Nicole Spector at MoneyLion wrote about five ways moving to a low cost-of-living area can end up costing more, a useful counterweight to the relocation trend that inflation and flat wages have accelerated. She asked me about the housing piece.
The cheaper market lets you buy a bigger house on a bigger lot, and that is where the surprise lives. Property taxes tend to be based on both value and lot size, so that bigger piece of property ends up costing more each year than the small house in the pricier location you left. A family that trades a $600,000 townhouse for a $400,000 home on two acres can find the annual tax bill went up, not down, and the insurance, utilities and upkeep on a larger property follow the same direction.
The article's other points are worth taking seriously too: longer commutes that cost time and fuel, fewer job options if the move does not work out, travel costs to see family, and services that are cheaper because there are fewer of them.
My framework for clients considering a move is to compare total annual cost of living for the specific house and the specific life, not the index for the metro area. Taxes on the actual parcel, insurance quotes on the actual house, the commute you will actually drive. The cost-of-living index says a region is 20% cheaper. Your budget is the only number that counts, and it is often less cheaper than the index promised.
Read the full article at MoneyLion →
