Should I stay or should I go: The real costs of moving out of the city
Packing it all in and moving out of the city has never been more appealing than in our current COVID climate. But is it really cheaper to leave city life?
Packing it all in and moving out of the city has never been more appealing than in our current COVID climate. But is it really cheaper to leave city life?
Like any good urban legend, there’s always a friend of a friend who traded in their paper-thin, 400-square-foot apartment for a dirt-cheap dream house in an idyllic town.
And as the pandemic goes on, the lack of cultural events, limitations to restaurant dining and public transit, and ever-crowded streets have all contributed to a desire to flee urban centres. And if you’re working from home, why pay the overhead for an expensive downtown home office? A lot of city-dwellers feel like the premium they’re paying for proximity to those perks and their workplace just isn’t worth it right now.
But, do you really get the full farm for the cost of your condo?
Sure, some things like cost per square foot are cheaper, but there are glaring financial blind spots to leaving the city. Julie Cowan, a relocation specialist and owner of Relo To, a relocation and destination services boutique company, advises clients to “worry in the right order” when considering a move. Not bad advice for most things in life.
To help you figure out if you should move out of big Canadian cities from Vancouver to St. John’s, you really have to consider not just the housing market (have you seen the prices of houses outside of Halifax?), but the over all costs that add up. So, we talked to three Canadians who recently made moves out of the city (they happen to hail from Toronto, but their experience is representative of any urbanite wanting to make the move), as well as Cowan’s advice on how to not go broke. So make sure the grass (and your wallet) really is greener, before you purchase a few acres.
Even with a solid career, Christopher Morello, a 26-year-old loyalty and e-commerce manager at a Canadian airline, still felt he was only inching toward his financial goals living downtown—and buying a home wasn’t even on the table. When the pandemic began, he decided to give up his rented two-bedroom condo in the entertainment district and stay with family in Dorchester, Ont., a small town just outside of London with a population of approximately 4,000. By chance, he stumbled upon his dream home.
Morello realized this home fit within his budget. “I was able to make a down payment and still get a monthly mortgage that was less than my rent in Toronto.” Now he loves the small-town life, with its nature trails and warm community. “My house faces the street, so there’s still that hustle and bustle, but in my backyard, you feel like you’re at the cottage,” says Morello. “It’s the best of both worlds.”
The home itself might also bring in extra income, since Morello is in the process of turning it into a co-working space, called Le Host. “It will create a junction of locals who are co-working with people coming for a getaway from the city.”
When renting, Morello relied on walking or public transit (he doesn’t like driving). “Right now, I have an electric scooter, but I’m not sure what I’ll do in the winter,” he says. And while his gas, hydro and property tax still come out to slightly less than what he was paying in rent, there are costs that come with owning a 100-year home.
“Anyone buying a new house should have at least $15,000 in cash ready for unforeseen costs,” says Morello. “Home inspections don’t reveal everything, and I’ve already had to shell out for new appliances and a furnace.” He also spent approximately $1,000 on the move itself, for movers, truck rental and closing costs.
And then there’s the question of the future, since he’s still in his 20s. “I see myself staying for a long time,” says Morello. “but I have goals to live abroad again at some point too.” And he feels like the decision was a win for now: “Honestly, the only thing I really miss about the city is the tacos.”
Here are the differences in Morello’s monthly expenses.
For Domini Clark, a 41-year-old editor at the Globe and Mail, she’s run into obstacles before even getting the chance to change her postal code.
After selling her house in Toronto’s Corktown neighbourhood and splitting the proceeds with her ex-partner, she found herself renting, as she didn’t have enough money to re-enter the Toronto housing market. “Maybe I could buy a small condo,” says Clark. “But even then, can I afford my mortgage and the condo fees?” So, she decided to look at entering the market in Hamilton.
Aside from real estate investment, she knew of other benefits, like easy access to nature. “Travelling used to be how I got my nature fix,” says Clark. “When COVID happened, I was stuck downtown.” Since she doesn’t have a driver’s license, Hamilton’s trails being so accessible by public transit gave the city extra appeal.
She’s found that entering the Hamilton market has its pitfalls too. “Hamilton has great housing stock, a lot of old Victorian homes,” says Clark. “But then you realize a lot of the properties priced in the $300,000s need considerable work, so you bump your budget up to $400,000.” On top of that, she found that the market is saturated, because a lot of people had the same idea.
“Houses are up 15% on average compared to last year,” says Clark of the Hamilton real estate market. “So, that low price tag that appealed to you initially suddenly becomes nearly half a million dollars.”
Clark ended up spending the maximum amount she set for herself, but chose to hold off on throwing all of her cash at the down payment. “I could have put more, but I’m choosing to only put 10% down and invest the rest of my savings,” says Clark. “In my mind, investing the additional money makes more sense rather than trying to pay it down. I feel much more secure knowing I have access to emergency cash.”
She also factored in an extra $15,000 for inevitable repairs, like electrical and plumbing that come with owning an older home, and other expenses. But she’ll be gaining a lot, too. “It becomes an investment, and I get access to nature.” Not to mention more bang for her buck: At the time of this interview, she put an offer in on a fully detached three-bedroom Victorian on a spacious lot, and the very next day, she got it.
Here are the differences in monthly expenses Domini is anticipating.
For Melissa Greer, a 33-year-old freelance writer and brand consultant, the push to leave the city came from having a family. She and her husband had been happily living in a one-bedroom-plus-den in the Fort York area of Toronto since 2013. While they loved the proximity to her office and the perks of the city, the lack of space began to weigh on them when their daughter was born.
“With the rising costs of real estate plus the new expense of daycare, we didn’t feel like we could afford much more space than we already had,” says Greer. “We began to think about moving back toward family when our daughter was about a year old.” They were able to sever a lot from their in-laws’ farmland (free of charge) in the Peterborough area and start building their own house. They’re currently staying with that family while the house is being completed (re: extra savings). Should you sell your home to your kid?
“The solution would allow us to be close to family—as in, next-door to my in-laws,” says Greer. “And we found we could do a lot of the work for the build ourselves, thus making our budget go further than if we had just purchased a home in the country.”
And with their dream home in the works, the costs of living are looking comparable to what they spent in the city. Plus, Greer left her full-time office job to pursue a freelance career and mostly works from home now. “My commute is bedroom to living room,” muses Greer.
Additional expenses popped up. “We did buy a second car,” says Greer. “There were also a few hidden costs with permits, surveys and lawyer fees throughout the process of severing the lot and getting everything in order to be able to build.” The building costs are hefty, a permit costing $25,000, a land survey costing $10,000 and legal fees about $3,000.
But savings have popped up too, and their biggest win so far has been on daycare costs. “We’re saving just over $1,000 per month,” says Greer. “We went from paying $1,700 to under $700 in Peterborough.”
“I do miss the liveliness of the city and walking everywhere, I’m not getting in that incremental exercise throughout the day because when I leave my house it’s to drive somewhere,” says Greer. “But [with COVID-19] it’s been so nice to have access to outdoor space as well as more room within our home, which has become my office and gym.”
Here are differences in Greer’s expected monthly expenses.
You have some homework—and, no, it’s not house hunting… just yet.
“Research what all of the additional expense could look like,” says Cowan. Plot out everything from the cost of moving itself, to buying and selling your home or extra deposits that may need to be offered on competitive rentals (she suggests having $250 to $1,000 budgeted for this). If you’ve decided on a place, you have to then consider extra things, like utility costs, furnishing a bigger space and the cost of living in your new area. Transportation can be huge too. “Buying an extra car is expensive,” says Cowan. “And maintenance is likely to be around $500 to $700 per year. You’ll also need things like snow tires (a set of four for an average car could be $250 to over $400) and then there’s fuel, which is the biggest expense.” And that vehicle might get run down quicker, when you consider things like popping out to do some banking could be a 35-minute drive away, depending on where you end up living.
“Build a spreadsheet with your current costs and map out what it will look like at the other end.” Include the headers “Current Living Expenses” and “New Living Expenses,” and include items that are part of your budget, including: housing, utilities (broken down – gas, hydro, water, hot water tank rental, internet and cable), phone (mobile and landline, as in some remote communities, you may continue to need a landline and need a cell booster to get better signals), vehicle(s) (financing/lease, maintenance, insurance, tires and gas), insurance (tenant and home), memberships, entertainment, and whatever else you can think of. Also, add column for “Moving Expenses.”
That pre-departure research should include every avenue of your prospective new life. “If you’re moving to a more remote community, there are issues you won’t think about, like internet connectivity, which is integral for remote working right now,” says Cowan.
A stay in your prospective area to see if you could truly see yourself living there might be in order (don’t forget to factor that expense in). “Use that time to really explore the community,” says Cowan. “If you’re somebody who loves going to the gym every day, where is the nearest gym? If you’re a real foodie, what’s that food scene like? Any cultural imperative, whether it’s a music or art scene, needs to be checked out. Also, will you have access to green space?”
Overall, Cowan advises to be realistic. “Take the romance out of the equation,” says Cowan. “Do your search during the coldest months of the Canadian year and see if you can imagine yourself there.”
Before you dreaming of sprawling farmland, take a long, hard look at what you want out of your lifestyle and how you want to spend your time. “Things like commuting and maintaining a larger property can be things some people love and other people loathe,” says Cowan. There’s also access to culture and resources to consider, as well as the future. “Perhaps you’re single now but may have children eventually. In that case, are you still going to work downtown?” she says. Even shorter-term: “We’re in a pandemic now, but what happens in a year or two when things kind of go back to normal?”
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Due to the large volume of comments we receive, we regret that we are unable to respond directly to each one. We invite you to email your question to [email protected], where it will be considered for a future response by one of our expert columnists. For personal advice, we suggest consulting with your financial institution or a qualified advisor.
We live in a rural area, and the internet, cell, and TV service options are limited, hence, with little competition we pay double what friends in the city can get similar services for. Also, our internet speed is crawl speed.
Snow tires at $250 – 400 each….
Moving from the city to a rural setting for us was a break-even proposition, but came with the benefit of open countryside, dark skies, and much less traffic noise. it worked for us – we made the move 17 years ago.
We did the opposite and sold our house in the suburbs during the pandemic to move INTO Toronto…for the exact reason the author states in the very last sentence of the article: “We’re in a pandemic now, but what happens in a year or two when things kind of go back to normal?” We love being within walking distance of everything, and near all the cultural/recreational activities Toronto has to offer. COVID won’t last forever and I wonder if those who left the city will start to miss it.
In two of the three examples listed here, those individuals already had family in the location that they moved to. Plus, Melissa Greer severed a lot from her family and is building a custom home…how many folks day dreaming about rural life have that option?
And a move to Hamilton…while just outside the traditional Greater Toronto Area it’s near enough that you can take the GO, and even commute into the city if you like.
So to the author’s original premise of trading big city life for an idyllic farm, I don’t think any of these are realistic examples of a someone actually uprooting themselves to move to a small Ontario town (no, Hamilton doesn’t count) where they had no prior family / connections.
What I think the author did well is illustrate that the fantasy of saving lots of money by trading in city life for the farm is just that – a fantasy. Two of the three examples say their savings are minimal, whereas Melissa is saving a bit more but again – she just took property from her own family – so not a typical example.
I think this idea of farm-life vs city-life is like everything else – way too complicated and nuanced to ever definitively say one is better for the other.
In these examples, these folks made the choices they think was best for them and their family. That’s all we can ever do.
But to say that city-life is over because of WFH and a once in a century pandemic? I can’t get behind that idea.
Property taxes are another thing to be factored in here as cities look to get more and more revenue, I’ve seen my taxes increase by 60% over the past 6 years meanwhile prices have stagnated or even decreased due some real estate bubble pricing.
More and more of us are finding ourselves able to do jobs from home or even to enter into small online businesses that you can operate out of anywhere. Making the need to be in a sprawling city less important and ultimately less desirable for those that understand the direction these crazy real estate prices are leading to. I know too many individuals who have gone bankrupt during covid because the cost of carrying all that becomes impossible if everything stops.
I still believe you need to live near a major city as total country life is not easy in Canada. I lived out on a farm for nearly a decade and like anything else, it has it’s pluses and negatives. poor telecom and internet being a huge issue if you do try to live in some off the beat place and try to run a business from there.
Just curious if the difference in property tax was factored into the calculations for scenarios where a home was owned and sold in Toronto to move to a suburb and buy another home. I’ve looked at options to move to the burbs from the city before just to see if there are any savings and it usually ended up costing more to live in the suburbs due to the need for another car, higher property tax, and utilities. Will be interesting to see what happens as the economy opens back up and people go back into the office.
Thanks for the question. We invite you to email your question to [email protected], where it will be considered for a future response by one of our expert columnists. For personal advice, we suggest consulting with your financial institution or a qualified advisor.
Moving to towns with high infrastructure is not what most of us think of as “leaving the cities”. Several friends have opted for the full rural life, and while they enjoy the access to nature, the quiet, the starry skies at night and so forth, they also face unique problems: long lanes that get snowed-in in the winter (expect to buy a snow plow or compete with your neighbours for whatever limited services exist locally), poor connectivity, no local emergency health care, and all the other things that go with living remotely and in isolation. (Good luck getting restaurant delivery!) I wish your profile had included at least one or two true rural residents, as that’s the fantasy I keep hearing from people, and they rarely think of these things… or (I assume) many others I haven’t heard of or thought of myself.
$1000.00 for moving and closing costs?
On what planet is Dorchester Ont on?
Some planet without Land Transfer
$2975.00 on 300k
Some planet without mortgage fees?
Maybe the planet of magic beans.