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I posted a version of this on "Ask a Mustachian", but I thought I might get some more analytical responses over here.
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We live in a suburban/rural area and have about a 30 minute door-to-door commute to downtown. Our house is too big. Our yard is too big. We can’t get anywhere without getting on a 55mph road w/ no sidewalk.
We don’t hate our current place but we'd like to move into the city (we've lived there before) where we can have a tiny house, dump a car, bike/bus/scooter to work, have an actual neighborhood to walk around in, and age in place. It just seems more mustachian. BTW, I want the next move to be the last; we’re mid-40’s.
So do it, right? Well, we paid 165k for our current house in 2008. Then we paid down another 20k to refinance when the appraisal came in at 140k. Meanwhile, we’ve paid about 55k in improvements (siding, windows, roof, insulation, etc.). Current mortgage is 30yr @ 3.75%. Balance about 137K.
To buy or build in town would be somewhere between 200k to 250k, because real estate costs more in the city, and I’d like to build/remodel to a very efficient, ADA compliant house.
I'd love some help with how to think about the math. How do I calculate the size of the hit I’d take to buy or build in town? And how do I balance that hit against the desire to change our lifestyle?
Some more stats, if you’re interested:
Annual gross income: 117k
Annual spending: about 50k (working on it)
Current house sq ft: 2200
Target house sq ft: <=1000
IRA/401ks: 200k
Other liquid assets: 60k
Mortage payment with escrow: 776
Potential monthly rental reciept on current house: 1000
