My wife and I downgraded our apartment a couple years ago. It was the right decision for us at the time. She was thinking about quitting her job and it wasn't clear how much my small business was going to grow. Since then, she's decided to stay with her employer and my business has taken off. The result is that we currently pay roughly 9% of our take-home income in rent despite living in a super HCOL city. Great, right?
Not quite. Our apartment is nice overall, but it suffers from some substantial drawbacks. It's not the most convenient location. The kitchen is cramped and has no dishwasher (we have a baby, so there's a lot to wash). The washing machine breaks down regularly. The apartment is poorly insulated and can be uncomfortable in both the summer and winter, with window condensation that results in quite a bit of mold around the windows. It's also not well soundproofed and we sometimes wake the baby by walking down the hallway or using the bathroom. There isn't really any risk of burglary where we live, but the building itself is not very secure.
So we've decided to move to a nearby apartment in a much nicer building. Shorter commute (by a few minutes) for both of us, bigger kitchen, dishwasher, better washer/dryer unit, better soundproofing. Fantastic view. And they have 24-hour reception that can receive refrigerated packages, which is great for us as we both work full time and order groceries online. Without getting into every last detail, there are A LOT of conveniences and I estimate they'll add up to around 3-5 hours of extra freed-up time for us each week. I'll also have room for a better home office, which will likely let me come home earlier at least 1-2 days a week. The catch is that rent will increase to about 13.5% of our take-home.
Using last year as a baseline, the increased rent will decrease our savings rate from around 55% to around 50%. I've tried to think carefully through this and honestly analyze for myself whether this move will appreciably increase my quality of life, and I think the answer is yes. My wife thinks it will basically be a wash for her, but she's very supportive and says she's happy to make the move. Is it worth 5% of our annual savings? I think so.
One the other hand, I feel like I'm basically moving in the wrong direction. We should be lowering, not raising, our expenses.
On the third hand, it feels kind of silly and frustrating to work a 12-hour day (on a day like this I typically earn $2,000-$3,000), then bicycle for 30 minutes to get home, hand-wash all the dishes, and tiptoe through the apartment. We can afford to alleviate some of these inconveniences.
I've thought hard about the move and I think it makes sense. But the increase in cost does concern me and I'd value some input from other folks here. Does this seem reasonable to you? We're in our mid-30s, currently with about 30% of a massively fat FIRE saved. For the next five years or so, I want to go full-speed ahead on my business, so we're not looking to downscale in the immediate future.