviously if your apt is located in a city w/ walkable city conveniences & whatnot it is a totally different situation than in the burbs).
GL!

costa2011 · August 2013

I currently live in a two-bedroom apartment and my daughter is 3 months old. We are building a house right now. I personally don't find anything wrong with apartment living. Everything is included by electric. We have a community gym and pool for the complex along w/ a playground for the kids. It's not so bad. Another HUGE perk is if something breaks...it's on your landlord to dish out the bucks to pay for it. So why am I moving to a house? Two reasons you're at a disadvantage w/ an apartment...no yard to yourself (missing those backyard BBQs) and the potential for having loud obnoxious neighbors.

Just a few things to think about, hope it helps.

blushingbride_08 · August 2013

I personally like apartment living however there are some cons. We are currently moving because we want a backyard. In our complex we do have a playground, pool, etc. but it is nice to have your own property. If you are comfortable living in an apartment maybe you can buy a multifamily house or convert your existing house to a multifamily and rent out one unit to pay for part of your mortgage?

CarrieB. · August 2013

If you factor in the tax benefits of owning your home and gaining equity, are you really still saving $800 a month?

My DH grew up in a rental apartment, so it took him awhile to come around to appreciate owning a home, but now he would never go back. But he is also self employed, so any tax benefit we can get helps. Also our monthly payment now (mortgage, taxes, ins) is pretty much the same as what our last apt cost us in monthly rent 5 years ago. As a reminder, rental costs almost always go up year to year.

Reilly626 · August 2013

Financial stress is the worst. I'd go for the apartment! I am a homeowner personally but it's not for everyone and who wants to be strapped! Good luck!

Reilly626 · August 2013

But check that website to make sure there aren't any offenders living in the complex- I wouldn't want my kids near that.

Netty_3 · August 2013

We are moving from a 2 br to a 4 br house because we feel like bad neighbors. LO can be loud and will throw things. Also having a yard is something we're looking forward to. That being said I would have stayed for the extra money one more year to get rid of all of our debt faster.

nattyncbride · August 2013

I too like the idea of a smaller house. I just bought a small house after living in apartment for about 1.5 years (lived in a nice house before that, but got divorced: I'm now a working single mom). I can't tell you how much I love living in a house again!

My son was 1.5-3 years old in the apartment, and it was a nice apartment complex. Nonetheless, it's an apartment. People were loud, people smoked near my apartment, people parked poorly, I hated putting my son in the car when it was really hot or really cold (and having to scrape snow and ice), I hated having to drive the garbage, having no garage, not having a yard for my son and dog, hearing the neighbors (one wall is enough), the list goes on. Neighbors were nice, but younger kids, older people (whose TVs were on loud) and very few families.

I lived on the second floor, which was a pain when LO was 1.5 (and wanted to be carried alot) and having a dog, but much safer than an open first floor, which I think is more ripe for burglaries.

So...I'm biased, but did NOT enjoy going from home living to apartment living. I think you'd have a harder time than you think. If your house is ready to sell, and you are ready to move- buy a smaller house! You'll love the smaller mortgage, less house to clean, but will still have land and it's YOURS.

One last thing: the apartment was not 'luxury', but not bare bones. Still- my new house is less than a mile away (so same standard of living), and my mortgage is $200 less than rent!

ASmallWonder · August 2013

Personally, I would stay in the house. Hopefully with time your pay will go up, kids will be out of diapers, etc. so money will change. Does your LO go to a center or a home daycare? Homes are usually much less expensive and can be every bit as wonderful as a center. That's something you could look into.

Netty_3 · August 2013

We live in a great complex...but in the winter the stairs are snowy and with foot traffic gets icy...the parking lot too esp in front of the garages...makes carrying a little one scary in the winter. Also grocery shopping is a pain.

MidwestGidget · August 2013

If the difference is that great, I'd get the apartment. A couple things to evaluate:

You bought close to the bottom of the market. Are you planning on coming back to that area in a few years? If so, the house could cost more then.

In terms of stuff, truly evaluate what you have. You can get a temp storage locker if you don't want to part with your things, but try living in just 2 bedrooms of your house and see how it goes. If your family room is bigger than the apartment, arrange your furniture to the space of the apartment floor plan. Do you miss the extra space and stuff?

If you do move to the apartment, think of it as a way to keep layoff fears at bay, not for you to immediately quit. If one of you loses their job, the good news is you could absorb that.

As to the fears about damaging the apartment, etc., that all evens out. If your house now develops a leak, or the fridge stops working, you're on the hook for that too.

Also, in recent years, I think the standard deduction has gone up, so what you're making out of the mortgage interest isn't as big as it used to be. (At least, having a mortgage for 9 months last year + charitable donations wasn't enough to beat the standard deduction for us).

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NWMR: Apartment vs. House

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