The new house…

by Nick on August 19, 2013

That was quick…

Just a few days ago I told “all y’all” that I sold the house that had become way too annoying to keep and made a few pennies… We actually “closed” in June, but I didn’t count my chickens until every last penny came in from insurance and paying off the mortgages, etc.  That all happened and everything was “done” in late July after the last mortgage company sent us our change…

(Yes, apparently when you pay off a mortgage upon selling you send a few extra bucks in to make sure they have enough and then – whenever they “feel like it” – send you back “your change.”)

But apparently there’s still a little Donald inside me who just couldn’t stay away from real estate very long…. So I got a new partner.  A really hot one.  I already live with her.  And we made a couple babies together.  Now we’re starting a real estate empire…. Get ready for the ride!

For the first nine years of our relationship I rented.  She owned where she lived for a while, but then moved in with me and rented her place.  We still rented as a matter of “decision” and “strategy.”

I rented in NYC since 2004.  Then in 2007 I was ready to buy.  Work was going well.  So I wanted to get in the NYC real estate market and eventually buy the Empire State Building.  Yes, that’s how my twisted brain works.  And it apparently is actually “on the market” to some extent…. some company appropriately named “Thor” Equities apparently wants to buy it.  Yes.  I follow it.  :)

Then I saw the prices of a one bedroom apartment… and had second thoughts.  To have a relatively reasonable commute (READ: under an hour each way) the cost was about $1,000 per sq. ft.  That’s not a typo.  I didn’t hit the zero one too many times because of my nervous twitch.  A GRAND per square foot.  That’s right.  Each tile on the floor costs you a grand.  Even the useless ones.

And that doesn’t include “monthly maintenance” fees, which include real estate taxes, common insurance, building maintenance and any shared expenses.  Those were $900-$1500 per month on top of the mortgage.  Again, not a typo.

Some places were cheaper if the hour commute would be almost entirely walking to work – so really “west” or “east” rather than up or down the middle of Manhattan.  So I was looking at $500,000 to $750,000 for a one-bedroom apartment.  Plus $900-$1,500 for monthly maintenance.

Oh, and don’t forget about NYC INCOME TAX!!!  That’s a few percent on top of state and federal income taxes.  Still pay it if you rent, but we started thinking maybe committing to “the City” wasn’t the right decision for us.  It’s AWESOME for sure.  But buying a place there wasn’t for us.

By that time my now-wife and I were getting serious.  We were “about” to get engaged and wanted babies.  So we wanted more than a $600,000 one-bedroom apartment that would make us house storage closet with an “efficiency kitchen” and toilet/sink combo” poor….

So we moved out of the City to a city in NJ where we rented a 2bed/2bath apartment for $2,600 per month.  Still nasty expensive.  But it was perfect for us, we could afford it, and it was essentially half the cost of what buying an apartment in the City would be, particularly after taking City income tax and maintenance into the equation.  And my commute was 45 minutes.  Door to door.  Awesome.

I put the down payment into the stock market and set up auto-invest to watch it grow.  As everyone knows.  It got ugly for a while.  But I kept adding to it – all the way down.  And then again – all the way up.  Worked out well in the end.

Now we’re moving to the burbs!  We’re under contract on a house.  It’s pretty.  And has grass and trees!

We’re set to close next week!

More later.  Woot!

Next stop – a deeelux apartment (building) in the sky!

Need to get the side hustles going!

No time for spell check!

Until next time, put your credit card down and slowly step away from the mall!

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{ 4 comments… read them below or add one }

Brian August 22, 2013 at 10:29 pm

I can not believe how much it costs to live in NYC. How do people afford that? Sometimes I am very happy to be living in the middle of no where.

A 45 minute commute is not bad. That is right around the amount I would like. I currently drive 20 minutes, and it is not enough for me to forget about work before I pick my son up from daycare. Plus I have recently been tuning into podcasts, and 20 minutes is usually just a tease.

Congrats on the new house also.
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Nick August 24, 2013 at 12:16 pm

I think it’s a combination of slightly higher salaries around here (yes, only slightly), much, much less space for some people and a different view of what percentage of income could/should go to houses. As someone from another state, it still shocks me when I look at what people pay for what they get. Their response is usually “that’s the price,” which isn’t good enough for me.

I totally agree about the commute time. I used to have a 5 minute commute and when it went to 45 I was able to decompress. And I started listening to podcasts that are about 40 minutes long. It was really, really nice.

Thanks!
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My Wealth Desire September 5, 2013 at 9:03 am

It’s not bad for the rate of the rent and the time you travel. For almost 4 years I traveled more than 3 hours daily from home to work site.

It seems to me living in the NYC is only for millionaire and who have a huge income.
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Nick September 30, 2013 at 9:34 pm

Wow! That’s a long commute! NYC for the long term is pretty expensive. There are a TON of great things about the City but it sure comes at a high cost. It is certainly pretty cost prohibitive, a luxury so to speak, so having or making a lot of money is probably a good idea, IMHO.
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