I’ve looked into housing prices for multi family complexes and they scale sublinearly with number of bedrooms. The biggest obstacle is that people aren’t really willing to invest significant fractions of their income in them currently (because you don’t want to have to gather 8 investors for an 8 unit, chaos/life happens). Ideally something like 3 people/couples who think they are relatively stable would take on responsibility for an 8 unit with a significant fraction of their income. This is a risk, but one of the top regrets of old people is becoming socially isolated. I think investing a significant fraction of ones income in what will eventually turn partially into semi-passive income (once the mortgage is paid) and partially into their community it is okay to invest a larger than usual fraction of income in. This will still likely take an individual slightly more wealthy than your average techie to eat a larger chunk of the down payment than others and thus own more of the equity in the income stream.
I suspect this is fairly impossible in the bay area which has the lowest conscientiousness people in the US AFAIK.
Edit what I mean by pointing out low conscientiousness is that many people are incredibly short sighted and will defect when short term opportunities look better ie they will not tough out a few years of sub-optimal financial arrangement ie people don’t actually grasp the concept of investing in a community. Related to why our kind can’t cooperate.
Yeah, when I looked into cohousing this is what I concluded too. My husband and I ended up buying a house with 6 bedrooms and occupying two of them (then adding two more family members and building two more bedrooms.) None of our housemates would have bought in because they’re not sure how long-term they want to be here, but they’re happy to be renters and we’re happy to own the building.
To us it’s important that the arrangement be flexible; rather than a single big house we bought a house that had been divided into two apartments, so if we ever want to stop having housemates or we can’t find housemates who want to live with us, we can pick the smaller or the larger apartment and rent the other one out. There’s also some possibility of our kids wanting to rent from us in 20 years, which we think will work better if they can have their own apartment. I wouldn’t have wanted to sink our savings into something that would really only work in one configuration.
I’ve looked into housing prices for multi family complexes and they scale sublinearly with number of bedrooms. The biggest obstacle is that people aren’t really willing to invest significant fractions of their income in them currently (because you don’t want to have to gather 8 investors for an 8 unit, chaos/life happens). Ideally something like 3 people/couples who think they are relatively stable would take on responsibility for an 8 unit with a significant fraction of their income. This is a risk, but one of the top regrets of old people is becoming socially isolated. I think investing a significant fraction of ones income in what will eventually turn partially into semi-passive income (once the mortgage is paid) and partially into their community it is okay to invest a larger than usual fraction of income in. This will still likely take an individual slightly more wealthy than your average techie to eat a larger chunk of the down payment than others and thus own more of the equity in the income stream.
I suspect this is fairly impossible in the bay area which has the lowest conscientiousness people in the US AFAIK.
Edit what I mean by pointing out low conscientiousness is that many people are incredibly short sighted and will defect when short term opportunities look better ie they will not tough out a few years of sub-optimal financial arrangement ie people don’t actually grasp the concept of investing in a community. Related to why our kind can’t cooperate.
Yeah, when I looked into cohousing this is what I concluded too. My husband and I ended up buying a house with 6 bedrooms and occupying two of them (then adding two more family members and building two more bedrooms.) None of our housemates would have bought in because they’re not sure how long-term they want to be here, but they’re happy to be renters and we’re happy to own the building.
To us it’s important that the arrangement be flexible; rather than a single big house we bought a house that had been divided into two apartments, so if we ever want to stop having housemates or we can’t find housemates who want to live with us, we can pick the smaller or the larger apartment and rent the other one out. There’s also some possibility of our kids wanting to rent from us in 20 years, which we think will work better if they can have their own apartment. I wouldn’t have wanted to sink our savings into something that would really only work in one configuration.
Thanks a lot for sharing. I think there’s something valuable to be learned from how you’ve managed to maintain option value.
All the higher conscientiousness people realize how bad of an idea it is financially to try to live in the bay and move elsewhere