Relocate for less pay but lower COL?

[lateralwire]

I'd like to get the opinion of the MMM community on a potential move to a new city. I would have to take a pay cut for this move, but it would be a step up professionally. So, is it a good move financially? What else should I be factoring in?

I'm in the public sector, so options for career advancement typically have two paths: move up within your current organization or move to a new city. I've reached a point in my career where I've realized that I need to move up in order to get the most satisfaction out of my work (side note: I love my work, and will likely work through to normal retirement age regardless of my FIRE situation). I also have decided that I don't like working for my boss, and I view this person as an obstacle to success. There are no opportunities to advance internally in the near term, although 2-3 years out could be different. I'm paid reasonably well and I live comfortably within my current income. I save about 40% of my take-home pay (+10% 401k contributions and pension contributions), and with projected raises and debt elimination I will be near or over 50% within the next 2 years.

I'm currently in Charlotte, where the COL is high compared to most places in the Carolinas. I bought my condo in center city during the Great Recession so I got a hella good deal, and I have a ton of equity built up. The opportunity is in Columbia, SC. It would be about an 8-10% pay cut to move there but the COL is insanely cheap compared to Charlotte. I can buy a fixer-upper house within a couple of miles of my office for around $100-120 or a non-fixer-upper house for $150-200k; the only downside is I'd have to live in a real house and not my urban oasis (which I love). Benefits are probably a bit better in Charlotte, but likely not enough to make a significant difference. Both offer a pension, which is the key benefit for me as I think about the future.

Professionally, the position in Columbia would be a lot of responsibility and would check a lot of experience boxes that look great on a résumé. It would probably be a 2-4 year role and would set me up well for higher paying positions down the road, including potentially returning to Charlotte.

So as I see it, my options are:

• Sell my condo here and use the equity to buy a house in Columbia. I would probably net about $80-90k depending on sales price and fees. I could then buy a house down there and do a 10-15 year mortgage to pay down about $50-60k.
• 2) Rent my condo here and rent in Columbia. I don't have enough saved for a downpayment on a second home yet. If I keep my condo in Charlotte I should be able to rent it for about $1500/mo, which is about $300 more than my mortgage/escrow/HOA payments each month.
• Sell my condo here and rent in Columbia. This feels like the least desirable option, but I would be able to invest $80-90k and be debt free.

I have done a mock budget for a year in Columbia and the math works out well if I sell here. I would still save roughly the same dollar amount as I'm saving now, I would just be losing out on income and equity gains in Charlotte. I would, however, be debt free in a shorter amount of time due because of the equity I've accrued - probably within 10-15 years depending on the mortgage amount and terms; plus I would be saving all of that extra money that goes into mortgage payments over time. The other minor externality is that I'm in a graduate program that my current employer is paying for, and quitting my job now would mean I would lose the reimbursement on the summer summer term (~$3.5k), but this could be considered a sunk cost and absorbed by my equity gains.

So, am I crazy? Does taking a pay cut and moving to a new city for this kind of job opportunity make sense financially? Any thoughts on this are appreciated.

[rothwem]

Hell no. Heeeelllllll no. Re-read your post from the perspective of someone else and tell me what you would tell them.

Less pay
Worse benefits
Longer commute

On top of that, you’re moving up professionally...so basically it’s like you’re making even less. All for a slightly lower COL?

[lateralwire]

No, this isn't a move strictly for COL benefits. It's a move for professional experience, and the COL makes the move worth considering.

I can't get the experience I need to move up in my current organization without moving to a different role, and there aren't likely to be any roles that I would be eligible for in the foreseeable future that would offer this sort of opportunity. The position in Columbia offers the opportunity to gain the needed experience to advance higher up in the future. It's higher profile and more responsibility (again, in a profession that I enjoy). So, big picture its definitely a good move professionally.

The commute would be about the same time wise. I'd have to bike instead of walk, but I'm ok with that + I could drive if I had to. I don't know for a fact that the benefits are worse, just making an assumption that they are since it's a smaller agency, but I think it's hard to make a decision strictly on benefits when you don't know what the variables are to make apples to apples comparisons.

[martyconlonontherun]

Obviously, limited information here but I would say stay in Charlotte.

When people think HCOL, they are talking about disproportionately high housing costs to salary. Charlotte isn't that and if it was, it doesn't matter as much because you have the housing already. I think the salaries would outweigh any benefit moving to a VLCOL area. If you were 2 years from retirement, it might make more sense but probably better to get the money now.

[lateralwire]

True, The HCOL here doesn't really apply to me since I bought at a reasonable price, but housing costs are generally going up here. The main point of the COL comparison is that I can use it to my advantage to get more equity out of my condo if I sell, thus making my COL in Columbia incredibly low compared to what it is here, and I would be able to invest more medium term (5-15 years) once I'm debt free. I think the math makes sense in the long term, and at this point it's more about if I make the move, does the math make sense in terms of the options I mentioned above.

Career advancement in my field is tough too. I've never taken a pay cut, and if it were a smaller pay cut I wouldn't even blink at this move. Plus there's the tangible but not measurable benefit removing myself from a situation where my boss is unsupportive of me and my career development.

[SailingOnASmallSailboat]

If you know you want to wind up in Charlotte eventually, and housing costs are going up, it might cost you more to get back in than you possibly save (which sounds iffy in any case) by moving. Just a point to consider.

[marblejane]

Have you tried negotiating the salary for the Columbia job? It never hurts to ask for a higher salary, and that could help reduce the potential pay cut. It sounds like you are excited about this role but see yourself long term in Charlotte, which to me indicates that you should hold on to the condo for now and rent in Columbia if you decide to take this role. I'd also suggest taking it step-by-step - rent in Columbia for a year before deciding whether you want to buy property there. You can always sell the Charlotte condo later down the line too.

[lateralwire]

Good question. It's a long story, but the numbers I'm basing everything off of reflect a potential negotiated salary. I know that they are willing to negotiate a bit, but because its a public sector job I can look up my boss's salary, so I highly doubt they will pay me more than him in this new role... so I'm basing my estimates on a few thousand less than what he makes and still in or just above the salary range on the job posting.

[FLBiker]

Interesting -- I read your post and had the opposite reaction of most of the responses.  I'd move.

If you don't like your boss and plan to work for a while anyway, to me the financial implications are less important than how much you'd like your job in each city.