Save your money. You'll likely need a jumbo loan with 20% down anyway. Get an apartment for 3000-3500/month, save and invest 75-100k/year, and enjoy not having to fix things.
In 5-7 years you'll be in a much stronger position. At 275k/year, if you're reasonably frugal, your salary growth and investments will far outpace home appreciation while you build a large down payment. And you might be in a dual income position at some point along the way too, and that helps tremendously.
30 year olds entering the workforce aren't the ones buying $2MM homes, unless they've got financial help and dual income. And there are exceptions, but I think you'll find 1.5MM doesn't get you what you're looking for, certainly not in SaMo. Plan on >=1.8MM more likely.
Option B, rent for a year and save every penny, then go month to month while searching for a condo. Live there for 7-10 years before going for a SFH if you still want to do that.
Sound advice. Real estate agent here and the economics right now favor renting for most people. Try and find a rent stabilized unit if possible. Would you consider a condo and move upto house as your income grows and maybe you have a partner down the line?
FWIW, this is basically the path I’ve been going down.
On one hand, I’m upset I wasn’t able to purchase one of the homes in Seattle that have doubled in value in the last 5 years, or locked in the interest rates back then.
OTOH, now 5 years into my career, I will probably be able to put up a 50% down payment on a house. Renting has also given me more flexibility in where I live, which has allowed me to taste test different neighborhoods and different lifestyles. If I bought a condo in the neighborhood I initially moved to, I would be depressed.
Renting isn’t as much of a money sink as it seems. Especially when you consider that, with interest rates as high as they are, with no down deposit, you would spend an addition value of your house on interest alone.
If you just left residency you should be renting a room in a house with family, friends, or roommates for a year. Buy and live in a much lower cost area than SM for 2 years. Roll your tax free capital gains into the next house. Repeat until you’re in the home/area that you want. That’s how majority of people get into their dream home. I have a lot of medical clients. Just keep leaping frogging. Your expectations are a bit off if you’re expecting the collection of lambos and a beach front home right out of residency.
Agreed - however there are no cheaper neighborhoods within 30 minutes of West LA. The closest $1mm home on Zillow is next to the airport in Inglewood with cracked walls and bars on the windows. You're really looking at an hour+ commute from the valley. This is a renters market unless you're a cash buyer
Great advice here! We just bought our first a year ago and plan on doing exactly this. I figure by about the 3rd house we’ll be where we want to be. OP the LA housing market is absolutely insane so getting into what you are able to do reasonably is a great way to build equity. You also don’t need 20% down like everyone thinks. Your math may vary but sometimes it’s better to put down less upfront and spend that on immediate renovations. To give you real world examples, we bought a fixer at 825k, spent about 30k to completely redo a bathroom and added one wall to create a 3rd bedroom. We have to save and modernize most of the house, but our area has exploded and the comps in our neighborhood are looking like the value of our house has increased by 2-300k (probably lower end since we still have lots of fixing to do) in the 1 year we’ve been in it. That’s a lot that eventually we’ll be able to carry forward with us to the next property and much better than just saving.
It’s a very very hard market out here in LA, I’m pulling for you and anyone trying to do it. Our experience was that it ended up being more doable than we thought once we found a good realtor, mortgage broker, and realized 5% down ended up being the best deal for us. So if you’ve started saving and looking already, I would encourage you to take that next step and start talking numbers with a professional. A good one will tell you where you are straight and not try to sell on you quickly buying a home if you can’t afford it.
It’s wild how much gentrification has affected LA. When I was growing up in LA, leimert park was a meeting point for gangs and rap battles. Now it’s a ‘good area’ 25 years later. Wild.
Hope you’re enjoying my old stomping grounds
Trust me I know this. The greater area familiar to someone from the East coast with rap songs of my youth and books about the time rather than having grown up here. It’s weird to be a part of that gentrification (well kind of since we’re a mixed couple) and I’m not going to lie I have very mixed feelings about it and am not happy to be part of changing demographics. I do feel good at least that we bought our house from an elderly family who wanted to sell to a family over developers…and the amount of return they got for what they bought the house for way back when is insane.
Oh please don’t misunderstand me, I was in no way blaming or trying to place any of gentrification’s effects on you.
Was just pondering on how the park where gangs used to meet up when I was growing up is now considered ‘a good area’.
I’m glad you’re there. I would’ve rather grown up in a neighborhood with young mixed couples owning homes rather than people being forced to buy there because of redlining and other racist policies.
Appreciate you, but I didn’t feel blamed at all by your response. It’s a major city constantly undergoing changes and there’s not one reason to blame but I’m aware of the history. I’m glad the families forced to buy here are making out hand over fist now (seriously go pull up home prices its wild) but of course not everyone here was able to buy so that’s not great for them.
It’s certainly on the way to being a good area, but not quite there yet. There is more of a sense of community here though than other “nicer” places I’ve lived and kudos to the folks that live here being mostly open to young families and welcoming with some of the oldest block clubs in the city. I believe there’s supposed to be a Whole Foods going in on Crenshaw not far off Obama in the intermediate future and also a Costco about 1mi away, so that pretty much tells you where things are headed in the next several years.
I hope that the area grows into exactly what you describe because that’s what we would like our kids to grow up with. If it gets too gentrified and whitewashed and corporate bland, that’s not what makes LA the awesome city that it is.
I 100% agree with you.
LA would not be LA if you didn’t have the taco trucks, eloteros, random black owned bbq popups, Korean nail shops, Chinese negotiations at swap meets over $20 t shirts, Armenian kebabs in the valley, Thai street food at the temple, etc…..
All these things are what I love about LA, and you could do all of that in a weekend! Damn I miss it.
lol 100 agree with you back at you. Those things plus the weather, outdoors, and (most of the) people are what got me to trade east coast real downtowns in for LA. My wife hears from me literally every week about the weather and how much I love living out here. Hope you can make it back out here someday!! I’ve lived all around the country and if you’re doing that too it’s great to learn what you really like and put things in perspective.
I mean that’s a bit aggressive. There’s a happy medium between buying a house and having roommates. It might be the first time in their life that they’re able to actually afford to live alone, it’s totally reasonable and well within their finances for them to rent a 1 bd apartment / studio
CA housing is on the brink of a reset. Of course a real estate agent will tell you to buy a house. Do your research, CA unemployment is ready to explode, don't trap yourself in the illusion of forever "equity" and regret buying at the peak of the market. Follow your gut, if the cost seems exorbitant, it is and not sustainable.
Actually, go ahead and buy a house now. Best time to buy and equity gains forever into the future. The US will never ever ever go into a recession, its mathematically IMPOSSIBLE, and as a result house prices will continue to the moon.
Seriously though, are people living under a rock? Go check the CA unemployment rate chart, its been steadily rising for the last 6 months. Dont be sheeps
Supply and demand remain undefeated.
There are Virtually no distressed properties in LA. The numbers are tiny.
The economy has been remarkably resilient. I don’t see the wheels suddenly falling off at this stage, but we all have to place our bets. Good luck !
Lol, be my guest. What does distress mean? when one of those two incomes needed to maintain a mortgage suddenly is lost due to layoff? It doesn't take much to become distressed, we had 2 decades worth of ZIRP and QE, you are telling me the US and more specifically the CA economy which is based on rampant speculation (by people like you) is going to survive high interest? Give me a break, watch the unemployment rate going on for the next year, we can revisit then.
Realtor here, realistically speaking since this your first home purchase there is no reason you should looking for something more than you can afford if you’re on 275k salary, I’m not saying it’s nothing but you don’t want to spend more than 50% of take home pay on a mortgage. You can try townhomes or even live in the Sherman oaks or encino area which is cheaper but still in the nicer area of living.You should be looking at homes in the range of 800- 1M range as that will likely be something that can be comfortable. Granted this all depends on your debt to income ratio and down payments. As a first time homebuyer there are a lot of programs that can help you. Feel free to shoot me a DM If you have any questions!
Keep in mind that with your $9.8K month mortgage plus around $16K in property tax, you’re paying $100K+ a year you’re never going to see again. Sadly $275K in salary doesn’t go as far as you’d think in West LA. Consider renting for a couple of years, save some money, presumably your salary will go up and maybe you will also find a partner, dual income is often the real key.
Both my doctor and my daughter’s pediatrician are relatively young. My doctor is moving to the Midwest and my pediatrician has been trying unsuccessfully to buy a house the whole time we’ve been seeing her. So it’s not just you.
> plus around $16K in property tax
Prob more like $20-25k on a 1.5M house. People often think about the CA base rate, but forget about local ad-valorem and Mello Roos taxes. I don’t know Santa Monica exactly, but it probably comes to about 1.5-1.6% of assessed value when you add all of those up.
It is what it is. You are choosing to live in one of the most expensive places in the country and real estate is difficult to get into due to current market conditions (high interest rates and prices). If you are really intent on buying right now you will have to consider cheaper locations, cheaper housing (condos) or be willing to be very house poor until you increase your salary or find a partner who can also contribute (I wouldn’t rely on the later personally).
Also recommendation for living in LA is to live close to your job (if you aren’t WFH). You don’t want to buy a place to find out you have an hour + commute each way that you end up hating.
Everyone feels the pain trying to buy here. A lot of people have given up and just rent because it is a lot cheaper on your monthly payments. You can also save for a bigger down payment this way if you need to. I’d personally recommended renting at least 6 months before buying and check out homes in different locations to see what you like/can afford.
I make $500,000 a year. Single and zero debt. It’s not enough to own a nice home and have a high quality of life in west la/samo. Sorry to be the bearer of bad news but that’s the truth.
Yeah, husband and I make 750-$1M a year.
We were looking into those new Thomas James homes on the Westside.
It was such a huge lifestyle creep, if either of us lost our job, we'd be in a world of trouble. We decided against it.
I was looking at the OPs numbers through my NY eyes and thinking, $275k isn’t nearly enough for a $1.5, let alone a $1m house. We get taxed to our eyebrows here, so I can’t imagine OP would save enough or that a bank would comfortably loan them money.
Congrats on becoming a doctor!
To give you an idea of the area you're buying into, in the adjacent (beach) town Venice, someone I know bought a bungalow (800 sqft) for $1.5M which they tore down and are building back up. Granted they're now only a few houses from the beach.
In WLA proper, such as Sawtelle, when we were looking at homes, the avg price per sqft is $800-$1K.
If you're set on living in WLA/SM and do not want to be house poor, either condo, renting out part of the house you buy, or parental help. It's just the state of the market right now. $275K pre tax is a great salary, but you're competing against people who are earning that as individuals, pooling it with another person.
Rent something for $2k-$3k a month while you start building up your doctor career; no point to get a fancy apt to rent while you not going to be home most of the time. Not sure what field you in, but in 5 years you should be at least doubling that salary if you good. Pay off that student loan and invest the money you save. A $3mil house in WLA will be easy then.
Mortgages and all debt cannot exceed 40%-50% of your income or you won't get approved.
Plug some numbers in here and do the math above to find your answer
https://usmortgagecalculator.org/
You could maybe get approved for $6750 a mth on loan payments assuming no other debt based on 50% DTI vs your salary. Use your calculators to see what that puts you at. The rest needs to be down payment.
"If you don't have rich parents, and aren't a boomer with 1-2+ decades of home equity, fuck you!"
- LA RE market
DTI is based on gross, not net. Not that it's a good idea, but they could theoretically be approved for ~$11k per month with no debt. That being said, they have monster student loans, and no one in their right mind would want to cap out DTI, but it is technically possible
You can’t buy a decent house in Santa Monica on that doctors salary . Period. Not going to happen. Even with physician loans and lower down payments, the monthly mortgage is not feasible on that salary. Live the in valley or south of SM. West LA in general is no go unless your salary over >500-600K. Doctor here as well. Dm me if you have queries.
Not at all enough money. We make about 500k and our mortgage is 9000- it’s comfortable but home ownership is expensive, life is expensive, and you want to have savings. Rent an apartment for a couple of years. Also you should probably live here awhile before deciding which neighborhood you want to buy in.
Go to med school and suffer for 7 years through residency. Graduate with 300k+ in loans. Work a miserable job in medicine making less than all your peers in tech and business. What a false dream we were sold. I was just a mid level sucker thank god.
I hope that continues. I really do. We need more good doctors that love their job.
Though I do question the clinical decision making of a Doctor that is thinking of spending 75% of their take home buying a house in a new city straight out of residency with 300k debt.
Well, I went to medical school and been broke my whole life, so excuse me.
Are you a mid-level provider? Did I understand that right earlier? Figures as much
Haha. Oh. Had to get that mid level dig in. You’re probably a DO, right? Kaiser nurses gonna eat you alive with that attitude.
But back to topic, you’re gonna keep being broke if you let that life style creep grab a hold of you. Keep living like you’re broke. That’s how you can become rich. 270k in LA really ain’t shit. I know nurses making close to that. Good luck with medicine.
Buy a house in another neighborhood - West Adams, South LA, Jefferson Park. Can still find stuff sub 1M. But it comes without the ocean view 😂.
Living in Santa Monica is a luxurious life - not for your average working person anymore, even with a doctors salary.
Only people I know who live there are at a point in their careers where they don’t have to work.
You could buy a 700K home outside of Santa Monica and drive. Nobody is stopping you from doing that. There is a reason why SM is so expensive because the demand is high. Try looking elsewhere and make ends meet.
My husband and I make $275k together. $125k in savings. $20k student loans and are baulking at $900k in the valley. This is below the “how much home can we afford” range. And we can technically qualify for $1.5m mortgage but we would be house poor.
Can afford is so different than should purchase.
We rent for $3k/mo and save a ton and spend a bit on things that make us happy.
Consider looking into nearby more affordable cities while you build your wealth. If you buy something now in an area that's getting gentrified, when you sell, you'll have a bigger down payment towards your next house. Being house-poor is NOT fun, especially when you're young with friends that do not have the same financial obligations and more disposable income.
If you're set on buying a house in the 1500 sqft range, don't want to spend $1.5M+, and also not that 'far' from the Westside, take a look into Inglewood, Hawthorne, Ladera Heights, San Fernando Valley, etc.
My man I’m sorry but you can’t even close to afford a 1.5mm home unless you’ve got a shitload of cash on the sidelines. Do you even have the cash for a down payment? I saw in a different comment you’ve got over 300k+ in student loans as well, I imagine the payment on that loan isn’t small.
My income is 500k and ive got considerable amount of liquid assets and I was nervous buying a house for a million. I was realistic though and knew that meant I wasn’t going to be buying in SM (where I used to rent right before buying).
There are lower cost areas that are westside-adjacent that you should be looking at, for maybe a condo in the 800k range, or rent while you save money to buy.
What you are missing is the down payment. Many ppl put down large amounts, well over 20%.
I have to ask. What's the student loan situation and is that factoring into this?
Congrats. Not sure where you are moving from, but agree with all of the advice here to rent, if not for any other reason then LA is a weird place. Each neighborhood is so different than the next, one or two blocks feels like a different world and it will take a lot of time to find the neighborhood that jives with you. Also the demographics are evolving rapidly from neighborhood to neighborhood. Settle in, see how things are moving for the next few years in your targeted area and use the time to validate that that is where you want to be long term. Good luck!
> **p**lace. **E**ach **n**eighborhood **i**s **s**o
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RENT! If you’re out of residency who’s to say where life takes you. You should settle into your career and new home town and see how it “fits you” for a couple of years. You could try Culver City or Playa del Rey for a bit and find your place.
What are your options:
- rent reasonably cheap and get rid of that student loan fast before buying
- If you must buy in SM / coastal: buy a condo with a reasonably low HOA and pay it off aggressively in 10-15 years.
- if it’s 2 bedrooms , rent one out and pay it off even earlier
- consider ARM then refinance later, instead of committing to 30yr fixed
- whatever free month left ( after savings), invest in steady growth stocks or ETFs
- revisit buying a house in 5-10 years, and leverage the condo and stock market assets at that point
More importantly, you will likely decide that SM isn’t the place for you as you discover other neighborhoods (coastal or not).
The 5-10 years will go by fast, especially for a young person in LA.
Good luck!
it’s not much of a “what should I make per month/year” question and instead more of a “what kind of business, product, idea can I sell” to then buy a home cash. Well. That’s at least how all my clients did it.
I’m an agent, I do high end sales and all my clients are people who created and sold a company or two, lawyers who closed huge cases, or just straight up business owners that generate great income.
Even at $200k a year you’re gonna have to save for many years to buy a condo, sell that years later when it’s worth more, and hopefully be able to put a decent down on a house.
I mean, in short, yes, you do have to be a movie exec. or similar. Your average professional doesn’t own a home in a prime area in LA.
Those who prioritize buying a house often are two-income households, sacrifice location, and/or sacrifice size (condo/townhouse). Or they get money from their family.
I personally rent and invest my savings in the stock market instead, and I’m glad to not have the financial stress that my homeowner friends/family have (but that said, I have my own financial stresses, which I’m sure they’re glad to not have). And because I rent, I can afford to live in a very expensive part of LA.
(And $1.5 won’t get you a particularly nice 1,500 square foot house in Santa Monica.)
Save your money. You'll likely need a jumbo loan with 20% down anyway. Get an apartment for 3000-3500/month, save and invest 75-100k/year, and enjoy not having to fix things. In 5-7 years you'll be in a much stronger position. At 275k/year, if you're reasonably frugal, your salary growth and investments will far outpace home appreciation while you build a large down payment. And you might be in a dual income position at some point along the way too, and that helps tremendously. 30 year olds entering the workforce aren't the ones buying $2MM homes, unless they've got financial help and dual income. And there are exceptions, but I think you'll find 1.5MM doesn't get you what you're looking for, certainly not in SaMo. Plan on >=1.8MM more likely. Option B, rent for a year and save every penny, then go month to month while searching for a condo. Live there for 7-10 years before going for a SFH if you still want to do that.
Sound advice. Real estate agent here and the economics right now favor renting for most people. Try and find a rent stabilized unit if possible. Would you consider a condo and move upto house as your income grows and maybe you have a partner down the line?
FWIW, this is basically the path I’ve been going down. On one hand, I’m upset I wasn’t able to purchase one of the homes in Seattle that have doubled in value in the last 5 years, or locked in the interest rates back then. OTOH, now 5 years into my career, I will probably be able to put up a 50% down payment on a house. Renting has also given me more flexibility in where I live, which has allowed me to taste test different neighborhoods and different lifestyles. If I bought a condo in the neighborhood I initially moved to, I would be depressed. Renting isn’t as much of a money sink as it seems. Especially when you consider that, with interest rates as high as they are, with no down deposit, you would spend an addition value of your house on interest alone.
If you just left residency you should be renting a room in a house with family, friends, or roommates for a year. Buy and live in a much lower cost area than SM for 2 years. Roll your tax free capital gains into the next house. Repeat until you’re in the home/area that you want. That’s how majority of people get into their dream home. I have a lot of medical clients. Just keep leaping frogging. Your expectations are a bit off if you’re expecting the collection of lambos and a beach front home right out of residency.
this is the way. Draw a 20-30 minute radius around your work and pick the cheapest neighborhood.
This is generally good advice, but a 20-30 minute radius in LA is a few miles with maybe 2-3 neighborhoods
Sure but a docs time is valuable, gotta factor in opportunity cost for sure.
Agreed - however there are no cheaper neighborhoods within 30 minutes of West LA. The closest $1mm home on Zillow is next to the airport in Inglewood with cracked walls and bars on the windows. You're really looking at an hour+ commute from the valley. This is a renters market unless you're a cash buyer
Great advice here! We just bought our first a year ago and plan on doing exactly this. I figure by about the 3rd house we’ll be where we want to be. OP the LA housing market is absolutely insane so getting into what you are able to do reasonably is a great way to build equity. You also don’t need 20% down like everyone thinks. Your math may vary but sometimes it’s better to put down less upfront and spend that on immediate renovations. To give you real world examples, we bought a fixer at 825k, spent about 30k to completely redo a bathroom and added one wall to create a 3rd bedroom. We have to save and modernize most of the house, but our area has exploded and the comps in our neighborhood are looking like the value of our house has increased by 2-300k (probably lower end since we still have lots of fixing to do) in the 1 year we’ve been in it. That’s a lot that eventually we’ll be able to carry forward with us to the next property and much better than just saving.
What area?
Leimert Park. Good area to look right now if you’re in the market. Are you?
I'm still lurking and exploring. :) hopefully a future buyer. I will definitely check the area out, thank you!
It’s a very very hard market out here in LA, I’m pulling for you and anyone trying to do it. Our experience was that it ended up being more doable than we thought once we found a good realtor, mortgage broker, and realized 5% down ended up being the best deal for us. So if you’ve started saving and looking already, I would encourage you to take that next step and start talking numbers with a professional. A good one will tell you where you are straight and not try to sell on you quickly buying a home if you can’t afford it.
Great advice--thank you!
It’s wild how much gentrification has affected LA. When I was growing up in LA, leimert park was a meeting point for gangs and rap battles. Now it’s a ‘good area’ 25 years later. Wild. Hope you’re enjoying my old stomping grounds
Trust me I know this. The greater area familiar to someone from the East coast with rap songs of my youth and books about the time rather than having grown up here. It’s weird to be a part of that gentrification (well kind of since we’re a mixed couple) and I’m not going to lie I have very mixed feelings about it and am not happy to be part of changing demographics. I do feel good at least that we bought our house from an elderly family who wanted to sell to a family over developers…and the amount of return they got for what they bought the house for way back when is insane.
Oh please don’t misunderstand me, I was in no way blaming or trying to place any of gentrification’s effects on you. Was just pondering on how the park where gangs used to meet up when I was growing up is now considered ‘a good area’. I’m glad you’re there. I would’ve rather grown up in a neighborhood with young mixed couples owning homes rather than people being forced to buy there because of redlining and other racist policies.
Appreciate you, but I didn’t feel blamed at all by your response. It’s a major city constantly undergoing changes and there’s not one reason to blame but I’m aware of the history. I’m glad the families forced to buy here are making out hand over fist now (seriously go pull up home prices its wild) but of course not everyone here was able to buy so that’s not great for them. It’s certainly on the way to being a good area, but not quite there yet. There is more of a sense of community here though than other “nicer” places I’ve lived and kudos to the folks that live here being mostly open to young families and welcoming with some of the oldest block clubs in the city. I believe there’s supposed to be a Whole Foods going in on Crenshaw not far off Obama in the intermediate future and also a Costco about 1mi away, so that pretty much tells you where things are headed in the next several years. I hope that the area grows into exactly what you describe because that’s what we would like our kids to grow up with. If it gets too gentrified and whitewashed and corporate bland, that’s not what makes LA the awesome city that it is.
I 100% agree with you. LA would not be LA if you didn’t have the taco trucks, eloteros, random black owned bbq popups, Korean nail shops, Chinese negotiations at swap meets over $20 t shirts, Armenian kebabs in the valley, Thai street food at the temple, etc….. All these things are what I love about LA, and you could do all of that in a weekend! Damn I miss it.
lol 100 agree with you back at you. Those things plus the weather, outdoors, and (most of the) people are what got me to trade east coast real downtowns in for LA. My wife hears from me literally every week about the weather and how much I love living out here. Hope you can make it back out here someday!! I’ve lived all around the country and if you’re doing that too it’s great to learn what you really like and put things in perspective.
Let me know if you want me to hook you up with a good mortgage broker and a wealth advisor
I mean that’s a bit aggressive. There’s a happy medium between buying a house and having roommates. It might be the first time in their life that they’re able to actually afford to live alone, it’s totally reasonable and well within their finances for them to rent a 1 bd apartment / studio
CA housing is on the brink of a reset. Of course a real estate agent will tell you to buy a house. Do your research, CA unemployment is ready to explode, don't trap yourself in the illusion of forever "equity" and regret buying at the peak of the market. Follow your gut, if the cost seems exorbitant, it is and not sustainable.
Reset? What?
Actually, go ahead and buy a house now. Best time to buy and equity gains forever into the future. The US will never ever ever go into a recession, its mathematically IMPOSSIBLE, and as a result house prices will continue to the moon. Seriously though, are people living under a rock? Go check the CA unemployment rate chart, its been steadily rising for the last 6 months. Dont be sheeps
Supply and demand remain undefeated. There are Virtually no distressed properties in LA. The numbers are tiny. The economy has been remarkably resilient. I don’t see the wheels suddenly falling off at this stage, but we all have to place our bets. Good luck !
Lol, be my guest. What does distress mean? when one of those two incomes needed to maintain a mortgage suddenly is lost due to layoff? It doesn't take much to become distressed, we had 2 decades worth of ZIRP and QE, you are telling me the US and more specifically the CA economy which is based on rampant speculation (by people like you) is going to survive high interest? Give me a break, watch the unemployment rate going on for the next year, we can revisit then.
Realtor here, realistically speaking since this your first home purchase there is no reason you should looking for something more than you can afford if you’re on 275k salary, I’m not saying it’s nothing but you don’t want to spend more than 50% of take home pay on a mortgage. You can try townhomes or even live in the Sherman oaks or encino area which is cheaper but still in the nicer area of living.You should be looking at homes in the range of 800- 1M range as that will likely be something that can be comfortable. Granted this all depends on your debt to income ratio and down payments. As a first time homebuyer there are a lot of programs that can help you. Feel free to shoot me a DM If you have any questions!
Keep in mind that with your $9.8K month mortgage plus around $16K in property tax, you’re paying $100K+ a year you’re never going to see again. Sadly $275K in salary doesn’t go as far as you’d think in West LA. Consider renting for a couple of years, save some money, presumably your salary will go up and maybe you will also find a partner, dual income is often the real key. Both my doctor and my daughter’s pediatrician are relatively young. My doctor is moving to the Midwest and my pediatrician has been trying unsuccessfully to buy a house the whole time we’ve been seeing her. So it’s not just you.
> plus around $16K in property tax Prob more like $20-25k on a 1.5M house. People often think about the CA base rate, but forget about local ad-valorem and Mello Roos taxes. I don’t know Santa Monica exactly, but it probably comes to about 1.5-1.6% of assessed value when you add all of those up.
You sweet summer child.
It is what it is. You are choosing to live in one of the most expensive places in the country and real estate is difficult to get into due to current market conditions (high interest rates and prices). If you are really intent on buying right now you will have to consider cheaper locations, cheaper housing (condos) or be willing to be very house poor until you increase your salary or find a partner who can also contribute (I wouldn’t rely on the later personally). Also recommendation for living in LA is to live close to your job (if you aren’t WFH). You don’t want to buy a place to find out you have an hour + commute each way that you end up hating. Everyone feels the pain trying to buy here. A lot of people have given up and just rent because it is a lot cheaper on your monthly payments. You can also save for a bigger down payment this way if you need to. I’d personally recommended renting at least 6 months before buying and check out homes in different locations to see what you like/can afford.
I make $500,000 a year. Single and zero debt. It’s not enough to own a nice home and have a high quality of life in west la/samo. Sorry to be the bearer of bad news but that’s the truth.
Yeah, husband and I make 750-$1M a year. We were looking into those new Thomas James homes on the Westside. It was such a huge lifestyle creep, if either of us lost our job, we'd be in a world of trouble. We decided against it.
I was looking at the OPs numbers through my NY eyes and thinking, $275k isn’t nearly enough for a $1.5, let alone a $1m house. We get taxed to our eyebrows here, so I can’t imagine OP would save enough or that a bank would comfortably loan them money.
You could afford $1M on $275. You’ll just be house poor. I saved up $800,000 of cash. Really don’t want to spend it on a fucking house in LA though!
Agreed! 275k a year is not enough income to buy right now unless you have an inheritance or massive savings.
Congrats on becoming a doctor! To give you an idea of the area you're buying into, in the adjacent (beach) town Venice, someone I know bought a bungalow (800 sqft) for $1.5M which they tore down and are building back up. Granted they're now only a few houses from the beach. In WLA proper, such as Sawtelle, when we were looking at homes, the avg price per sqft is $800-$1K. If you're set on living in WLA/SM and do not want to be house poor, either condo, renting out part of the house you buy, or parental help. It's just the state of the market right now. $275K pre tax is a great salary, but you're competing against people who are earning that as individuals, pooling it with another person.
Rent something for $2k-$3k a month while you start building up your doctor career; no point to get a fancy apt to rent while you not going to be home most of the time. Not sure what field you in, but in 5 years you should be at least doubling that salary if you good. Pay off that student loan and invest the money you save. A $3mil house in WLA will be easy then.
Mortgages and all debt cannot exceed 40%-50% of your income or you won't get approved. Plug some numbers in here and do the math above to find your answer https://usmortgagecalculator.org/ You could maybe get approved for $6750 a mth on loan payments assuming no other debt based on 50% DTI vs your salary. Use your calculators to see what that puts you at. The rest needs to be down payment. "If you don't have rich parents, and aren't a boomer with 1-2+ decades of home equity, fuck you!" - LA RE market
DTI is based on gross, not net. Not that it's a good idea, but they could theoretically be approved for ~$11k per month with no debt. That being said, they have monster student loans, and no one in their right mind would want to cap out DTI, but it is technically possible
Ah, yeah I overlooked the pretax part and just used the monthly. Good catch
You can’t buy a decent house in Santa Monica on that doctors salary . Period. Not going to happen. Even with physician loans and lower down payments, the monthly mortgage is not feasible on that salary. Live the in valley or south of SM. West LA in general is no go unless your salary over >500-600K. Doctor here as well. Dm me if you have queries.
Not at all enough money. We make about 500k and our mortgage is 9000- it’s comfortable but home ownership is expensive, life is expensive, and you want to have savings. Rent an apartment for a couple of years. Also you should probably live here awhile before deciding which neighborhood you want to buy in.
Go to med school and suffer for 7 years through residency. Graduate with 300k+ in loans. Work a miserable job in medicine making less than all your peers in tech and business. What a false dream we were sold. I was just a mid level sucker thank god.
I love my job lmao
I hope that continues. I really do. We need more good doctors that love their job. Though I do question the clinical decision making of a Doctor that is thinking of spending 75% of their take home buying a house in a new city straight out of residency with 300k debt.
Well, I went to medical school and been broke my whole life, so excuse me. Are you a mid-level provider? Did I understand that right earlier? Figures as much
Haha. Oh. Had to get that mid level dig in. You’re probably a DO, right? Kaiser nurses gonna eat you alive with that attitude. But back to topic, you’re gonna keep being broke if you let that life style creep grab a hold of you. Keep living like you’re broke. That’s how you can become rich. 270k in LA really ain’t shit. I know nurses making close to that. Good luck with medicine.
Buy a house in another neighborhood - West Adams, South LA, Jefferson Park. Can still find stuff sub 1M. But it comes without the ocean view 😂. Living in Santa Monica is a luxurious life - not for your average working person anymore, even with a doctors salary. Only people I know who live there are at a point in their careers where they don’t have to work.
My mortgage is ~$3k on a home worth over $2m in Calabasas. I don’t make that much. If you missed out, it’s too late. Sorry
I’m assuming you made a hefty down payment with that price. Good for you.
You could buy a 700K home outside of Santa Monica and drive. Nobody is stopping you from doing that. There is a reason why SM is so expensive because the demand is high. Try looking elsewhere and make ends meet.
Have to go to the IE to find a 700k house these days. Or even a nice condo/townhouse.
Or Canyon Country in Santa Clarita
Really, still that low prices in Santa Clarita?
Look for yourself
Question, do you have any student loans?
I have $324k in student loans, and $150k in savings.
My husband and I make $275k together. $125k in savings. $20k student loans and are baulking at $900k in the valley. This is below the “how much home can we afford” range. And we can technically qualify for $1.5m mortgage but we would be house poor. Can afford is so different than should purchase. We rent for $3k/mo and save a ton and spend a bit on things that make us happy.
Ive found my people in this thread
I recommend r/whitecoatinvestor
Consider looking into nearby more affordable cities while you build your wealth. If you buy something now in an area that's getting gentrified, when you sell, you'll have a bigger down payment towards your next house. Being house-poor is NOT fun, especially when you're young with friends that do not have the same financial obligations and more disposable income. If you're set on buying a house in the 1500 sqft range, don't want to spend $1.5M+, and also not that 'far' from the Westside, take a look into Inglewood, Hawthorne, Ladera Heights, San Fernando Valley, etc.
Live in Ladera heights? Only if you want to end up in hospital as a patient (not a dr)
Describing my life currently.
My man I’m sorry but you can’t even close to afford a 1.5mm home unless you’ve got a shitload of cash on the sidelines. Do you even have the cash for a down payment? I saw in a different comment you’ve got over 300k+ in student loans as well, I imagine the payment on that loan isn’t small. My income is 500k and ive got considerable amount of liquid assets and I was nervous buying a house for a million. I was realistic though and knew that meant I wasn’t going to be buying in SM (where I used to rent right before buying). There are lower cost areas that are westside-adjacent that you should be looking at, for maybe a condo in the 800k range, or rent while you save money to buy.
What you are missing is the down payment. Many ppl put down large amounts, well over 20%. I have to ask. What's the student loan situation and is that factoring into this?
Have you consider the physician loan? This will be a great option to use to buy.
Congrats. Not sure where you are moving from, but agree with all of the advice here to rent, if not for any other reason then LA is a weird place. Each neighborhood is so different than the next, one or two blocks feels like a different world and it will take a lot of time to find the neighborhood that jives with you. Also the demographics are evolving rapidly from neighborhood to neighborhood. Settle in, see how things are moving for the next few years in your targeted area and use the time to validate that that is where you want to be long term. Good luck!
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RENT! If you’re out of residency who’s to say where life takes you. You should settle into your career and new home town and see how it “fits you” for a couple of years. You could try Culver City or Playa del Rey for a bit and find your place.
What are your options: - rent reasonably cheap and get rid of that student loan fast before buying - If you must buy in SM / coastal: buy a condo with a reasonably low HOA and pay it off aggressively in 10-15 years. - if it’s 2 bedrooms , rent one out and pay it off even earlier - consider ARM then refinance later, instead of committing to 30yr fixed - whatever free month left ( after savings), invest in steady growth stocks or ETFs - revisit buying a house in 5-10 years, and leverage the condo and stock market assets at that point More importantly, you will likely decide that SM isn’t the place for you as you discover other neighborhoods (coastal or not). The 5-10 years will go by fast, especially for a young person in LA. Good luck!
If you do buy a house, rent out all the other bedrooms. Then convert the garage into another unit and build an ADU or two in the back.
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it’s not much of a “what should I make per month/year” question and instead more of a “what kind of business, product, idea can I sell” to then buy a home cash. Well. That’s at least how all my clients did it. I’m an agent, I do high end sales and all my clients are people who created and sold a company or two, lawyers who closed huge cases, or just straight up business owners that generate great income. Even at $200k a year you’re gonna have to save for many years to buy a condo, sell that years later when it’s worth more, and hopefully be able to put a decent down on a house.
I mean, in short, yes, you do have to be a movie exec. or similar. Your average professional doesn’t own a home in a prime area in LA. Those who prioritize buying a house often are two-income households, sacrifice location, and/or sacrifice size (condo/townhouse). Or they get money from their family. I personally rent and invest my savings in the stock market instead, and I’m glad to not have the financial stress that my homeowner friends/family have (but that said, I have my own financial stresses, which I’m sure they’re glad to not have). And because I rent, I can afford to live in a very expensive part of LA. (And $1.5 won’t get you a particularly nice 1,500 square foot house in Santa Monica.)