Author Topic: A house close to work or a less expensive house??  (Read 6526 times)

tycanis

  • 5 O'Clock Shadow
  • *
  • Posts: 19
A house close to work or a less expensive house??
« on: March 09, 2015, 07:05:28 PM »
First off this is my first post so if I am not putting this in the right place just let me know.

My current job has a lot of travel, about 50-75%, on top of 3-4 AM start times.

The opportunity might be opening up to switch to another position which we require moving.  That being said I am trying to weigh the better financial option to either get a house within 2 miles of work for $30K more or getting a place with a 30 mile one way commute.

As further background I currently do not have a mortgage and the more expensive place would require a mortgage to cover the extra where the commute one would not.

Please help as I am still very new to this FIRE thing.

GizmoTX

  • Handlebar Stache
  • *****
  • Posts: 1450
Re: A house close to work or a less expensive house??
« Reply #1 on: March 09, 2015, 08:02:13 PM »
You do not want a 60 mile/day commute.

With a volatile job situation, why are you buying a house?

If you are single & will continue to travel as much, you want a lock & leave place, not a house that requires yard work & upkeep.

MsPeacock

  • Handlebar Stache
  • *****
  • Posts: 1571
  • Location: High COL
Re: A house close to work or a less expensive house??
« Reply #2 on: March 09, 2015, 08:05:56 PM »
What is the base price of the house (e.g. is it 100k vs. 130k or 450k vs. 480k)?  How stable is the housing market (along w/ the PP question about job stability)? Can you afford the 30k more? Would living closer reduce your transportation costs? What is the improvement in general living for you if you reduce you commute time?

darkadams00

  • Bristles
  • ***
  • Posts: 419
Re: A house close to work or a less expensive house??
« Reply #3 on: March 09, 2015, 08:59:13 PM »
From a purely financial position of a car commute vs a non-car commute, the monetary payoff horizon is measured in years as long as you keep a car. Even if you can bike around town, making the car redundant, the payoff takes years. However, for me, a car commute that takes longer than about 20-25 minutes or deals with heavy and/or stop-and-go traffic is beyond my threshold of patience. I will be frustrated when I get to work and frustrated when I get home. Others might feel totally different.

So I take the monetary benefits and lump them in with the mental and physical health benefits and call it done. Of course, in my case, it's even easier because I was able to drop to single-car status, so the finances caught up quickly. In your case, you will have to decide if you feel the same way with little regard to the finances. And if you drive the car, the decision will definitely be a personal, not financial, one. One other point to consider. If you live two miles away, getting to work when your car is in the shop will be a breeze.

aspiringnomad

  • Pencil Stache
  • ****
  • Posts: 956
Re: A house close to work or a less expensive house??
« Reply #4 on: March 09, 2015, 09:55:39 PM »
Seems like a no-brainer to me. You won't get back the time spent commuting, but you'll almost certainly get back some of the extra money put into a long-term asset like real estate. Not to mention the psychological and physical benefits if you end up biking or walking instead of car commuting. Go for the closer in place.

tycanis

  • 5 O'Clock Shadow
  • *
  • Posts: 19
Re: A house close to work or a less expensive house??
« Reply #5 on: March 10, 2015, 05:08:23 AM »
You do not want a 60 mile/day commute.

With a volatile job situation, why are you buying a house?

If you are single & will continue to travel as much, you want a lock & leave place, not a house that requires yard work & upkeep.

I currently have a 60 mile/day commute when I am not traveling.  My job situation is not volatile.  I work for a well established company but my current position requires a lot of travel.  I am married with a 2 year old and another on the way which is part of the reason I am considering a position change at work.  I currently own my house outright and one of my few stress relievers is actually to catch up on the yard work.

tycanis

  • 5 O'Clock Shadow
  • *
  • Posts: 19
Re: A house close to work or a less expensive house??
« Reply #6 on: March 10, 2015, 05:15:25 AM »
What is the base price of the house (e.g. is it 100k vs. 130k or 450k vs. 480k)?  How stable is the housing market (along w/ the PP question about job stability)? Can you afford the 30k more? Would living closer reduce your transportation costs? What is the improvement in general living for you if you reduce you commute time?

The base price of the house is 90K vs 120K.  I would consider the housing market stable but am unsure how to analyze this.  The community is a tourist destination during the summer and the house is on the lower end of the price spectrum with many house running over 200K.  My wife and I currently live off of just my income.  We get by and save a good amount right now, about 25%, and are going through this month tracking all of our purchases to see where we can save more.  I would be able to afford a mortgage but do not have enough to buy the more expensive house outright.  Currently I spend over $120 a month on gas and we own two vehicles.  With the closer house we would get rid of one of the cars and cut fuel costs considerably.  I do not know what my general living improvement would be.  I have always driven 30-60 minutes to work ever since starting with my current employer 10 years ago.

Sibley

  • Walrus Stache
  • *******
  • Posts: 7428
  • Location: Northwest Indiana
Re: A house close to work or a less expensive house??
« Reply #7 on: March 10, 2015, 07:22:11 AM »
If you can afford it, buy the house close to work. Sell the 2nd car and walk/bike/take transit to work. Also attempt to run errands via foot or bike.

Why sign up for a long commute when you don't need to?

thd7t

  • Handlebar Stache
  • *****
  • Posts: 1348
Re: A house close to work or a less expensive house??
« Reply #8 on: March 10, 2015, 07:23:27 AM »
From MMM:
Quote
In other words, a logical person should be willing to pay about $15,900 more for a house that is one mile closer to work, and $477,000 more for a house that is 30 miles closer to work. For a double-commuting couple, these numbers are $31,800 and $954,000.

http://www.mrmoneymustache.com/2011/10/06/the-true-cost-of-commuting/

Sounds like $30k is cheap to reduce your cost by 30 miles each way.

clarkfan1979

  • Magnum Stache
  • ******
  • Posts: 3352
  • Age: 44
  • Location: Pueblo West, CO
Re: A house close to work or a less expensive house??
« Reply #9 on: March 10, 2015, 08:06:40 AM »

My current job has a lot of travel, about 50-75%, on top of 3-4 AM start times.



What does 50%-75% travel mean?

Does it mean that 50%-75% of the time you go somewhere else besides your office? Do you have to drive to the airport or other neighboring cities?

If you travel a lot for work moving closer to your office doesn't seem worth it. The true cost of commuting is not going to be reduced if you are still spending significant amounts of time in your car while "traveling"

Fodder

  • Stubble
  • **
  • Posts: 217
  • Location: Ottawa, ON
Re: A house close to work or a less expensive house??
« Reply #10 on: March 10, 2015, 08:10:49 AM »
$30k sounds like a reasonable price to have such a short commute.

But beyond the commute - how are the neighbourhoods?  Are they walkable for running errands?  Are there good schools and parks?  Will you have a yard that works for your family/time/willingness to do yard work?

30 mile one way commute is insane to me.  My commute is half that and I would consider it to be the limit of what I would do.

In terms of you being gone travelling - is one location more or less convenient to the airport/to the locations where you'd be travelling?

Jersey Brett

  • 5 O'Clock Shadow
  • *
  • Posts: 64
  • Location: Takoma Park, MD
  • No matter where you go...there you are.
Re: A house close to work or a less expensive house??
« Reply #11 on: March 10, 2015, 08:44:24 AM »
Close to work. The time saved alone is worth it. The gas money is icing on the cake.

DrSweden

  • Stubble
  • **
  • Posts: 124
Re: A house close to work or a less expensive house??
« Reply #12 on: March 10, 2015, 09:12:39 AM »
Well it depends. If the schools are good close to work so go for it. We chose between living close to work or 30 minutes by public transportation away (20 km). We chose 30 minutes away. It was because better schools and nature and beach close by. The house was cheaper as well but that was not the main issue. Schools are important.

Bracken_Joy

  • Walrus Stache
  • *******
  • Posts: 8927
  • Location: Oregon
Re: A house close to work or a less expensive house??
« Reply #13 on: March 10, 2015, 09:26:45 AM »
That's an hour more per day you can spend with your child, your wife, and the kiddo on the way. Money be damned, your time IS your life. (Although in this case the money seems a wash, IMO). Move closer to work.

skunkfunk

  • Handlebar Stache
  • *****
  • Posts: 1053
  • Age: 37
  • Location: Oklahoma City
Re: A house close to work or a less expensive house??
« Reply #14 on: March 10, 2015, 09:42:43 AM »

tycanis

  • 5 O'Clock Shadow
  • *
  • Posts: 19
Re: A house close to work or a less expensive house??
« Reply #15 on: March 10, 2015, 09:43:55 AM »

My current job has a lot of travel, about 50-75%, on top of 3-4 AM start times.



What does 50%-75% travel mean?

Does it mean that 50%-75% of the time you go somewhere else besides your office? Do you have to drive to the airport or other neighboring cities?

If you travel a lot for work moving closer to your office doesn't seem worth it. The true cost of commuting is not going to be reduced if you are still spending significant amounts of time in your car while "traveling"

50-75% travel means that at least two if not three weeks out of four I am driving to another state or flying to another state.  The position change would actually involve only traveling 3-4 times a year so lets say 10% of the time.  I moved to where I currently am because with my amount of travel the distance to the office made no difference.

tycanis

  • 5 O'Clock Shadow
  • *
  • Posts: 19
Re: A house close to work or a less expensive house??
« Reply #16 on: March 10, 2015, 09:46:47 AM »
$30k sounds like a reasonable price to have such a short commute.

But beyond the commute - how are the neighbourhoods?  Are they walkable for running errands?  Are there good schools and parks?  Will you have a yard that works for your family/time/willingness to do yard work?

30 mile one way commute is insane to me.  My commute is half that and I would consider it to be the limit of what I would do.

In terms of you being gone travelling - is one location more or less convenient to the airport/to the locations where you'd be travelling?

The neighborhood is nice and a lot of things are within walking distance including the library just down the block.  The parks are great and so are the schools but we are home schooling so the quality of the schools is not much of a consideration.  The yard would actually be on the small size.  I currently have 1 acre and cutting that down to 1/3 an acre is unfortunate.

Socmonkey

  • Stubble
  • **
  • Posts: 125
    • Doubling Dollars
Re: A house close to work or a less expensive house??
« Reply #17 on: March 10, 2015, 10:31:44 AM »
-You would spend at least $100 less a month on fuel costs by being closer.
-You can spend more time in bed for those 3-4AM start times.
-You could get home fast from work if there is a family emergency.
-At least an hour a day more time to do what you want, instead of being in a car. (That's like 10 full days extra a year, 5 days a week for 50 weeks out of the year)
-The extra 30k on the house would cost about $200-$215 a month on a 15 yr mortgage.

You said you like to do yardwork, well there is probably less on a 1/3rd acre lot. However, you could always start a vegetable garden and get your stress relief, as well as having delicious home grown vegetables to eat.

You are also not throwing away that 30k, it will still be there in home equity value.

NoraLenderbee

  • Handlebar Stache
  • *****
  • Posts: 1254
Re: A house close to work or a less expensive house??
« Reply #18 on: March 10, 2015, 11:27:35 AM »
This isn't a simple comparison between housing costs and commute time. The change in travel % is huge, and it may make a much bigger difference in your life than an hour per day of commuting. I think you need to figure how much time you'll get back in your week from the travel reduction--in terms of hours, and in terms of quality of life, being home for dinner every night, putting your child to bed, seeing your wife every morning, etc.  Then assess whether having a large yard, etc., is worth a 60-mile daily commute.
There's no doubt that commuting sucks up time and energy. I'm just thinking that for you, it may feel quite tolerable compared to what you're doing now.