A transfer from San Francisco to Austin with the identical six-figure wage and no state earnings tax sounds just like the form of improve that ought to make a household really feel immediately “richer.” For one couple incomes $210,000, the numbers advised a distinct story. Their spreadsheet confused them sufficient to take the query to Reddit: “Relocation to Texas appears to be like richer at first. Our math says break even. What are we lacking?”
Within the MiddleClassFinance subreddit, the couple laid out the main points. They lease for $3,200, pay $2,050 for daycare for 2 younger youngsters, and canopy the same old prices of groceries, utilities, automotive insurance coverage, fuel and well being premiums. After federal and state withholding—and every partner contributing 10% to a 401(ok)—their take-home pay lands round $8,000 a month. As a number of Redditors identified, these numbers look surprisingly modest for the Bay Space, particularly the lease and childcare prices.
The Austin alternative retains the couple with the identical employer. Base pay would rise barely to $215,000, with a goal bonus and a $12,000 relocation fee. The largest draw is Texas’ lack of state earnings tax. However the couple desires to purchase instantly as a substitute of renting once more.
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Their Redfin searches pointed to a “starter newish home” round $650,000. With 10% down at a 6.9% charge, they estimate principal and curiosity just below $3,850. Travis County property tax at roughly 2.1% provides greater than $1,100 a month, and insurance coverage quotes close to $270 replicate native hail danger. A small HOA payment brings housing prices to about $5,318 earlier than utilities.
Childcare in Austin seems cheaper, with quotes between $1,500 and $1,700 for each youngsters as soon as the four-year-old strikes right into a lower-cost pre-Ok spot. That places housing and childcare close to $6,900 a month. After including utilities and regular day-to-day bills, their projected Austin price range would attain roughly $10,200 month-to-month—greater than their present California life.
The annual comparability would not provide a lot reduction. They’d save practically $10,000 by avoiding California’s earnings tax, however Texas property taxes on a $650,000 dwelling strategy $13,600 a 12 months. Insurance coverage is greater. Utilities are projected to climb by at the very least $1,200 yearly. Driving prices enhance with longer commutes. Austin daycare turns into cheaper over time, they usually keep away from Bay Space lease inflation, however the general commerce nonetheless tendencies sideways.
Their expectations weren’t unreasonable. Latest Zillow knowledge exhibits San Francisco’s typical dwelling values sitting above $1.2 million, whereas Austin’s median is just below $500,000. Price-of-living comparisons typically present San Francisco greater than 40% greater than Austin as soon as housing is normalized. On paper, leaving a seven-figure housing marketplace for a mid-six-figure one appears to be like like free monetary respiratory room.
Redditors rapidly defined why this couple’s state of affairs breaks the sample. “You are evaluating renting in California to purchasing in Texas,” one person wrote, calling it an apples-to-oranges calculation.
Others echoed that their present lease of $3,200 is an unusually robust deal, and changing it is perhaps tougher than they understand. Texans chimed in with their very own warnings, from steep electrical payments to particular taxing districts that push property charges nicely above 2%.
One Dallas commenter wrote, “Texas will kill you with property taxes and utilities payments,” including that even a small residence frequently hit $300 for electrical energy.
Many advisable renting in Austin for a 12 months earlier than committing, arguing that native visitors, climate and neighborhood variations cannot be understood from afar. Others centered on long-term profession mobility, noting that if the couple works in tech, management roles are nonetheless extra concentrated within the Bay Space.
If an enormous transfer feels too everlasting, there’s additionally a method to ease into actual property with out committing to a full mortgage or studying a brand-new tax system in a single day. Platforms like Arrived let individuals purchase small shares of rental houses in any metropolis for as little as $100, giving them a method to construct real-estate publicity with out relocating, coping with upkeep or taking up a neighborhood property-tax invoice. It is a easy method to check the waters whereas greater selections keep on maintain.
In the end, as one person summed it up, “There is not any secret hack right here. Texas will get your cash in a different way.” For this couple, the transfer would not really feel richer—not as a result of the mathematics is mistaken, however as a result of buying and selling one costly marketplace for one other not often works the way in which a calculator makes it look.
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