What Can I Afford? Millenial Edition

[Anonymous]

Anonymous wrote:OP, we make more than you and bought for 725K with 20% down. We rent out a basement unit so payment is about 2K. You are probably fine IF you do not have children. However, if you have kids, you will likely feel stretched bc childcare is so expensive, and if you have kids, you may not want to be locked into needing a high paying job. So given your age, unless you are deadset 100% sure you will never have children, I would either 1) buy something cheaper to give you flexibility if you do have kids or 2) buy something you would be comfortable having a long-term renter in to defray costs (like with a separate basement unit, not just a roommate situation.

Well I assume OP will have a husband contributing to the Income OR astay at home dad. Not a deadbeat dad. Op don’t get knocked up

[Anonymous]

City bites and pours?

[Anonymous]

Anonymous wrote:OP, we make more than you and bought for 725K with 20% down. We rent out a basement unit so payment is about 2K. You are probably fine IF you do not have children. However, if you have kids, you will likely feel stretched bc childcare is so expensive, and if you have kids, you may not want to be locked into needing a high paying job. So given your age, unless you are deadset 100% sure you will never have children, I would either 1) buy something cheaper to give you flexibility if you do have kids or 2) buy something you would be comfortable having a long-term renter in to defray costs (like with a separate basement unit, not just a roommate situation.

If she were to have kids, presumably there also would be another person with income involved.

[Anonymous]

Op here, appreciate everyone's insights. Agree with most posters, kids would only happen if I was married (fingers-crossed), don't think I could hack the being a mom without the support of a spouse.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP, we make more than you and bought for 725K with 20% down. We rent out a basement unit so payment is about 2K. You are probably fine IF you do not have children. However, if you have kids, you will likely feel stretched bc childcare is so expensive, and if you have kids, you may not want to be locked into needing a high paying job. So given your age, unless you are deadset 100% sure you will never have children, I would either 1) buy something cheaper to give you flexibility if you do have kids or 2) buy something you would be comfortable having a long-term renter in to defray costs (like with a separate basement unit, not just a roommate situation.

If she were to have kids, presumably there also would be another person with income involved.

True, but spouse's income may or may not cover childcare (which I know from bitter experience). The marriage penalty on taxes is gone at OP's income if she does marry someone low earning, so that helps, but spouse could also come with student loans or other fixed expenses that largely cancel out their extra income. Agree if OP marries and has kids with someone high-earning, this is a non-issue, but that is not always how it works. I know that pre-kids, I had very little understanding of how expensive they were, and I'm very glad we bought something in the high 300's pre-kids rather than something in 600's, which we considered and did qualify for.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, we make more than you and bought for 725K with 20% down. We rent out a basement unit so payment is about 2K. You are probably fine IF you do not have children. However, if you have kids, you will likely feel stretched bc childcare is so expensive, and if you have kids, you may not want to be locked into needing a high paying job. So given your age, unless you are deadset 100% sure you will never have children, I would either 1) buy something cheaper to give you flexibility if you do have kids or 2) buy something you would be comfortable having a long-term renter in to defray costs (like with a separate basement unit, not just a roommate situation.

If she were to have kids, presumably there also would be another person with income involved.

True, but spouse's income may or may not cover childcare (which I know from bitter experience). The marriage penalty on taxes is gone at OP's income if she does marry someone low earning, so that helps, but spouse could also come with student loans or other fixed expenses that largely cancel out their extra income. Agree if OP marries and has kids with someone high-earning, this is a non-issue, but that is not always how it works. I know that pre-kids, I had very little understanding of how expensive they were, and I'm very glad we bought something in the high 300's pre-kids rather than something in 600's, which we considered and did qualify for.

Please stop. I’m sure OP will marry someone who makes at least enough to cover daycare of a nanny share.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, we make more than you and bought for 725K with 20% down. We rent out a basement unit so payment is about 2K. You are probably fine IF you do not have children. However, if you have kids, you will likely feel stretched bc childcare is so expensive, and if you have kids, you may not want to be locked into needing a high paying job. So given your age, unless you are deadset 100% sure you will never have children, I would either 1) buy something cheaper to give you flexibility if you do have kids or 2) buy something you would be comfortable having a long-term renter in to defray costs (like with a separate basement unit, not just a roommate situation.

If she were to have kids, presumably there also would be another person with income involved.

True, but spouse's income may or may not cover childcare (which I know from bitter experience). The marriage penalty on taxes is gone at OP's income if she does marry someone low earning, so that helps, but spouse could also come with student loans or other fixed expenses that largely cancel out their extra income. Agree if OP marries and has kids with someone high-earning, this is a non-issue, but that is not always how it works. I know that pre-kids, I had very little understanding of how expensive they were, and I'm very glad we bought something in the high 300's pre-kids rather than something in 600's, which we considered and did qualify for.

This is a studio in DC and would be a bad financial decision for OP since she’d have to sell right away if she had kids

[Anonymous]

OP, just another vote YES. We have a joint HHI of 180k, takehome of $8k a month post 401K, taxes and other pretax deductions. Our PITI is $3400 AND we have a daycare bill... We still save every month! It's all about managing your other expenses and seems like you have a good track record of doing that.

[Anonymous]

You're way behind the game. Almost every 30+ millennial I know, single or not, has already purchased a first home. Usually a condo (sooo many of them now trying to rent out one-bedroom condos "just steps from [insert amenity]" that they've outgrown) but often row houses (in the city) and SFHs (in the burbs). The general rule of thumb for DC is 5-10% down and a mortgage 4-5 times annual salary. You'll be fine once you decide to commit.

[Anonymous]

Anonymous wrote:You're way behind the game. Almost every 30+ millennial I know, single or not, has already purchased a first home. Usually a condo (sooo many of them now trying to rent out one-bedroom condos "just steps from [insert amenity]" that they've outgrown) but often row houses (in the city) and SFHs (in the burbs). The general rule of thumb for DC is 5-10% down and a mortgage 4-5 times annual salary. You'll be fine once you decide to commit.

That's ridiculous - I work with around 30 millenials and only a very few actually own homes, the ones who are married and maybe with kids. Very few are also making $180K and could ever afford a $500K+ house in this area... The rest are normal 25-30-somethings living with their significant other or a roommate and their dog in a rental.

Are you only hanging out with trust fund kids?

[Anonymous]

Anonymous wrote:You're way behind the game. Almost every 30+ millennial I know, single or not, has already purchased a first home. Usually a condo (sooo many of them now trying to rent out one-bedroom condos "just steps from [insert amenity]" that they've outgrown) but often row houses (in the city) and SFHs (in the burbs). The general rule of thumb for DC is 5-10% down and a mortgage 4-5 times annual salary. You'll be fine once you decide to commit.

You seem like a realtor.

I'm 35, which I suppose qualifies me an an "old Millennial." My anecdotal evidence: most friends I've made within my age cohort in the time I've lived here have moved away (at least 7/10 friends) because they were only here to build their resumes or found their dream job elsewhere. Almost all those who have moved away have left for lower COL areas (some closer to their hometowns) or to comparably expensive cities where they feel like the cost of living is justified by what they feel DC lacks in terms of culture/"edge" (SF/Oakland, NYC, LA). The only people we know who own homes here are (a) those with partner-level salaries (or are married to a spouse with a partner-level salary) and/or (b) bought circa 2009 - 2014.