Welcome to the narrative of how we ALMOST moved to our dream neighborhood. This story demonstrates the real-world example of how the pressures of being close to friends, being in an affluent neighborhood, and inviting in lifestyle creep can even happen to the avid budgeter. But as luck would have it, our off-market home purchase fell through, and we have stayed put in glorious Vancouver, Washington, as renters rather than moving to much more desirable Portland, Oregon.
Here's the story.
Around the tail end of the big housing boom in Portland in 2017, I moved there to begin my six-year training program in plastic surgery. Although I had planned to buy a home since my training was long, contrary to WCI advice, I was instead pulled into the busy schedule of a surgical resident while also attempting to soak up the last few years of my 20s. Renting seemed like the better idea, after all.
Near the end of my training, I met my now-husband and convinced him to relocate with me for a one-year fellowship in Salt Lake City. Being an expert planner, we decided to target Portland for our final place to settle down and have a family after training. We already had roots with long and strong friendships, and we were so excited to return back.
There were not a lot of jobs that fit the bill—it was actually just one. I wanted to have a practice that was exclusively facial surgery, which is not so typical for plastic surgeons. I got connected with a small physician-owned practice in Salmon Creek, Washington, aka a suburb of Vancouver. The other surgeons were smart, kind, and cooperative, and they were open to me building an exclusively facial surgery practice. Ideal. It was a few miles from Portland, so we would be essentially moving back.
Vancouver is mostly a blue-collar area with moderate restaurants and plenty of suburban sprawl past the downtown and waterfront. That's in contrast to Portland, which has become a pilgrimage site of Californians and others looking to continue enjoying top-notch food, cute shops, and a fun music and arts scene. Vancouver benefits from a smaller homeless population than Portland. Many professionals who live in Portland and work in Vancouver say they do this willingly and know that they must pay the “culture tax,” which is ~13% and rising.
Here was our thought process when we were deciding whether to move to the “cool place” (Portland) or the “not-as-cool place” (Vancouver, Washington).
#1 Start by Renting
With a baby on the way and a husband who works mostly remote, it was easier to pick the logical option to rent in Vancouver rather than Portland. My commute would be half the time (since I wouldn't be traveling from Portland to Salmon Creek); I would not have to battle traffic on bridges; and, most importantly, we would be saving a massive amount of money since Washington doesn’t have state income tax. That's 13% savings from what Oregon taxes to be exact. This was worth the 12- to 20-minute car ride to visit our friends and our favorite restaurants in Portland (although it did preclude us from hopping on our bikes or starting a stroll and bumping into friends).
More information here:
Why I Designed My Life Working Part-Time 931 Miles from Home
The Best and Worst Metro Areas for Physician Salaries
#2 Run the Numbers
My first few attending paychecks were coming in, and with a slightly net negative portfolio, I was starting to run the numbers. Honestly, I became a little obsessed. How could I finally catch up to all of my non-medical friends and build some wealth?
One part of the equation seemed obvious: stay in Vancouver and save money on state income taxes. The savings were a no-brainer, especially since I worked in Vancouver. Or was it? Having lived in a glorious place where you can bike or walk to your friend’s place, bump into buds on the street, and enjoy shaded green spaces throughout the city, that tempted us to move to Portland. My husband, who had a graduate degree in urban planning, had always dreamed of setting roots in Portland. And honestly, I preferred it, too.
What was the point of working so hard for so long if we couldn’t live exactly where we wanted?
#3 Ignore the Numbers
When a friend was going to sell their house in the most coveted neighborhood in Portland—with the best schools, just blocks from the most idyllic park in town—we wanted it. After a semi-drawn-out off-market deal, we signed the papers, and we decided we were going to sacrifice financial abundance for lifestyle.
The numbers would be tight—really tight. Like we are going to be tent camping for every vacation and not eating out whenever we feel like it, tight. In time, my income would increase, and the hope would be that things would feel less tight, eventually. As we were walking to a fundraiser, I distinctly remember telling a friend about how tight my finances would be, and she asked, “Are you sure you can afford that?”
The truth is, we could justify it with some of the guidelines: it was no more than 2.5x our combined annual income, and the mortgage was high but acceptable. We were also breaking some rules: depleting our emergency fund and putting less than 10% down on a “doctor home.”
So, when the deal fell through due to a totally unexpected lowball appraisal which shocked everyone—the lender, agent, and us—we decided to take a beat and rethink things.
More information here:
How Moving to Canada Affected My Life as a Physician
#4 Run the Numbers, Again
Now, having survived the rollercoaster of buying a home, minus becoming homeowners, we have newfound appreciation for the process and how scary it is. We have also run the numbers again. In just a few more months of renting, we have secured our emergency fund and paid off most of a pesky car loan, and we are halfway to a 20% down payment on a reasonable home.
We have embraced living in a less trendy spot, knowing that there is a huge cost discrepancy between being renters vs. home owners in the city. And also knowing that meeting our financial goals first while enjoying our lives, even if it includes some extra driving to visit with friends, is worth it in the long run. Nothing is permanent, and we can always pay the lifestyle tax someday in the future if we choose. For now, we’re renting and keeping an eye on the market as we continue to save for a 20% down payment. In the meantime, we have focused on connecting with neighbors and becoming more active in the community.
Hey, we're not living in the cool place that we've always wanted. But for now (for our family and for our finances), this is the RIGHT place.
Have you used geographic arbitrage to your advantage, even if it meant you were living somewhere other than the “cool place?” How did that work out? Or were you willing to sacrifice and spend more money to live in a more desirable spot?