TL;DR - our neighborhood isn't great for kids, but our house is amazing for FIRE purposes. We'd like to move for our kids sake, but we'd make a considerable financial sacrifice to do it.
Life Situation: Married (filing jointly) ages 39 and 42. Kids 7, 5, and not yet born (due in August). Live in a HCOL ski town in UT.
Gross Salary/Wages: Me ~$70-90k/year (work 15-20 hours per week, varies based on my motivation), Mrs. WW $3-5k/year (substitute teaching for fun)
Individual amounts of each Pre-tax deductions: varies a bit but we use solo 401k and tIRAs to keep our MAGI optimized for ACA subsidies.
Qualified Dividends & Long Term Capital Gains: About $10k per year spread through retirement and taxable accounts
Rental Income, Actual Expenses, and Depreciation: Basement apartment (in our primary) nets about $17k per year after expenses. No other rentals right now.
Current expenses: $32-35k/year (tracked very carefully by my wife). I'm going to leave out the gory details since this question isn't really about optimizing expenses; we do pretty well at that as it is.
Expected ER expenses: $25-30k/year once kids are all launched, but that's 20 years out.
Assets:
$300k in IRAs and 401ks
$200k in taxable
$900k house (owned outright/no mortgage)
$25k in industrial tools/supplies for my business
2 cars worth maybe $5k combined, if we're being generous
$15k worth of bicycles/bicycle parts and frames
Liabilities: None. So NW somewhere between $1.4 and $1.5 million.
Specific Question(s):
We live in a McMansion on a golf course (at the time we purchased it, it was less than half it's current value, and it was an ideal place to live for Mrs WW to commute by bus to her postdoc). Now that we have small kids, and another on the way, and she no longer works, we notice the shortcomings of the neighborhood for kids more and more. The street we're on is pretty busy, there are no sidewalks, there's no park or public gathering place other than the golf course, and groceries/free concerts/library are about 4 miles away (there's a nice bike path, though).
So it's not a great place for the kids. They are isolated from their peers (nobody in the neighborhood lets their kids roam around, even playing with friends 1/4 mile away tends to involve driving for our neighbors). We're the out of place bike-commuting hippies, basically.
But our house is great. It's huge, but we've leveraged that to bring in quite a bit of income with a basement apartment. It has plenty of room for my tools and our bikes and skis and other gear. It's not an architectural wonder or anything, but it's financially awesome. Or at least as awesome as a nearly-million-dollar house can be.
We could move to another neighborhood nearby that's more centrally located (we rarely drive as it is, but this would reduce driving to basically zero) and is very quiet/kid friendly. Open space and trails accessible safely for even small kids without supervision, lots of fun trail/ski access for everyone just like where we live now, etc. Awesome for kids, just as awesome as where we are currently for adults.
But that neighborhood is also more expensive. To get a house roughly equivalent to what we have now (including space to build an apartment for passive income) would cost $100-200k more than our place. Figure in costs to sell/move and that jumps up another $50k or so. Not to mention the hassle.
We're not interested in moving to a LCOL area, so feel free to facepunch about our insane housing costs - but I'll ignore it.
So: we're currently FI, albeit barely. Should we give that up to improve (theoretically) our situation for our kids, and REALLY concentrate our NW in our house (even more so than now)?
Other factors:
-I'm not interested in quitting work outright (I like what I do and do better with a little bit of schedule/responsibility/structure), but it seems like every year I work a little bit less. I have a hard time imagining not bringing in some form of income. Mrs WW is a biochemistry PhD who is passionate about primary STEM education so she will probably end up working part time for the school district at some point once our youngest is school aged. The district has made it very clear they want to hire her anytime she's willing to work. Likewise if my business goes belly up for some reason the recreation district here would hire me to run/maintain grooming equipment and do fun stuff like that in a hot second. So we don't need or want to live on investments or passive income anytime in the medium term future.
-Kid friendly neighborhood has a lower performing school. I'm not personally concerned about that (it just has more hispanic kids, really), nor is Mrs. WW.
-We haven't decided whether we want to pay part/all of kids college. I'd guess we'll pay some of it.
-We'd like to foster/adopt more kids in the future, which obviously costs money.
-Mrs. WW's mother lives with us, and is not able to live on her own. She's in basically good health and on SS/Medicare, but she will require some amount of extra care/resources from us at some point in the future.
I see our options as:
1: Stay in place indefinitely.
Pros: money volcano continues to erupt, as much free time as adults want to do what we want, plenty of resources for MIL, more kids, have more money not tied up in house, etc.
Cons: car-dependent neighborhood is terrible, street is busy and dangerous for kids.
2: Stay for a few more years.
Pros: save up more money to make moving less financially stupid (sort of), can avoid stress of moving with pregnant wife or new baby, can be opportunistic if a really great house comes on market where we want to be.
Cons: By the time we'd move, kids would have missed out on a lot of roaming around on their own having fun.
3: Move now.
Pros: gets us where we want to be, kids out being free range. There's a house that would work for us on the market, too.
Cons: either we'd have a mortgage again, or we'd have almost nothing in liquid non-retirement assets available for a while. Costs at least $150k and more like $250k to accomplish. Means giving up FI status and being house poor (we're arguably already house poor).
Thoughts?
-W