Originally Posted By: jimbrewer
Originally Posted By: supton
I wound up where I am because it was between our jobs, 35+ miles to each job. Turns out we like the area we are in. Low crime, good small school, places to hike, bike, etc. Might not be able to stay here forever but it sure feels like the place where we'd like to retire to.
We also figured we'd spend like $100k more on a house closer to work. That $100k extra on a mortgage would cost something huge in interest. Enough to offset vehicle costs? Not sure.
It would cost you another $500 bucks per month to buy that extra 100K house, assuming a 30 year mortgage. mostly pre-tax dollars the first few years. You probably aren't going to get out of owning a car even if you were to buy the fancy house, so your savings for the house would be a little gas, a little maintenance, maybe a little insurance a somewhat older and cheaper car. Maybe 200 bucks per month, after tax effects. In other words, the fancy house costs you maybe a net of 300 bucks per month. On the other hand, the house is not a wasting asset like a car. Its likely to hold or appreciate in value. I bet it's in a better school district. The "better" the location the more it is likely to hold or appreciate in value. Then there is your time and the pleasure of living in a better place. That's worth something, too.
My point is, it's a surprisingly close call, even with a significant price difference in the convenient place versus the inconvenient place.
Don't forget the property tax bill in that nicer neighborhood/easier commute. I can't speak for supton's neck of the woods, but here compared to where our household commutes to is a big difference. I mentioned earlier that two of us commute 60 and 100 miles in our household daily. Moving somewhere 15 to 25 miles closer would easily make our tax bill 150% of what it is today, not to mention a minimum of double the initial purchase price of our home. The increase in property tax could just about cover our gas cost for the year, maybe 80% of it.
Originally Posted By: supton
I wound up where I am because it was between our jobs, 35+ miles to each job. Turns out we like the area we are in. Low crime, good small school, places to hike, bike, etc. Might not be able to stay here forever but it sure feels like the place where we'd like to retire to.
We also figured we'd spend like $100k more on a house closer to work. That $100k extra on a mortgage would cost something huge in interest. Enough to offset vehicle costs? Not sure.
It would cost you another $500 bucks per month to buy that extra 100K house, assuming a 30 year mortgage. mostly pre-tax dollars the first few years. You probably aren't going to get out of owning a car even if you were to buy the fancy house, so your savings for the house would be a little gas, a little maintenance, maybe a little insurance a somewhat older and cheaper car. Maybe 200 bucks per month, after tax effects. In other words, the fancy house costs you maybe a net of 300 bucks per month. On the other hand, the house is not a wasting asset like a car. Its likely to hold or appreciate in value. I bet it's in a better school district. The "better" the location the more it is likely to hold or appreciate in value. Then there is your time and the pleasure of living in a better place. That's worth something, too.
My point is, it's a surprisingly close call, even with a significant price difference in the convenient place versus the inconvenient place.
Don't forget the property tax bill in that nicer neighborhood/easier commute. I can't speak for supton's neck of the woods, but here compared to where our household commutes to is a big difference. I mentioned earlier that two of us commute 60 and 100 miles in our household daily. Moving somewhere 15 to 25 miles closer would easily make our tax bill 150% of what it is today, not to mention a minimum of double the initial purchase price of our home. The increase in property tax could just about cover our gas cost for the year, maybe 80% of it.
