Author Topic: Recent Opportunity Lowers Household Income, Tighter Job Market, Higher COL  (Read 3229 times)

PolymathPaul

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My wife and I wanted to move west. We are average people with average jobs and skills. We're not going to suddenly support ourselves with self-employment or land a job that allow us 8 weeks of vacation a year. We're not doctors, engineers or web developers. We are young and healthy and we were tired of wasting our youth in a region (Northeast USA) we knew very well. We wanted some adventure, but were not comfortable with selling everything to live in a van. My wife was stuck in a career she loved but a job she hated. She wanted out, but nobody was making an offer that would support a move. I loved my previous job, but wanted new scenery, and landed the first job I applied to. They made an offer too good to refuse. Awesome city, good salary, big sign on bonus, yearly bonuses, lots of time to make the move cheaply and stress free.

I'm 2 years into the utility industry, which favors stability and people who stick around. Experience is in high demand, so I got a very nice starting salary to support us in (mountain town Arizona).

My current salary is nearly 3/4 of what our (my wife and I) total income was back in Pennsylvania.

There are a few aspects to this that worry me;

- My new city has high housing prices,and although we've got a sizable "down payment fund" we can't buy a house until my wife is employed. We also have a potentially "pro-Mustachian" huge life decision in 3-years that may have us head back east. Basically, two free places to live in booming job markets.
- Renting means giving up "Mustachian" morals. Rentals in this town are either too expensive or lack proper storage. I'm a DIY guy who prefers cheap transportation and bicycles. I don't want to live with my bike in my dining room.
- My wife's skills are non-profit based meaning she usually doesn't make much above US Yearly Average. She's open and understanding to the possibility of getting additional education for increased skills, but that costs money.

I'm looking for some suggestions on how to handle: A) higher cost of housing when I'm ready to buy B) career and housing strategy when I could potentially bail in 3 years and C) quick access skills for institutional employment (gov, higher-ed, med)
« Last Edit: June 16, 2015, 03:47:01 PM by PolymathPaul »

Alabaster

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Yeah, get over the bike in the kitchen/living room. It won't kill you. It works just fine for me. Renting in not anti-mustachian.

If you're a DIYer then wait until you can get a great deal on a home and fix it up.
« Last Edit: June 16, 2015, 05:33:34 PM by Alabaster »

PowerMustache

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I agree with Alabaster.  Renting is not antimustachian, in fact if it forces you to pare down your material goods it could be very mustachian. Buying a house when you need flexibility in a few years would certainly not be a good choice. 

Neither renting nor buying are inherently antimustachian.  Housing markets vary widely in different areas. You say that renting and buying are BOTH expensive in your area - but that doesn't say much about which is the better choice. The right question to ask is, is renting expensive compared to buying? You can answer that by comparing house prices to rental fees, or by using that handy New York Times rent vs. buy calculator (google that phrase if you're not familiar). For example, I live in Seattle where both renting and buying are expensive, but buying is relatively more expensive than renting. So, I rent. Additionally, buying has the added disadvantage of lack of flexibility due to cost of selling, so if you are not certain you are settling in for at least 5-10 years then renting is almost always the way to go.

So about your questions:
A) Don't worry about the higher cost of housing, just rent. 
B) The housing strategy is not to buy, since you may need to bail in 3 years.  Career strategy would be to continue as though you will not bail in 3 years, since you may decide to stay.
C) Can't comment on this one.

PolymathPaul

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I'll play with that calculator again. When I was looking in our old town it suggest buying even if we were only planning on being there two years.

EDIT: Played with the calculator. Looks like we're pretty much even. Average rent for a 2 bedroom house with a garage is about $1250, and average cost seems be around $190,000.

If we planned on staying for 3 years, owning might be a better choice, via the calculator.
« Last Edit: June 16, 2015, 05:52:11 PM by PolymathPaul »

MayDay

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Those seem like pretty cheap housing costs to me.

expatartist

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We have no problem with my beautiful ebike in our beautiful living room.
Doesn't sound like there's a compelling reason for you to buy if you're not going to stick around, nor does it sound like you could turn your home into a viable rental after moving either.

PolymathPaul

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We've got four bikes. One "city" and one mountain bike for each of us. Mountain bikes are kinda dirty and not always suitable for indoors where you like to keep things nice.

And no, I won't get rid of my mountain bike.

The other issue is tools and equipment for wrenching on my own vehicle. I've never paid more than $2000 for a vehicle and I've never lost more than $500 on one. I've never paid anyone else to do more than $500 worth of service on a vehicle of mine and the only time I did that was years ago when I was still a kid. I'd estimate that in 15 years of owning my own cars, I've had 8 vehicles and "lost" a total of $2000. My wife's 2012 Honda Fit has depreciated more than that in 2 years. I'm very good at selling cars for what I pay for them.

I'm kind of attached to having space to fix things. I'd be ok with a 1 bedroom 1 bathroom apartment over a single car garage, but I've yet to see that option.
« Last Edit: June 16, 2015, 06:15:40 PM by PolymathPaul »

Elderwood17

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While I haven't rented for a long tome, there is nothing wrong with it and it has a number of advantages.  Especially if housing prices are high, but if the average is below $200k then you should be able to buy pretty reasonably.

In these relocation situations where you don't have everything figured out yet (eg spouses job) patience can be very important.  It will all work out in time.