Is Moving to A Cheaper Place Worth It?
With rent prices up about 30% compared to pre-pandemic, moving to a place with cheaper rent sounds like a great way to save money. In some cases, a move can pay off, but moving is also expensive, and the costs associated with it (along with extra hidden monthly costs) mean you might be saving less than you thought—or it could even mean that you end up paying more! To figure out whether moving will actually put money back in your pocket, make sure you consider these expenses:
One-Time Costs
There are many one-time expenses involved in moving. Some—like the security deposit and first month’s rent—are the largest and most obvious. As long as you expect to receive a similarly-sized security deposit back on your current place and the monthly rent itself isn’t higher, these two expenses won’t ultimately impact your bank account. However, there are many one-time fees that you will never recoup and therefore need to factor into your math of whether it’s worth it.
Overlapping Rent: Unless you time your leases to end and start on the same day, you’ll pay rent in two places at once. If the overlap is only a few days and pro-rated, it might not be a big deal, but weeks of overlap will add up fast.
Broker Fee: Using a broker to help you secure an apartment can cost up to one month’s rent.
One-Time Amenity Fee: Some larger buildings charge an amenity fee for access to common spaces like gyms, pools, and community rooms. This fee often is not optional or refundable and can add a few hundred dollars to your upfront costs.
Pet Deposit: If you are bringing a furry friend with you to your new place, your landlord may charge a pet deposit. In some cases, this is refundable at the end of the lease but not always.
Moving Truck and/or Movers: Unless you move all of your belongings yourself using your own vehicle, you’ll have to shell out cash for a moving truck and movers. A local move with some helping hands to load/unload might cost a few hundred dollars but a multi-state move with professional movers will cost several thousand.
Moving Boxes: Depending on how many you need to buy, moving boxes could run you in the low hundreds.
Additional furniture or household goods: If you are moving out of a group home or to a larger place, you’ll need additional furniture and household items. While there are ways to get these items for cheap or for free, you’ll likely have at least some additional costs.
Monthly Costs
When comparing apartments, it’s easy to focus exclusively on the cost of rent without factoring in other monthly expenses that could increase or decrease your housing budget.
Utilities: If you are moving to a larger or smaller place, your monthly gas and electric bills will change. Outside of that, some landlords charge separately for water, sewer, and even your share of the building’s utilities!
Pet Rent: Some landlords charge an additional $50-$100 per month on top of your standard rent if you have a pet.
Parking: Depending on where you live, you may pay an extra $100-$300 just to park your car at home.
Storage: If you are downsizing, you may pay an extra fee for storage in the building.
Amenity Fee: Some upscale buildings charge an optional monthly amenity fee to the gym, pool, lounge, or communal workspaces.
Commuting & Transportation Costs: If moving will either increase or decrease your transportation costs, take that into account.
How to Calculate Whether It’s Worth It To Move
To determine whether it’s cost-effective to move, add up all the one-time costs and divide it by the difference in your total monthly costs after accounting for all of the extras above. For example:
Upfront Costs (Not Including Security Deposit & First Month’s Rent) = $2,500
Difference in total monthly cost = $350 less
$2,500/$350 = 7 months
In this example, if you stay in the new place for more than seven months, you will be saving money. While the decision to move often isn’t solely a financial decision, it’s still helpful to have the full financial context.
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