500th post!!!!
Been holding back commenting on anything else to try to make myself write this post, why not try to make a round number something a bit more interesting?
To move or not?
I will try to paint a full picture, I think this might come out as stream of consciousness but I hope you can follow it and offer some helpful insights.
Currently live ~20 miles from work, in the Norfolk area there is lots of water this means we have bridges and tunnels consequently there are only two routes between work and home. This is commute not great but is manageable as the drive normally takes less than 30 min (maybe am just accustomed to it...), the real pia problem is during the summer we get lots of tourists that clog the two routes and the commute time can drastically increase.
Current situation:
>> Recently refinanced condo, 100k owed, probably worth ~140k. 150$/mon condo fees, new rate is 3.375/15 year.
>> Been with current employer over 10 years, good pay/benefits/coworkers/casual environment/interesting work.
>> Father lives with me, I recently helped him (wrote sizable check + carried heavy stuff + painted stuff etc) open a store near the condo. Store is off to a great start and is in the right location. He helps around the condo doing most of the chores but does not pay rent, I pay for the majority of the food and all the utilities. This started bit over a year ago when he moved from outside the area after a job loss.
>> Glanced around for other jobs recently but most opening I am even sort of qualified for are also located near where I currently work. I could put more time into this but I dont expect positive results.
>> Biking the commute is less than practical, would ride 3 miles to the bus stop, take bus across bridge, then ride 6 miles on decidedly bike unfriendly roads. Probably 1hr each way. The bus fare largely cancels the gas savings, have in past done the math, there is car maintenance but I will just state that riding a bike is not a practical alternative to driving from my current home.
>> Probably a bit over 5 years from FI, to many variables at this point, (meeting a woman, kids?, father, etc).
>> Current savings rate ~70%, no debt except mortgage. (savings rate counts recent store start up expenses as savings/investments.)
>> Both us moving a bit closer to work would be a waste (might save 5min each way tops), I see it as getting on the other side of the bridge or not, this is the main bottle neck and time suck when there is a backup. If I move I will get the bridge out of my daily drive.
I would consider it a dick move to sell the condo and kick my dad out or make him do my current commute (would actually be much worse direction for him to travel, 40+min most days) or make him find a place to rent.
So is it totally stupid to buy a second house near work, keeping the condo for my dad?
Would buy a house within 10min drive of the office, biking would be kick ass cool but even on the same side of the water given the bike unfriendly roads it is not a given that I could ride (yes COULD - there are some shit roads near the office I simply would never ride).
Some math:
--- Car costs ---
gas: 30mpg 20 miles each way
gas cost: 365day * 5/7 * 40miles * 1gal/30mil * 3.5 $/gal: 1200$/year
other: 1000$/year
driving costs: 1200 + 1000: 2200$/year, 15yr compounded: 60k
driving costs after move
gas cost: 365day * 5/7 * 10miles * 1gal/30mil * 3.5 $/gal: 300$/year
other: 500$/year
total driving: 800$/year, 15yr compounded: 20k
--- TIME SAVINGS ---
condo: 30min*2*365*5/7/60: 260 hr/year; this is a low bound as backups can easily double the time to get home.
post move: 5min*2*365*5/7/60: 43 hr/year
--- new second house ---
200k house: 20%, 40k down
15year @3.4%, 1135$/mon, 1300$/mon with tax/fees
total interest 44k$ over 15 years
utilities: 250$/mon: 80k after 15 years
Opportunity cost of new house
40k up front + 1300$/mon @7%, compounded for 15 years = 500k.
house appreciation: 200k @ 2% for 15 years: 330k
>>> Dollars after 15 years without buying a new house
gas: -60k
added market investments: +500k
>>> Dollars after 15 years with second house
gas: -20k
new home: 330k (@2% appreciation)
interest: 44k
utilities: 80k
Totaling it up:
500k - 60k: 440k not buying a second house
330k - 20k - 44k - 80k (house value - gas - interest on house - utilities): 186k
(taxes/insurance on second house were included in the not buying side)
440k - 186k: 254k
So at first it looks like I would be quarter million better off keeping the long commute.
But the second house can do some other things:
>> roommate: 800$/mon for first five years compounded to 15 years: 115k. renting longer would better this number, duh.
>> gym: currently pay for a gym 30$/mon. Any new house would get a garage gym (nonnegotiable). ~10k not biggest number and would be offset by equipment and heating/cooling garage some what but I really like working out at home. (wrt partly climate controlled garage - I am sure none of you would do this and it makes me a little girly man, your from Minnesota and twice the man I could ever be, I concede the point. I have health issues in the heat and if keeping my squat rack at 60f rather than 35f keeps me lifting all winter I will pay the gas bill 3 months.).
>> projects: am somewhat limited in what I am allowed to work on in the condo. ???$ +fun.
>> time: if I drive 250hr/year less and pay myself 5$/hr compounded up that is: 33k. I know mmm put this pay rate much higher but I wanted to keep it conservative.
>> over time: would be much easier to go in to work for 4hr on sat/sun without the long drive, no idea how to calculate this value. but is probably significant, and would be easier to work longer days during the week too.
>> on the down side I might take up a new hobby with the free time, this might cost money. +/-???
So in pure dollars I dont think buying a second house is 100% stupid. Selling the condo or renting it to paying tenants would have the highest ROI, but I am not sure I would do that to my dad. All this is not about maximizing net worth, the point is to live a good life.
I have not discussed this with dad, but he is aware I hate the long drive. With the store (and other things) there has not been a good time to bring this up. Any rent he may pay me would be identical in both cases so I did not include it. Me working in the store full time is 500% not on the table. He is in the store 6 or 7 days per week.
Is my math right? Do you see any options I missed? Finding a different job is probably the 'easiest' solution but I am not hopeful or really like that option. Probably would not do anything till after the new year or spring. Would there be any point to renting a room near work to see how I like it over there?
