I had a client come into town last week to make a final decision on a house to buy.  He will be working in the northern section of Virginia Beach and there are a lot of houses to choose from in his price range.  New construction was especially appealing to him; however, the commute would be about 40 miles each way (to Suffolk).  Let's look at the cost of this:

40 miles each way = 80 miles per day round trip x 5 days per week = 400 miles per week.

MPG of his car = 26 hwy/19 city the commute being about 50/50, estimate MPG to be 23.

That's 17.39 gallons of gas commuting each week at $3.89/gallon = $67.65/week = $293.15/month = $3518/yr.

House #2 is a resale in Virginia Beach that is 11.5 miles from his place of employment.

11.5 city miles each way = 23 miles per day roundtrip x 5 days per week = 115 miles per week.

At 19 MPG, that is 6.05 gallons per week = $23.54/week = $102.03/month = $1224/year.

The difference?  $44.11/week, $191.12/month or $2294/year plus the cost of additional maintenance a vehicle will need that is driven more miles so to keep things easy, let's say about $200/month.

Wouldn't it make more sense to purchase a home in Virginia Beach?  Yes, the house in Suffolk is more house for the money; however, with the additional commuting expense factored in, the buyer can actually spend $200 more per month on a house in Virginia Beach which equates to $33,000 more house!

Being that the additional $33,000 in mortgage would include interest, there is the additional factor of the increased mortgage interest deduction which actually brings the VALUE of the $33,000 even higher depending on the tax bracket!

Lastly, there is the TIME factor.  Less time commuting = more time for family, more time for oneself, etc.

Needless to say, we are writing an offer on the house in Virginia Beach.

Tina in Virginia