Location, Location, Location.
Why is this real estate rule #1? Forget the usual reasons of resale value and such. Let’s talk about time. When you have a family as large as mine (or a family of any size, really), you quickly realize that time is your most precious commodity. When my wife and I were house hunting, we intentionally confined our search to locations that were in close proximity to my office. I now live one minute from my office. Literally. My daily commute time: 2 minutes. It’s glorious.
Time is fleeting. Time is valuable. I don’t think that you need me to do the math to prove that to you, but I’m going to anyway. You’re welcome.
The average annual household income in the United States is $53,657. Suppose that you make $53,657 per year. Suppose that you find yourself in the market for a new house and are presented with two options: House A and House B. House A is 10 minutes closer to your office than House B. If you choose House A, you have just added 20 minutes of non-commuting time to your day. This time–if spent working rather than checking Facebook–is worth $9 per day to you (At your hypothetical $53,657/year income, your working time is worth approximately 45 cents per minute.). That’s ~$186 per month. That’s ~$2,235 per year. That’s ~$25k extra money for a house ($25k added to a 15 year mortgage at 4% increases your monthly payment by approximately $186/month). Alternatively, for those of you with small families, you could pay for a vacation with that money. Or, you could buy the world’s most expensive burger. Disclaimer: don’t use my logic buy one “world’s most expensive burger” every year. That would be monumentally stupid.
Wondering how much money it’s costing you to live an extra few minutes further away from your office or how much more you could earn if you lived closer to work? Here’s a calculator for you. Nerd it up, fellow nerds.
|My annual income is:||– OR –||My hourly income is:|
|What if I lived minutes closer to work?|
|Your time is worth per minute.|
|If you spent that time working rather than commuting, that extra time would be worth:|
I’m not saying that living in close proximity to work is the right move for everyone. I am saying that I think people usually undervalue that aspect of a home search.
Special note to millennials: you crazy kids might just be onto something. No, not your creation of phrases like “on fleek” or your chronic overuse of the 💯 emoticon. You might be onto something with your desire to live in cool downtown lofts in close proximity to your place of employment. Save time. Save money. Downtown on fleek. Props to you. 💯🇺🇸🎉👍🙌🍟💯
Oh, and one final note to parents: I would argue that, for many of you, spending an extra 20 minutes per day with your family is far more valuable than time spent at work. It’s pretty tough to quantify the value of things like a healthier marriage or a stronger relationship with your kids. Either way you slice it, time spent commuting is costly. There is power in proximity.