Our Geoarbitrage Plan To Lower Annual Living Expenses
When you read blogs or news articles about geoarbitrage, it’s almost always the childless couples that travel the world. They leveraging the lower cost living of regions like Southeast Asia, Central or South American, and even Eastern Europe.
These “nomads” will stay in a location for a couple of months, enjoying that locale to its fullest. Then, when their tourist visa is about to expire, they move on to the next location, or do a “visa run” to extend their stay in the country for a few months if they so desire.
You’ve probably heard this story countless times before, as it’s often repeated by bloggers. But what about the people with families?
The stories of expats with families are decidedly more rare, but they do exist.
My buddy Jim over at Route To Retire is moving to Panama in a couple months, and he’ll be bringing his daughter along with. They’ll be homeschooling her in Panama, and at least for the first year they won’t have a permanent visa. That means every 180 days they’ll need to leave Panama for 30 days (which explains why homeschooling is a good fit for Jim and his daughter).
Jim’s plan sounds great, and I’ve enjoyed following his blog, but is it for the Tako family?
Geoarbitrage To Cut Living Costs
I’ve written about our plan to move in the past, but we didn’t talk about it in the context of geoarbitrage. Long term, I think we need to cut costs from our current big-city life.
After looking at a few spots internationally (like Japan), we decided that international geoarbitrage won’t be in the cards for the Tako family. Why?
The most important reason is that we’d rather not be constantly on the move. We like having a stable home to call our own. The kind of lifestyle that Mrs. Tako and I enjoy requires a more dedicated residence — She likes to sew and garden, and I really enjoy building things. Those activities are extremely hard to engage in when you’re living out of a duffel-bag, waiting to catch your next flight.
The second reason is, we want a stable lifestyle for our kids. We prefer that they get a good education, and neither myself nor Mrs. Tako has any interest in home schooling. We did some soul-searching about this topic, and just decided that we’ll be a happier family if we don’t have to home school the kids.
While it is possible to find good English speaking private schools overseas, the cost is prohibitive.
So, does this mean Geoarbitrage is completely out of the picture? Not at all! We plan to cut costs using geoarbitrage by moving domestically.
As some of you readers already know, the Tako family lives in the Pacific Northwest. We don’t live far from Seattle. If you’ve never visited Seattle, the easiest way to describe it is like a slightly cheaper version of San Francisco that’s cold and rains all the time.
Yes, there’s tech companies everywhere here too — which means big salaries and even BIGGER prices to go along with those big salaries. Housing is crazy expensive, traffic is horrible, and the weather is terrible 9 months of the year. (The 3 months in summer are actually quite nice)
According to cost of living indexes, Seattle is the 12th most expensive city in the United Sates, and some websites even put it in the top 10.
If you can’t tell, we’re not terribly attached to the place! There’s a premium people pay to live in areas like this, and I’d rather not keep paying it for the rest of our lives. Our geoarbitrage plan is to move domestically — within the United States to cut living cost and ultimately improve our quality of life.
While tech-nerds working at Amazon or Microsoft might not mind staying indoors 9 months of the year, we’d like to be able to flip the weather equation around — 9 months of decent weather and 3 months of not-so-great weather.
Not only that, but if we move away from the expensive coastal cities, our housing expenses could be cut in half!
Lowering Housing Expenses
Like most families, housing is our single largest monthly expense. Every month we have a mortgage payment of $2,315, and that includes insurance and property taxes. According to Zillow estimates, our home could sell for $885,716.
I think Zillow’s estimates are a touch optimistic, so I usually estimate 90% of Zillow’s numbers. After paying off our mortgage ($279,142 remains) and paying real estate sale fees, we should have $494,692 in equity left.
Is this enough to buy a mortgage free home in cheaper regions of the United States? Or generate enough income for our rent?
You bet it is! There are plenty of cities in the United States that don’t have expensive home prices like we have in Seattle. In fact, there are at least 25 states where the median housing price is below $250,000. If we were to sell our home and move to one of those locations, we could easily cut our housing costs.
Not having a mortgage doesn’t mean our housing costs would drop to zero of course — there’s still property taxes, insurance, and home maintenance to consider. By my estimates (using potential cities we might move to), we should be able to cut our housing expenses to around $1,000/month. That would free up a ton of cash!
Where Are We Moving?
Where we plan to move is the biggest question we haven’t answered yet. And it’s a hard question to answer.
Since we began our financial independence journey in 2015, we’ve been hunting for new places to live. Every summer when the kids get out of school, we pack our bags and hit the road to check out different towns and cities we’re interested in.
Two years ago, we toured small college towns around Washington and Oregon. Places like Eugene, OR and Walla Walla, WA scored a lot of points on our criteria. We really enjoy the cute small town feel in those places. Sadly, the weather is only marginally better in both locations.
Moving further afield, last spring we traveled to Texas to visit our friends, and found out we enjoyed the state… but everyone tells us the summers are just ridiculously hot. That’s definitely something we’re not used to — we don’t even have air conditioning here in the Seattle area!
Property taxes in Texas are definitely on the high side (around 2% of assessed value), which makes it a more expensive location to live and buy a house. No state income tax though, that’s a plus. I think we need to do a follow-up visit Texas to see more of the state, and also to see what those super hot summers are like.
Another low cost state that comes up in my searches is Idaho. In a small Idaho city like Boise, you can buy a nice family home for $400k, and pay very affordable property tax rates of 0.56%. Factoring in some very reasonable state income taxes, southern Idaho seems like a good option. The climate is much drier too.
Florida is another state on our list of States we need to visit. With plenty of sunshine, no state income taxes and reasonable property taxes (around 1%) Florida could be a good location to move to… but there’s the regular Hurricanes and climate change issues to contend with.
No place is perfect I guess.
Obviously the main goal of a geoarbitrage plan is to lower expenses, but we also want to lead healthy lives after our move. Living healthy is a HUGE issue in the United States. One of the biggest causes of poor health is obesity. Oddly enough, higher obesity levels seem to correlate with a lower cost of living.
That’s a little scary to me, because it implies cheaper places are less healthy places to live. Maybe I’m just overthinking things though, there are fat people and skinny people everywhere.
My personal belief is that you adopt some of the local culture when you move to a place. Food culture AND exercise culture. If the place you move is really famous for cheeseburgers and the people take pride in a cheeseburger making culture, you’re bound to eat a few extra cheeseburgers living there.
Likewise, if everyone bikes to work, you’re more likely to bike yourself. All this cultural mimicry isn’t set in stone of course, we do have free will, but it’s hard to say ‘no’ when an unhealthy culture is so pervasive.
I think it’s important to remember that poor health is a hidden cost that doesn’t show up in cost of living studies. If your sick all the time or in a hospital, trying to save a couple thousand dollars annually on cost of living doesn’t make a lot of sense.
Then, There’s Everything Else
Obviously I’ve done plenty of Google searching on potential places to move, and we’ve looked at all of the cost of living studies. But all the Google searching in the world can’t tell you the vibe of a place. There’s a TON of really important things you can only understand by traveling to a place:
- Ethnic Diversity
- Local culture
- Quality of the local library
- Good quality grocery stores
- Things to do outside for families (hiking, biking, camping, kayaking, nice parks, pools, etc)
- Walking / Bike friendliness (sidewalks, bike lanes, etc)
- Parking availability/cost.
- Crime/Homelessness/Gangs/Illegal drug problems
Ultimately, we’ve decided to keep traveling for a couple more years before we make the big decision. In total, we’ve visited 20 different U.S. states and I think I’m starting to get a feel for this place called the United States.
It might not be the cheapest place in the world, but it’s not absolutely necessary to live overseas to experience a Financially Independent lifestyle! You can cut costs here at home too!
As long as you stay away from the big coastal cities, living in US can be quite affordable. Housing is cheaper away from the coast, groceries are slightly cheaper, and the traffic is far less crazy. Quality of life really does vary dramatically from city to city, and the prices can vary even more. This is why we’re taking our time to really looking around.
So, we’re going to put our international travels on hold for awhile and keep looking domestically! If you have suggestions, please put them in the comments below!
[Image Credit: Flickr]
79 thoughts on “Our Geoarbitrage Plan To Lower Annual Living Expenses”
This is so cool! Looking forward to see where you decide to go! I think we will move to Texas after we become FI, but aren’t 100% sure either. The lack of SALT there is pretty awesome considering we pay ~10% in NYC.
Thanks Olivia! They may not have a state and local tax, but you definitely pay it in some of the most expensive property taxes I’ve ever seen.
Good analysis and we have thought of a lot of the same issues in our quest for perfection 🙂
We have mostly ruled out living abroad in somewhere like Mexico while our 3 kids are in the house. I don’t have much passion to home school our kids and our kids always refuse suggestions that we home school them (totally independent of the idea of moving abroad, which might also get a similar resistance from the kids). So it would be a likely pricey, probably lower quality education scenario for our kids, albeit with a nice foreign language immersion component to it.
Private school tuition would eat all of our geoarbitrage cost savings. Weather is near perfect in places like Mexico City but we would have to get out of the city because air pollution is so bad (pretty risky for long term exposure most likely).
Perhaps some day we would do an overseas geoarbitrage deal. And again, Mexico seems like a clear winner given proximity to the US, decent standard of living in many of the cities.
So for now we are staying put and getting a “free” high quality education in North Carolina. The weather is just okay. I’m not sure if we qualify as having 9 months of great weather like you seek but it’s a nice mid-point between cold long winters in the north and the raging hot humid summers typical in the south. We usually travel during the summer when it’s gross outside and it’s really only bitterly cold (below 32F 🙂 ) during the nights and maybe a combined total of 20 days during the winter. On those days where it’s in the 40’s and 50’s (or 70’s!!) in the middle of winter we’re still able to get outside and do fun things and be relatively comfortable with appropriate clothing.
Yeah, once the kids leave the house we might try the international thing again. I heard Costa Rica is nice, as well as Thailand.
I’ll keep North Carolina in mind. I’ve heard good things about it from you and a couple other folks! 🙂
As you know I have plenty of posts that dive into these various issues and map them out individually. Good luck in your search 🙂
Thanks Dave, have definitely used your site (and others) before! As I mentioned in the post, we’re looking at “soft” factors that really require traveling to a location.
If you’re thinking Florida, I highly recommend the St. Petersburg area by Tampa Bay. The gulf side is warmer than the Atlantic and the beaches are some of the best in the nation.
Great tip! Thanks ThinkingAhead!
Hmmmm. Well, if you think it’s hot in Texas…
I think you should put Arizona and New Mexico on the list. They’re both really nice and give you the 9 months of nice weather you’ll need.
Do a lot of diligence on Florida before you put it on a short list. A LOT.
If you’re thinking Texas, Fort Worth would be my top recommendation to evaluate – I’ve never lived in the city proper, but everyone I know who has loves it. Austin is lovely, but it’s getting crowded and expensive (for Texas). The summers are indeed brutal – to the point that when we’re free agents the missus and I are planning on not being around for them. But having Texas as a base and then escaping for the summer isn’t the worst plan in the world so we might try it. If you guys head to DFW let us know – it would be great to meet the man behind the mask 🙂
Hi Paul! There’s a few places in Arizona that seem pretty good to me. I didn’t mention them in the post, but we’re definitely looking there too.
What’s the deal with Florida? You seem to indicate some insight about the state.
Texas is pretty high on our list. As far as the DFW goes, we’ll probably swing by during the summer sometime to check it out. See you then?
Yes, northern Arizona can be really nice. The southern bit gets a little toasty, but it’s a great state for outdoor lovers.
Re: Florida – no comment. “If you can’t say anything nice…”
Let me know once your DFW plans start to coalesce – we’ll look forward to it.
Hard to pick a spot when you don’t have outside reasons deciding for you because there are just so many options. We’re pretty rooted to this area due to family, but we look at real estate and wonder what it would be like to live in basically every place we ever visit. Fun fact: Housing is cheaper on the Big Island of Hawaii than it is here.
We do have family in the area, but with frequent plane flights it isn’t too hard to visit.
It’s interesting that Big Island houses are now cheaper. We love Hawaii, but it’s just soo expensive. We’d rather live without a mortgage than with one, so Hawaii probably isn’t an option. 🙁
I have no idea. My ideal spot would be in Santa Barbara, CA, but that’s quite expensive. Hawaii is nice too.
Please, check out Florida and report back.
Will do! 🙂
There are inexpensive cities not far from Santa Barbara, nice quiet little whole in the wall cities, for a lot less. I love it here.
Hi Mr. Tako
This is a very interesting topic. Lucky you that US is huge enough and can offer to you plenty of options concerning weather and cost of living. The only place that I have visited in US is Texas, Houston area. The region was very nice, clean and with beautiful houses.
Here in Odysseus household we have the same issue about geoarbitrage. We do not see ourselves going back to our home country and we do not have decided where we want to settle down in the future. After have lived in 3 countries during the past years we decided that it is not sustainable for the kids, so when the eldest reach 12/13 years we’ll stop moving around and they can have a stable teenage period.
I liked the list you did about the topics to consider and I’ll keep it to be used in the future. For us the biggest concern is to land in a country that offers a good and free education to the kids prior to the University. Let’s see….I still have a couple of years ahead.
Good luck with the city picking!
We did a similar search and picked Davidson, North Carolina. Obviously, we were heavily influenced by the fact that my sister lives 10 minutes away, but this is a nice place to live. GREAT public schools, awesome town, lots of parks and greenways for walking and hiking. The cost of housing is a bit higher, but if you took your time, you could find a nice house for around $400K. The weather is good, not great. Colder, wetter (but short!) winters, hot summers (but not terrible). But Spring (March-May) is heavenly! And it’s a college town, so tons of low-cost and free community events to engage in.
Thanks for the tip Laurie! Lots of people have nice things to say about NC! I’ll check out Davidson!
Also recommend DFW area. Summer is hot but not as humid as Houston area. Public education is great. A large group of Asian population and variety of nice Asian grocery stores. Two airports makes travel very easy and relatively cheap. Direct flight to a lot of Asian countries. Economy is booming is DFW area.
We’ve heard lots of good things about the DFW area. It’s definitely a place we need to examine more closely!
I would also recommend North Dallas area for the same reasons and more.
Thanks Tammy! Lots of people recommending DFW!
Another +1 for DFW. We find it very family friendly, and diverse, with plenty of jobs.
This is exciting – I can’t wait to hear what you come up with! If you move to the Austin, TX area we can hang out during the times we come back to the States. Wait, that might make you bail on the whole Texas thing… pretend I didn’t say that! 😉
And thanks for the shout-out, brother – much appreciated!
No problem! Thanks for writing such a great blog Jim!
Having been to Boise a number of times for business I have to say I really like the city. It has a smaller city charm and traffic isn’t crazy.
I lived there one summer. It’s a pretty nice town!
Have you looked into Lake Tahoe, CA (Tanja Hester of OurNextLife) or Longmont, CO (Pete Adney of MrMoneyMustache)?
I have “outdoorsy type” relatives who live in Klamath Falls, OR; Incline Village, NV; and Little Rock, AK who all seem to love and enjoy their locales.
As for Florida, take a look at the sinkhole map before choosing where to live in that state. As for Texas, I remember Houston being unbelievably humid the summer day we stopped there to visit the Space Center. As you’ve discovered, although other Texas taxes are low, the property tax in HIGH.
One of the things I’ve noticed during our domestic cross country travels is that many other places do not have the diversity, open mindedness, or “live and let live” attitude I take for granted living in the greater Southern California area. This is something that always bothered me when visiting relatives in the Indianapolis, IN area.
California and Oregon are probably a little too expensive for our budget, but CO might still be an option.
I’m not familiar with Incline Village NV though. I’ll have to check that one out.
Thanks for the ideas KAT1809!
We live in the Seattle area ourselves and own our home, and like you are definitely planning on selling when we FIRE in 4-5 years. We have already purchased acreage in southwest WA and will be building a basic home there. The weather is obviously similar to Seattle, but we don’t mind that, as we plan on traveling 6ish months per year. We’ll have really reasonable property taxes (part of the property has a timber classification), WA has no income tax, lots of good hospitals and medical care (and affordable medical insurance), and we’ll be 2.5hrs from Seattle and 1.5hrs from Portland.
That must be in the Centralia/Chehalis area you’re talking about. I know that area well.
I live in Orlando, FL on the UCF side of town. Here’s my opinion on the area.
1. No state income tax on earned income. I don’t file a state tax return even for investment income.
2. Fairly low property taxes. Last years was about $1800 for a ~$240K house.
3. Orange county has a really good library system.
4. Seminole county to the north has a good public school system for Florida.
5. As a FL resident, you can get annual passes to major theme parks which make going to theme parks every weekend affordable even though you probably wouldn’t want to go during the summer months.
6. Orlando Science Center is good for families with young children. It’s all indoors which is good during summer vacation.
7. Sizeable ethnic communities (Hispanic and Vietnamese) means that there are there is a decent ethnic/authentic restaurant scene.
8. Beaches within driving range both to East and West.
9. Far enough inland that bad hurricanes are down to Category 1 by the time they hit us.
1. Prices are rapidly rising.
2. Traffic is bad during rush hour.
3. Lots of highway construction/expansion projects.
4. Hot and humid during the summer.
5. Most of the highways are toll roads, so frequent use can add up.
Thanks for all the info on Florida Keith! Opinions seem to vary greatly on Florida, so it’s good to get input from someone that actually lives there! Thanks! 🙂
Orlando could be a good option for us.
My wife is East Asian in decent like yours and I also have a mixed race child so take that into consideration. Avoiding bullies having tolerance for diversity is important too and many of the cheaper places to live are lacking these qualities.
In the end it’s all one big trade off.
For us we are moving back to Bangkok, Thailand. Healthcare and housing are cheap but international schooling is expensive. Weather is hot but no winters to deal with.
Trade offs again.
Yep, it’s all tradeoffs! Thanks Mike!
Hello Mr Tako,
you should consider Montreal in Canada. 3 nice months in the summer, 5 months of winter with extreme cold and a lot of snow. Terrible road conditions and a lot of traffic everywhere. Add a marginal tax rate of 53%, 15% sales taxes and 1% tax on your house every year.
Uh…. how to say this….
Montreal doesn’t sound like a big improvement over where we are today! 😉
I liked the landscape of Idaho and also liked Boise & Coeur d’Alene. However, Idaho winters are brutal & it is not very ethnically diverse. Idaho also has a reputation for harboring white supremacists and anti-government gun nuts. There are a lot of “off-the-grid” loonies there.
I was going to put off moving until after I retire. Take a few years to visit various locations. I am seriously considering splitting time between multiple locations. Say Las Vegas (no state income tax; short drive to LA & San Diego & flights to Asia) for the winter & somewhere else for the summer. Pick a low tax state as my primary residence for tax purposes and then travel or live in another state as my secondary residence.
The winters in Southern Idaho aren’t that bad. I’ve been there in the winter. But ethnic diversity is a challenge for any state that isn’t on the coast.
We’ve got family in Las Vegas, but I’m not sure that’s a good environment for kids (prevalent gambling, drinking, prostitution, etc). I’m sure there’s some good suburbs though.
You should check out Fayetteville, Ark. we raised our kids in SF Bay Area but kids went out of state for college. My son graduated and is living there because he loves it. Great weather, Ozark mountains and a college town help make it a healthier more inclusive area. Good luck with your search!
That’s awesome country around Fayetteville for sure. Also sure diverse due to the large university there. There is also one town in South Arkansas where every high school grad gets five years free college tuition and fees they can use anywhere in the US, courtesy of a local oil company. One reason I didn’t pay a cent to send my kids through college.
Thanks for the tip Angela. I’ll look up Fayetteville!
Have you considered Hampton Roads? It is actually seven cities smushed together: Hampton, Virginia Beach, Suffolk, Newport News, Chesapeake, Portsmouth and Williamsburg. Not bike friendly, but generally a low cost of living. The libraries vary from location to location. There is a decent variety of outdoor activities. It is pretty diverse due to it being a huge military community.
I’d never heard of Hampton Roads, but it sounds interesting. Thanks for the tip Tyler!
We live in the burbs of Portland. There are so many things I love about living here, summers especially, but the long, sunless winters are really hard on my husband. We don’t have plans to FIRE, but finding a place that has nicer weather and cheaper cost of living would be great for our budget and retiring sooner. But that also goes hand in hand with fewer job opportunities and potentially fewer options when it comes to healthcare and schools. I tend to look up weather data (how many sunny days) and research housing costs on Zillow when I look up a place as well as do a cursory job search. The closest places we’ve found to being wowed with a place are Bend (beautiful spring and falls but hot summers and cold winters + expensive housing costs) and Ashland, Oregon (such a fun and funky town, but far from so many things + very expensive in the city itself). We’re thinking of checking out Coeur d’Alene, my husband has read that the winter weather there is a little milder. Would love to hear your take on other places as you check them out!
Ashland, OR was one of the places we visited. Great town, we really loved it! But housing prices were WAY too expensive for such a remote town. Almost like the entire town is a tourist trap.
Bend was great too, I used to live there! I didn’t like the winters, but the other 9 months of the year were great! Unfortunately housing prices just went insane starting around 2005 or so. It’s a resort town now, where the rich go to play (in my opinion). Couple that with Oregon income tax, remoteness, and high prices on everything else and I think we’re priced-out of Bend.
Coeur d’Alene gets quite a bit of sun in the summer, but also a lot of snow (in my experience). Snow is not something I’m looking for, but maybe it’s a good fit for you!
If you like Asheville (definitely a tourist trap), check out Medford and Jacksonville right down the road. Oregon is, as you point out, a high tax state.
One of the things I got lucky with is where I ended up living. I live in the southeast and it has great weather and lower cost of living than where I used to live in Ohio.
Good luck finding the area that checks most of your wish list.
Hi Xrayvsn! Where abouts in the SE? Lots of people say NC is nice, but I haven’t visited enough of the SE to really form a strong opinion.
I will send you a direct message as I’m still trying to be a bit anonymous blogging and I’m not sure if giving my state will make it easy to figure it out 🙂
Toronto, Ontario Canada! Warmer than Montreal, less snow, USD worth more than Canadian dollars, so housing is a bit of money, but your USD will offset, very diverse city, food scene, 50% I think of people not born in Canada, being mixed race couple with mixed race child very comfortable here. 9 months of not great weather perhaps not so great, Firecracker and Wanderer hail from here!
Thanks Tigermom! We love Canada, but just not the snow and ice! 🙂
Great post Mr. Tako, you’ve really been thinking this through. I absolutely agree geoarbitrage is possible in the US and I’m looking forward to hearing what you learn in your future travels if you decide to write about them. We live in Ventura County, the dark red county next to LA county. I’d readily move to reduce expenses, but my wife is more circumspect. The weather is great here (outside Hawaii, I’m not sure you can do much better in the US), but the price of everything is very high. Maybe you’ll discover something I can use to convince my wife the financial benefits outweigh the weather here. Good luck!
I’ll add that I have a good friend who moved to Charleston, SC, two years ago and loves it. He moved from the Alta Dena area of Los Angeles with the express goal of reducing expenses. I’ve heard good things about Charleston from other people too, but we haven’t had the chance to visit yet.
Have you checked out Astoria, OR area? Or Long Beach peninsula if you wanted to have no state tax. Astoria has a nice small town feel to it with lots to do outdoors. I think the “sunless winters” bantered about is a bit overblown as the sun comes out quite frequently in the off months but it just doesn’t last all day. It never gets too hot in the summers either averaging around 65 deg. and topping out a few days out of the year in the 80’s. Housing prices are quite reasonable as well about in line with national median. And it’s a coastal city! I mean town 😉
Yes, we’ve been to both Astoria and Long Beach pretty extensively. Probably a bit too cold and wet for our tastes, but really enjoy the small beach-side town feel. Like something out of a Steven King novel.
Well said! 🙂
How about squirm ,Washington , in your back yard. 300 days of sun, almost no snow,in the Olympic rain shadow. Housing prices are still relatively inexpensive. Oh ya, no hurricanes,no humidity,no big time flooding, no incredible hot months,lots of outdoor recreation,hiking,camping,golfing,beaches,small town ,very little traffic,growing area ( lots of retirees ). Only downside is distance from major airports and distance away from cultural events ( about 2-2 1/2 hours to Seattle via road and ferry ). Hard to beat area right inuYour backyard.
I love being retired in Houston. My home on the outskirts of town was purchased in 2002 for 97k. It is arguably worth about 120k now. Very cheap compared to Seattle.
I sold my house and moved 15Kms away. I’m still in the same city and still work at the same school – obviously my commute is much longer now- but I freed up a ton of equity and was able to put it to work.
I say go for it!
We live abroad (Indonesia) but are always thinking about where we could live if/when we move back to the States…we love Colorado, but yeah, so does everybody else, and we’re still looking for the perfect town that is affordable. Will be checking back to see if you find it. 🙂
Consider Chattanooga, TN or Huntsville, AL. Great weather, except right now due to flooding. Lots of outdoor activities in beautiful areas. Good schools. Compared to where you live it’s practically free. Come visit and check it out.
I think that you’re right that there are sometimes costs to cheaper places. We live in Toronto, which has freakishly expensive housing at the moment. We thought of moving at one point, but there were a lot of negatives to doing so. We enjoy living car free in a neighborhood with a 97 walk score, steps from good public schools, libraries, community centres, parks, beaches, skating arenas, grocery stores, museums…you name it. Which means that we do walk, bike & TTC everywhere, and are in way better shape for it. And we like that Toronto is still very diverse, though housing costs have been unfortunately hard on that recently.
Also, we discovered that all in net costs is sometimes waaay different than the headline number. For example, that same freakishly expensive housing market means that we can get great tennants for our basement apartment, which helps to offset the higher housing costs & as a bonus, take care of the cat when we are out of town (we discovered that unlike Toronto, renting basements wasn’t popular in the smaller city that we had been looking at). And good public schools & healthcare (which varies even within Ontario) positively impact that net line too.
There are always downsides of course to every place (big city crowds, for example), so for what it’s worth, might be good to start with what is important to your family…what are all the things you spend your time on and/or would wind up spending money on if it was/wasn’t there in your community?
Come to NC! $400K will go along way here. 🙂
Check out Reno NV or Incline Village NV. Reno doesn’t get nearly as much snow and has milder weather than Boise. I’ve lived in many of the places mentioned in the comments, including FL. I miss FL at times (mostly the beachy areas – yes St. Pete is great!) but was so tired of the humidity, heat and bugs. Reno doesn’t have any of it and Lake Tahoe is in our backyard. Its a great place to raise a family.
Lots of people talk about Asheville, NC and Charlottesville, VA. Charlottesville (directly around UVA) might be over your price range but surrounding areas are probably affordable. My father retired to the Charlottesville area for the culture, events, health care, and natural beauty but getting to experience 4 seasons (with winter being the short one). Can’t wait to hear what you decide.
Great article. We went through this drill when I retired from the military in 2013. 2 small kids and portable income from consulting (I have since retired). I built a spreadsheet (cause I’m that guy) of most desirable criteria (some weighted) of what we wanted in a location. Taxes and cost of living, education quality, weather, healthcare access (military), and small town feel were some of the more important for us. Of note, we were in Texas (San Antonio) and didn’t want to stay, its not the heat…its the humidity…and the double digit population growth.
What we found out in the process is that we are mountain west people. We decided on Rapid City, SD. I know, South Dakota – frozen north right? Not really. Its a lot like front range CO, without all the people.
Others on our “Short List”:
Albuquerque, NM – crime issues and infrastructure (tax base) problems
Colorado Springs, CO – Cost of living, taxes and too many people!
Salt Lake City, UT – a finalist, but we are not LDS and when I was in grad school there we found it could be isolating to not be LDS, especially with kids. Plus traffic…
Reno, NV – another contender but we didn’t like the schools “as much”…
Sierra Vista, AZ – a little too far off the beaten path, schools were an issue and…well that’s it. We still own a house there and may go back when the kids are grown. Its not Phoenix weather, its at elevation so it’s never too hot or too cold.
We found there are many lovely areas in this great country, these are just the ones we liked best…
A final note on Texas – Texas has 5 climate zones. Dallas is not Houston, and San Antonio is not El Paso. Texas is basically its own country, as any Texan will tell you!
Hi Mr. Tako!
Just came across your blog today! It was your trip report on Okinawa that brought me here actually. We are planning a trip there (and other parts of Japan) for a month later this year!.
This post resonated with me quite a lot. After being nomads for just a little over two years we settled on our ‘ permanent home’. We just recently bought a house in NC (closer to the coast). We are both from the north, so our plan is to head up there to escape the hot and humid summers that the area is known for. My husband cannot stand high humidity (I don’t mind it too much), so this works well with the kids’ school schedule (once they are in school). Other areas we considered were: Florida (Sarasota/St. Pete’s area), Boise, ID, Baltimore, Raleigh/Durham/Research Triangle area, and Charleston, SC. Happy to answer any questions if you want to hear more about our experience.
Looking forward to following along on your journey!
I lived in an RV for 3 years traveling to find my new homebase, check these out:
– Flagstaff, AZ – much cooler than Phoenix
– Spearfish, SD – like a cheaper, quainter front-range
I loathe DFW. Lived there for 20 years (against my will).
I decided on a small town in the foothills near Denver. We lucked out in finding a house with a perfect guesthouse for an Airbnb that made it a no-brainer.
I would put Nashville TN on the list. Low taxes, no hurricanes and little snow. Lots of places to Hike and great music!
Taxes, especially RE, are important in retirement, but I’d also look at health insurance- a state with a robust ACA plan and generous Medicaid expansion would seem more amenable to ER. I’d take a state with high income taxes and better healthcare over one with lower taxes (RE excepted) and fewer amenities.
I’d agree NM and AZ, especially since NM is looking at letting people buy into Medicaid, which is the best insurance there is. Nevada is really affordable and RE is cheap with lower property taxes than TX. It has some nice mountains where you can escape the heat, too.
Oh man. Texas. Enjoyed living there for years but the weather is a whole other beast. Make sure you thoroughly experience the summer portfolio, meaning early summer (mid-March through May) summer summer (or as I like to call it, hell) from May to mid-Sept and late summer, generally from mid-September through sometime in late October or early November. Note that due to ridiculous humidity, that whole summer phenomenon that you might be familiar with from the PNW whereby you can step into some shade to experience a bit of relief on a hot day doesn’t really work in Texas. If you do move there I suppose I’ll look forward to running into you when you decide to move to Colorado 2 years later like every other Texan dreams of doing (apparently, anyway; I keep running into ex-Texans in Denver). As an aside, one of my good friends who still lives in Austin experiences an interesting variety of Seasonal Affective Disorder from hiding out inside for three months out of every year. For summer-summer you will save money if you hang onto your collection of sweaters (which if you live in Seattle I’m sure is impressive) b/c every indoor space in the state gets cooled to about 60 degrees, which makes for quite the interesting temperature swing every time you walk into a building. About 10 minutes after walking inside in mid-july you’ll be reaching for something with long sleeves and some bulk to it. However, depending on the size of your Lone Star abode, you can go ahead and triple that cute little $150 utility bill.
LOL! Super funny comment Mike, but also useful! We’ll be checking out ‘summer’ in the south soon. Thanks for the tips.
We’ve lived in several small cities and college towns throughout the US in the last 7 years:
-Charlottesville, VA Great college town with lots of free activities and history
-Winston-Salem, NC nice middle size city, but I didn’t think it was very bike/walking friendly
Boone, NC Cool small town nestled in the mountains
-Bentonville, AR (home of Walmart. Crazy low COL with thousands of six figure salaries crammed in to a small 50K person town means they have a lot of great free activities like hundreds of miles of greenways, one of the best free art museums in the US, and one of the best children’s museums I’ve ever gone to; high state income tax, though)
Roanoke, VA – This is our current city and we love it. Great greenway system, recently voted mountain biking capital of the east coast, and it’s got some wonderful 125 year old fully updated mansions that go for $300K. Also, you can’t beat those blue ridge mountains views.
You definitely need to head out to the southeast; you’ll be pleasantly surprised at some of the small towns.
For a native Californian and Massachusettsan, the transition to life in North Carolina has been a mixed bag. This is a beautiful state and we love the low cost of living. However, after 16 years, we still don’t fit in socially. We’ve lived abroad and in New York and this is the first and only place where we haven’t found community. In North Carolina, we’ve lived in three different areas over the years and are still surprised by the lack of diversity. Definitely check this state out, but spend significant time before committing!