This post may contain affiliate links. Please read our disclosure for more information.
Do you live in a high-cost city or state? Are you geo-curious?*
Anyone familiar with this blog knows I’m a big fan of geoarbitrage. In 2006, Mrs. Groovy and I left high-cost Long Island for low-cost Charlotte, North Carolina. It was the best move we ever made. In one fell swoop, we dramatically changed the trajectory of our financial fortunes for the better. Instead of limping along, struggling to make sure our income kept pace with our ever increasing bills, we suddenly found ourselves with a monstrous chasm between our income and expenses. From the time we arrived in Charlotte to the day we retired—October 14, 2016—we easily saved 55-60% of our gross household income ever year.
The biggest reason for our “monstrous chasm” had to be housing. The cost of housing in Charlotte is easily half that of Long Island.
In 2007, Mrs. Groovy and I bought our current home for $225K. Today it’s worth around $240-$245K. Put our home in a town of equal stature on Long Island and I’d be shocked if its resale value were less than $500K.
But wait, it gets better. Not only is the cost of buying a home in Charlotte much cheaper than buying one on Long Island, the cost of operating a home is much cheaper as well. Here are the average monthly costs of our fixed operating expenses through the end of November (fixed in the sense that they can’t be avoided or put off).
| Expense | Monthly Cost |
|---|---|
| Electricity | $112.00 |
| Gas | $62.13 |
| HOA | $142.00 |
| HVAC Service Contract | $15.09 |
| Insurance | $48.64 |
| Mortgage | NA |
| Property Taxes | $171.94 |
| Water/Sewer | $51.37 |
| Total | $603.17 |
Knowledge Is Power
I went through this exercise of documenting my housing costs to help the geo-curious. People living in New York, Boston, San Francisco, and other high-cost cities are well aware that there are cheaper places to live.
But how cheaper are these other places? Are they cheap enough to make a drastic move worthwhile? Will they allow one to dramatically increase the gap between one’s income and expenses?
Geoarbitrage worked fabulously for Mrs. Groovy and me. But this doesn’t mean it’s right for everyone in a high-cost city or state. The only way to tell, of course, is to be armed with real numbers.
With that in mind, then, here are the real costs of home ownership in Charlotte.
- For $250-$300K, you can get a very nice 2000-2500 sq ft home in a very nice Charlotte neighborhood or suburb.
- Salaries in Charlotte are roughly two-thirds the salaries in New York City or Long Island. If you make $100K on Long Island, you’ll make around $67K in Charlotte—providing, of course, you get a job in the same field.
- If you put 10% down ($25-$30K) on a nice home in Charlotte, your monthly mortgage payment will be between $1,048 and $1,258.
- If you put 20% down ($50-$60K), your monthly mortgage payment will be between $932 and $1,118.
- If you put 50% down ($125-$150K), your monthly mortgage payment will be between $582 and $699.
- Monthly fixed-operating costs for a nice home (mortgage excluded) will run between $450 and $650. In most cases, it will be toward the lower end of this range. And this is because most detached, single-family homes in Charlotte don’t come with an HOA. Our house is very weird in that regard.
Final Thoughts
Okay, groovy freedomist, are you geo-curious? If you are, how do the housing costs in Charlotte compare to the housing costs in your area? Are Charlotte’s lower? And if so, are they low enough to compensate for Charlotte’s lower salaries? Let me know when you have a chance. I’d love to know just how attractive Charlotte is when it comes to geoarbitrage.
Oh, and I almost forgot. Great news. I finally got off my arse and picked up some garbage. Here’s another episode of Talking Trash.
Have a great weekend. Grease for peace.
* Geo-curious is my shorthand for anyone who is interested in geoarbitrage.
Huh. In New England, we spend money on taxes and homes like it is going out of fashion. Certainly in MA, we do.
But in NH, we got ourselves a nice 2300 sq foot mountain view home on 2 acres for $300K. We have a nearby park that is the White Mountains forest area where we get to roam on 751,000 acres for free. Real Estate taxes on our home are $2200 per year. We don’t pay water/sewer as we have a septic tank and a water well. Not one of those wooden things where you haul a bucket up with splashing water. You know what I mean. No air-con either. Just the hot-air of Mr. PIE to deal with.
Not too shabby, eh?
Heating costs, you WIN. It’s bloody cold in a NH winter and we do have to turn the thermostat up ocsassionally. However, I will take up the challenge. The PIE family will be investing in some of those heavy down suits you see mountaineers on Everest wearing. When the authorities throw me in the slammer for neglect of my family by forcing them to live/sleep/eat in Arctic sub-zero temperatures, I will point my lawyer towards this blogger (I said blogger, not bugger) in Charlotte for making me do it.
How are legal fees down your way…??!!
LOL! Oh, god. Mrs. G has been bugging me to start an LLC. And I keep shooting down the idea because I can’t fathom a situation in which our blogging would ever lead to a lawsuit. Now I know better. A blog post bragging about low housing costs in Charlotte, NC + cold New Hampshire winters + a mildly disturbed resident of New Hampshire = legal troubles for a little ol’ country blogger in NC. You got very dastardly mind sitting in your skull, my friend. And I love it! Good luck with this year’s winter. I’ll have a lawyer on retainer should a lawsuit arrive on a cold New Hampshire wind or a very weary moose.
HEY! We did exactly that, moving from CT to Durham NC last year. Welcome, fellow New Englander turned Southerner!
And oh yeah, the lower cost of living was a HUGE part of that decision making process. No way in H-E-double-hockeysticks could we afford a house similar to what we got here–especially when you consider the taxes and heating costs in North Haven/Western CT. We should totally be friends IRL.
P.S. We have got to stop telling people about this secret, though. The traffic in the Triangle is getting ridiculous, and we want to get into rental RE before the prices get out of an affordable range. 🙁
“We have got to stop telling people about this secret, though. The traffic in the Triangle is getting ridiculous, and we want to get into rental RE before the prices get out of an affordable range.”
Haha! Nailed it BE. My family lives in Wake Forest and they’re complaining about the traffic too. I love northeasterners who are fed up with cold and taxes and want to escape. But can’t they escape to Alabama or Mississippi? Does NC always have to be their refuge? Thanks for stopping by, BE. Oh, I almost forgot, do you happen to know any great keto dessert recipes?
That’s the answer! I’m gonna start talking up Alabama to all my friends still up North and expound on the traffic and rising prices here… muaahahaha… After y’all move up to Raleigh I would love a meetup!
I’m a big fan of “n-ice cream” which is based on blended frozen bananas: http://www.budgetepicurean.com/less-than-5/chunky-monkey-ice-cream/ of course chia pudding: http://www.budgetepicurean.com/vegan/chocolate-chia-pudding/ and wow I forgot about meringues: http://www.budgetepicurean.com/dessert/minty-vanilla-meringues/ These would be perfect on my current diet, I might have to make some haha
Hey Mr. Groovy! I live in Miami, where the situation is…interesting. FL has no state income tax and the sales tax is a “standard” 7%. My water and power bills are similar to yours.
However, housing itself is expensive AF (though it’s not as bad as NYC or San Francisco). In just insurance, I pay about $4,200 per year and well more than that in property tax. Plus, we had to spend a lot of money to make our house hurricane proof.
That said, I love the city. So, unless another steals my heart, I’ll keep running on the hamster wheel in order to pay for it.
I like Miami. I’ve been down there a few times and my niece may be moving there in a couple of years (her husband is a currently doing his residency in Tuscon). But I had no idea living in a hurricane prone area elevated insurance costs so much. Yikes! Hey, the next time I’m down there we’ll have to do lunch at the 11th Street Diner. Thanks for stopping by, my friend.
Sure thing, let me know when you come down!
hahahahahaha
This 0.13 acre empty lot is for sale in my neighborhood for over $500,000. https://www.redfin.com/VA/Arlington/20th-St-S-Unknown/home/22678224
I love this area, but it is not a place I can afford to live forever.
No, Matt. You can’t leave. Someone has to stay up there and keep the Rethuglicans in line. Haha! Keep giving them hell, my friend. And the next time I’m rolling through your area on the way to New York, we got to get together. The beers are on me. But if I pick up the bar tab, you got to do an episode of Talking Trash. Deal? Let me know what you think when you get a chance. Cheers.
You’ve got yourself a deal, my friend.
Where was this deal??? Beer is involved? I want in…
We are definitely geocurious, but our jobs are tied to location and we work in education. In our careers, the salaries fit the lower cost areas, so we wouldn’t be well ahead by moving. I’m always envious of those who have work-at-home jobs or the flexibility to work from anywhere. Once we are financially free though, we may look into moving to a lower cost area to keep more of what we have saved.
Hey, Kate. I love geo-curious people. But as you pointed out, what works for one doesn’t necessarily work for another. A lot depends on your job, age, and temperament. I have many friends on Long Island who can’t wait to retire and leave for a warmer place with a lower cost-of-living. My brother- and sister-in-law, however, are true Manhattanites. They love the restaurants, the museums, the shows, and the vibe. and they’ll never leave. But by and large, I agree with you. Give me a low cost-of-living city. I’d rather save my money and visit high cost-of-living cities every now and then. Thanks for stopping by, Kate. Always a pleasure hearing from you.
I’m living in Dubai at the moment, so not very relevant to most of your readers I suspect.
But it’s interesting to see that our property tax and utility bills are almost identical to yours in Charlotte, but that’s for a 1400sq ft apartment, so I think you win!
I’ve checked out other costs and we can save loads on groceries, going out costs, and some other things by relocating, and that’s exactly what we’re going to do next July (well, once we’ve done some travelling).
The question is where to relocate to – we just don’t have a clue. Did you have any connections in Charlotte before relocating there, or did you build your new life there from scratch (other than the telecommuting)?
Hey, David. No. We had no connections in Charlotte. Our game plan was pretty simple. Go down to Charlotte and buy a house or condo outright. This way we could get by in a worse-case scenario–that is, we could get by if all we managed to do was get jobs paying $10/hr. Happily, our game plan worked to perfection. We bought a condo outright, Mrs. Groovy kept her New York job, and I got a job that payed roughly two-thirds of my New York salary ($50K vs. $75K). So building a new life was fairly easy. The key is to relocate from a position of financial strength. Own your house outright in a low-cost city or state and your odds of building a rewarding life go up immensely. Thanks for stopping by, my friend. I hope my reply helps. Cheers.
Housing prices here are sky rocketing here but rent is stagnant. Property taxes are being used for the most ridiculous county projects (none proven effective in the past).
Makes me want to hit the eject button out of the crazy house but the tech jobs here are lucrative for my husband. And at least we’re not in California, Silicon Valley. The adjusted salary would be lower than the salary in Washington after living expenses.
We’re not even talking with Cali’s state tax.
So nice there’s a new episode of talking trash! Been a while!
Hey, Lily. I think you and Jared are playing it right. High-paying tech jobs with high housing costs (Seattle) is much preferable to high-paying tech jobs with ludicrous housing costs (Silicon Valley). And I hear you about dumb government projects. I don’t get it, but people prefer a government that tries to fix everything and rarely succeeds to a government that limits itself to the basics and succeeds often. Meh. We are such a fickle species.
I know the pain of this all too well. I live in LA and in an area that the prices continue to rise at rapid rates. A 3-bedroom 1953 craftsman 3 blocks away from me is valued on zillow for 1.5 million. How in the world do I stand a chance of owning here? I don’t. I don’t plan on staying here forever. But, I do have to figure out where I want to go, and what I will do when I get there. Video jobs are not as abundant as they are in LA.
$1.5 million for a 1953 craftsman is bananas. I just ran some numbers. If you put 10% down ($150,000), your monthly mortgage payment would be $6,840. And that doesn’t include taxes, PMI, utilities, and insurance. Yikes! I think the only answer is to do what you’re doing. Rent the cheapest place feasible and save like a maniac. Then once you have half FI for a normal city (Portland, Vegas, Austin, Omaha, Nashville, etc.), go to that city and start an encore career. I get so frustrated. Things shouldn’t be this tough for talented people like yourself. Sigh.
I live in Spring Hill, Florida which about 40 miles north of Tampa. My home is 1800 sq ft and worth about 175K. My monthly expenses in relation to housing are:
No State Tax!
Electricity $150 (fall) $250 (summer)
Mortgage N/A
Property Tax $77.42
Water/Trash $27.46
Insurance (w/o sinkhole) $112.75
Total $367.43-467.43
Whoa! Property tax $77.42? Monthly operating costs between $367 and $467? I have a new found respect for FLA. Very cool, FP. Thanks for sharing.
Being in a high cost county and high cost/tax state, I can really relate. We are talking about seeking out a lower cost of living in the future. Would also like a warmer climate. We are in the Chicago metro area right now. Charlotte compares favorably. Tom
Hey, Tom. I have nothing against Chicago, but that city scares me right now. And I’m not talking about crime. The housing costs, property taxes, and winters all strike me as extremely unfriendly. And whenever I read an article about our public pension crisis, it invariably brings up the state of Illinois. Get out while you still can, my friend! Haha! I’m sure things aren’t as bad as the press portrays it. But there are cheaper and warmer places to live. Whenever you want to check out Charlotte, just let me know. I’d be more than happy to be your tour guide. Have a great weekend, my friend. Cheers.
Thanks so much for the kind words and thoughts Mr. Groovy. I’m a long time resident of the Windy City metro area, but can’t say I disagree with a word you say. Tom
Very nice! Did you ever consider going to a really low cost area when you moved? Charlotte is still way more expensive than rural Tennessee or Texas or Nebraska? I live in rural Arkansas where housing is half of Charlotte but where I still earned big city wages before I retired early. I know there are family issues and some people think there are benefits to metro areas like Charlotte but I like having free use of 800 acres of wilderness behind my inexpensive 3000 Sq ft house, no traffic ever, safe high quality public schools, non crowded outdoor recreation, and five years of free college tuition and fees for every kid in the school district.
Funny you mention Arkansas. Mrs. Groovy and I were in Arkansas last year. We were in Little Rock and Hot Springs. And we were very pleasantly surprised. In fact, Mrs. G mentioned to me that she could see us living in Arkansas if things got too crazy in North Carolina. So I’m with ya, my friend. Arkansas, Tennessee, and Alabama are definitely on our radar.
I’m definitely geo-curious as you can catch me browsing the online real estate listings for other states (and even other countries) pretty often. But as I’ve mentioned in the past, my wife’s not quite on board with that plan. Still, a guy can dream…
I’m sure your numbers will be tempting to many people. Your property tax alone has me ready to start packing!
Nothing wrong with dreaming, my friend. The wife will eventually come around. Here’s one you can pass onto her. My aunt left Long Island last year. She was paying around $18K a year in property taxes. She bought a new townhouse in a Wake Forest development chock full of amenities. Her property taxes? Around $2,500. That’s a huge swing. And she no longer has to worry about shoveling snow and scraping her car windows in the winter. I’m not saying it’s heaven down here. Just a little easier on the wallet and the mind. Thanks for stopping by, my friend. It’s always great hearing from those who “dream of things that never were, and ask why not?”
Nice, your property tax is much lower than our too.
My brother is moving to NC very soon. He hates the high cost of living in the Bay Area. We’ll see if he likes it better there.
Portland isn’t too bad for a big city on the west coast, but I’m open for geoarbitrage. The problem is we live in a really good school district and it’ll be tough to change school. We’ll see how it goes.
Yeah, our property taxes are about one-fifth the property taxes on Long Island. And I as far as I can tell, the government services down here are just as good as those up in New York. Our per pupil cost for K-12 is a little less than $10K. In New York, the per pupil cost is over $20K. In the town I grew up in, Plainview, Long Island, the per pupil cost is over $25K. And here’s the kicker. North Carolina students do slightly better on the SAT than New York students. You know the old saying, “You get what you pay for.” Well, I don’t know if that’s true when it comes to government. In fact, the opposite might be true. The more money you spending government the less efficient the government becomes. Anyway, I’m looking forward to your brother becoming an honorary Southerner. It will mean that you’ll eventually have to visit, and I’ll get a chance to finally meet one of my favorite bloggers. Have a great weekend, my friend. Cheers.
A monthly heating bill can run almost $500 in the winter months in the Northeast depending oil costs. I’m sure you don’t miss those bills. We’d love to get out of Long Island, but my wife is originally from CA. We have some decision to make in the future. I just touched base with a former co-worker and he made the leap to NC and could not be happier.
Hey, Brian. North Carolina is a great landing pad for New Yorkers on the move. The weather is great, the people are great, and the cost-of-living is great. I think the highest gas bill we ever got was last February and it was a little less than $170. During the spring and fall it’s around $50 a month. During the summer months, it’s around $20 a month. Also, a New Yorker will no longer feel out of place down here. When Mrs. Groovy and I first moved down here in 2006, the New York accent was very much a novelty. No more. Now displaced New Yorkers are everywhere. In fact, Mrs. Groovy and I were in a local coffee shop today and the owner was from Buffalo. I’d love to have you down here, my friend, but you got to do what’s right for the boss (i.e., Mrs. Dept Discipline). Perhaps she’ll have a change of heart when the kids are all done with college and out of the house. Always great hearing from you, Brian. Have a great weekend. Cheers.
Here in Texas the housing costs can vary depending on your area. Our place in the ‘burbs was ~$300k for 3900 sq ft, yep it’s a McMansion. Utility wise we’re paying about the same, and with 20% down payment, and insurance we’re around $1900/month. Our HOA is lower, but that gets us access to 2 pools, lots of parks/playgrounds, a small gym, tennis court, loads of walking paths, along with 5-6 community events each year. It’s a pretty sweet setup especially since we can walk to and from the school and daycare to drop off/pickup the kids.
Property tax, though… Ugh, just ugh… We’re paying around 9% currently, so yeah, that’s a pisser and they keep adjusting it up little by little each year. It’s my biggest gripe/concern with staying in Texas long term. Stupid property taxes…
We found the Tri-state area around you guys was nice for geo-curiosity, along with Roanoke VA area. That fizzled when Mrs. SSC got her teaching job, so Texas it is for now. 🙂
I love the Longhorn State. But in order to forego an income tax, you guys have to deal with obnoxious property taxes. And I hear ya about housing prices. My friend works for Bank of America. In New York he had a one-bedroom co-op, around 700 sq ft. He got a transfer to the Dallas office and bought a 3,500-4,000 sq ft McMansion. It cost less than half the cost of his co-op. Scary.
Geo-curious sounds dirty! We’re definitely interested in some form of geo arbitrage eventually, but looking at your costs, compared to us were getting a pretty good deal considering the area we’re in. Our bills are definitely lower. Our gas bill was $15.51 and our electric was $6.04 last month. I don’t know if that makes up for it, but we win in that regard.
Regardless interesting to see.
Just looked it up. Two doors down… 2,700 sqft sold for $1.4M… oof!!! Last year, they’re saying its $1.7M now. So, electric bills be damned!
Yeah, we definitely got you on the price of homes. I guess if you want a view of the Pacific, you got to pay for it. Meh.
I live in the same neighborhood as the Wows. So there you go! lol!
Haha! Thanks for the reality check. Until I talked to you and Mrs. WoW, I didn’t many areas had cheaper utilities than Charlotte. I certainly didn’t think any cities in California did. But when you live in a temperate area of the state, and you don’t need an HVAC system, electricity and gas is pretty affordable. Damn it, Mr. Wow. You got me beat!
Nice to finally meet at least Mrs. Groovy’s feet in person. 🙂 I think it’s so great that you’re doing this series. SO important. As someone who lives in a lower cost area of the country, I get quite nauseous when I hear about NY housing prices. 🙂
And the utilities! Don’t forget the utilities. Long Island homes get their electric bills every two months (at least that’s the way the billing cycle used to work), and it’s not uncommon for those bills to exceed $800 during the summer months. High housing costs + high utility bills + high taxes + super congested roads = a lot of stress. Don’t miss it one bit. Give me small town America any day. Thanks for stopping by, Laurie. It’s always great hearing from someone else who gets queasy hearing about NY home prices.
Oh my dear that is ridiculous!!! No wonder New Yorkers are stressed out. 🙂
Definitely cheaper there than it is here in Minneapolis, which over the past several years has been inching up. Our 2-bedroom apartment we were renting was nice, but it was $1900 – the same as our one-bedroom apartment in Los Angeles area, a block from the ocean.
New homes being built in our neighborhood have a starting price over $10k more than we paid TOTAL for our house, including our upgrades. The forced appreciation the builders are trying to instill is intense for sure.
I think we’ll be here for a long time so the big things for me are finding ways to keep our utility costs low and bump up our income over time. Thankfully Minneapolis-St Paul is home to a huge number of company headquarters, including giants like Target, United Health, Best Buy, 3M, and more…makes the job market here pretty awesome for a tech guy like me. But damn it’s been getting more and more expensive for housing. Don’t need to worry about that really anymore at least for our mortgage!
Dave we are in the Mpls/St. Paul outskirts (takes hubby 45 minutes to get to St Paul) and the prices are more affordable if you can handle the drive. But prices in general are definitely increasing everywhere here. Blech!
We built out in the SW suburbs 🙂 Very happy with our house even if it was a bit more expensive than alternatives.
For a reference though on how much home prices have gone up even out there…some friends of ours bought a house probably five years ago now out in Cologne/Waconia area. They paid $127k.
He got a job at Amazon earlier this year here in MSP and didn’t want to do the commute. Sold it for $225k. They made minimal improvements (some cosmetic things is all) during that time and their property appreciated nearly 80%! It’s absolutely nuts!
Yikes! 77% appreciation in 5 years is pretty scary.
That IS crazy!!! I know that Waconia area has really gotten super popular over the last several years. Kind of like the Woodbury of 10 years ago. Now it’s so built up we can’t even stand to visit.
Forty-five minutes is a fairly long commute. But with the advent of podcasts, long commutes are decidedly less painful. Is Mr. Frugal Farmer a podcast fan?
Not a big podcast fan but he has plenty to listen to: there are a couple of good morning preachers and Sean Hannity comes on during the drive home. 🙂
I definitely see the appeal of Minneapolis. I was up there a couple of years ago on business. The city and people were very nice. My only worry about your neck of the woods is the winter. Once you reach an advanced age–anything north of 50–your tolerance for cold goes down dramatically. I don’t know if I could survive a Minnesota winter. Hopefully I’ll get up there again in the next few years (during the summer, of course). Not only are there some great bloggers up there to visit (you included, of course), but I also had the best fried perch sandwich I have ever had in Minneapolis. Thanks for stopping by and sharing, my friend. I really appreciate it.
You’d better come up soon!! We have some great fishing on our lake and could cook you an awesome bass dinner. OR, all you can eat fish fry at a restaurant not 10 minutes from here. 🙂 Alas, you are right; the winters are terrible, although this one has been unseasonably warm for which I am forever grateful (it’s about 45 here right now). Normally, though, we pretty much lock ourselves inside and whine for several months on end. 🙂
This is awesome! I love that the housing price in Charlotte is half that in DC (where we live).
Mr. FAF and I have been talking about moving to a much cheaper city in the future or when we retire. It’d be best if we could telecommute and get paid the rates in a big city while living in a cheaper city (i.e. telecommuting) hehe.
I’d be curious to see the cost comparison for other categories as well (i.e. food). 😀
We didn’t plan on it, but I kept my NY job and telecommuted for 10+ years. My NY salary was just OK because I worked for a nonprofit. I got my usual 3% raises. But I was on a 35 hour work week and had crazy benefits — 22 vacation days that rolled over, 10 sick, another 15 or so holidays, plus an 8% match in my retirement fund AND I did not punch a clock.
I can tell you though, supermarket prices are not cheaper here. And even buying produce from farm stands is not really less expensive although the quality is generally good.
Mrs. G those are some crazy benefits right there! I am hoping to do something similar in the nearish future where my business will continue to run here in CA, but I can be anywhere in the world. Thanks for being my inspiration!
Geoarbitrage is a godsend for those who are location neutral. Mrs. Groovy was very lucky when she gave her two-weeks notice at her NYC job and they asked her to telecommute. That made our transition down to Charlotte very easy. My sister just got a telecommuter gig at UNC Hospital. She plans on spending three months out of the year in Tuscon where her daughter and son-in-law lives. So I guess the lesson is the more mobile you are the more options you have. I’d love to have you and Mr. FAF down here in North Carolina. But don’t move to Charlotte, move to Raleigh. Mrs. Groovy and I are moving up there next year to be closer to family. Thanks for stopping by, Mrs. FAF. Have a great weekend.