Anyone moved out of a high cost of living area to boost REI?

[Andrew Neal]

I'm wondering if anyone has sacrificed by moving out of a high cost of living area to a more affordable market to help boost their investing? 

My wife and I constant kick around this idea the hardest part of course is living family. I was born into the hottest real estate market in the country and would be lying if I said I dont envy the home prices elsewhere. And I am talking about your primary home, I understand you can invest anywhere with the right teams but you still need a roof over your head while doing it and paying half the mortgage I pay now would be fantastic! 

If anyone did make the leap out of an expensive market, where did you move and why?

[Llewelyn A.]

@Andrew Neal

I have a contrarian point of view close to @Ali Boone fantastic insights!

I have been investing in NYC, Brooklyn, specifically, for 21 years.

If I had EXACTLY that same thought, about selling my property and moving to a lower cost of living place, I doubt I would have achieved the same level of wealth that I have now.

As an example, in the year 2000, I bought a 2 Family home for $140k with $21k down, $7k closing costs. Today, it's worth $1.1 Million. What's even worse, the rents moved up from $500 per month per unit to $1,900 per month per unit.

Is it slowing down? Maybe. In 2014, I bought a 3 Family Brownstone for $900k, renovated it for $375k. Today, it's now worth $2 Million. Rents are approximately double what they were in 2014.

I also had a friend of mine that lived in Manhattan. He rented an apt for $2k per month in 2004. He bought cash flowing properties OOS, specifically in CT. The properties cash flowed about $1k per month.

Last year, which is 14 years later from his purchases in 2004, he had to move out of his apt because his rent is now over $4k from his original $2k per month.

His CT Properties cash flowed the same for the last 14 years, about $1k per month.

BUT... if you considered that his rent moved up another $2k more in rent, the over all effect is that he was losing money.

He is also effectively priced out of NYC and moved to a lower cost area in NJ. Had he bought his property 14 years ago, he actually would have been better off.

Now, granted, this is a very specific case. But I think it has a lesson to be learned.

As an alternative, what about taking out an Equity Loan or HELOC, renting out your home, and moving to the lower cost area, and still buy a few properties with the loan?

That way, if you really don't like your new location, you can always move back.

But if you don't do that, you can possibly be priced out of the very place you live in right now.

Just something to think about!