Planning to move out of your family’s home for the first time? Congratulations! It’s a big step into a new, more independent life. Priority one: have fun and fully enjoy this exciting time.  And keep in mind that you are uniquely empowered now, the choices you make will set the stage for the things you’ll be able to do later. 

Being a first-time mover may bring questions, and they should. This step is as much about independence as carving your name into life, and it pays to do it right. Moving from home puts additional responsibilities in your name. If you don’t start this journey on a solid foundation, you can damage your credit score and reputation, leading to issues with renting or buying future places you love. What you do now follows you to your next place, and then the next, all the way to buying your home. Ah, adulthood. (Believe us, it’s worth it.)

We’re Bellhop, and our one job is making sure that moving to a new home is a hassle-free experience. We spend a lot of time figuring out how to make the relocation process smarter and easier, and we’re going to share what we know with you.  We even offer an additional guide list of moving steps for free. More on that at the end.

Know When It’s Time to Move Out

Are you nervous about the move? Maybe the time isn’t right. Here are some questions to ask yourself to determine if you are doing the right thing:

Am I Financially Ready for My New Life?   

Moving out does wonders for your personal life, but can you afford adult life? If not, reconsider moving until you do have the funds to enjoy your new social life without imploding your quality of life.

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What funds will you need?  Read on to find out!

Am I Emotionally Ready to Move Out?

Independence means new responsibilities. Do you have the maturity to deliver on them? Each place you move to asks for histories and contact information of where you were before, and if your history isn’t great, you could negatively affect your credit and standings with landlords or home sellers.

Does the Desire to Move Out Feel Temporary?

If the reasons seem temporary, consider delaying the move until you feel the timing is right.

Are You Doing It Because Your Friends are Doing It?

Even though your friends are independent, moving out may not be the right choice yet. Their motivations and income may be different than yours.

Are You Doing It to Be with the One You Love?

If your significant other wants you to live together, think this through. Moving together may be fun, but unless the relationship is strong and enduring, you may need to move out sooner than you think.

Do You Have Realistic Expectations?  

If you do a shop and don’t like what your income affords, you may prefer to wait until you have the funds you need.

What is the Best Age to Move Out?

Is 18 a good age to move out?

Many people say the best age to move out is 25 or 26 since you have stable employment and are ready for the responsible, but don’t let those numbers throw you. Many people move out at age as young as 18, whether they are entering the workforce early or living closer to college.

Have a Steady Monthly Operating Income

It is best to have enough money to cover your expenses, maintain financial security, and fulfill your legal requirement of paying rent or mortgage payments (that’s right, it’s a binding contract). This means you should have some sort of reliable monthly income. The last thing you need at this time of your life is the stress of immediate financial issues like credit card debt that can lead to crippling debt and negatively affect your credit score. Once you have a reliable operating income, you can choose where and how you can live and sleep better.

What You Need To Know About Renting

Renting or leasing requires that you legally and financially secure your new place. You will need to fill out a rental application with an address form for contact information. The landlord will run a credit report to gain your credit score, and you may need to pay a fee for them to run i ($15).

If accepted, you must sign a lease and pay initial funds, such as the first month’s rent and security deposit (typically of a similar amount). You will later have the security deposit returned to you if the location is clean and in good condition when you leave, though you may need to pay for minor repairs and a cleaning fee.

If you are asked to pay a blend of first and last month’s rent plus a security deposit, be sure to check that this is legal/typical for the area. Also, you may need to pay a pro-rated rent amount if moving in on a day different than the designated move-in day. Some cities also require working with a broker, which will require a fee. 

Understanding Rates in the Housing Market and Rental Market: What is a Fair Market? 

If you plan to rent an apartment, condo, or family home, check out the price for rental properties in your desired areas. This comparison is called a cost of living index or a rent trend analysis. 

How are the rates determined? The rental prices from an individual owner or property management company are used to cover the owner’s property investment, including their housing payment and property taxes, but the price is also geared to bring the highest rate of return to later sell the home or create passive income.

Keep in mind that the cost of living will change in different cities, affecting the median rent.  An apartment lease price will vary depending on factors like:

  • Location
  • Quality of residence
  • Number of rooms
  • Features like apartment gyms and pools
  • Other design benefits, such as an apartment patio

You will find that rent can get pricey, and no areas are the same. Also, a fair market isn’t certain because the value is determined by what the market will bear. You may need to change your outlook or your budget to make everything work, and if you have to adjust your ideal location to fit your budget, do it. You don’t want to live hand to mouth.

Also, keep in mind that in the rental market, many property owners increase rent annually, so take a look at market trends and other market dynamics. And keep your career growth in mind to pay for any increases.

When doing your apartment hunt, look at sites like apartments.com, Zillow.com, and rent.com, and make sure you have plenty of time for a thorough search. The more you know, the smarter your choice will be.

The Better Way to Move

Renting Family Homes

The same general process works for family homes. Whether you rent it yourself or look at shared homes, pay special attention to the price of water. It can add up, so be sure to ask the homeowner the typical price or check with nearby homes.

Property Investment: Gaining Rental Income Through a Mortgage or Buying a House with Cash

If you have enough money to take out a mortgage on a property or even pay cash for it, you can do a real estate market analysis on sites like Zillow.com, Realtor.com, and Trulia.com. and consider working as a professional property manager by leasing some of your property to tenants to generate rental income. Keep in mind that leasing isn’t factored into your mortgage approval on your first home, but you can still use renters to create a faster payoff and passive income.

Some things to keep in mind when buying are:

  • Rental property depreciation
  • Capitalization rate
  • Property classes
  • Property tax deductions

Having strong communication skills, interpersonal skills, and conflict resolution skills helps ensure reliable renters.

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Figuring Out Your Moving Costs

You may need to hire a moving truck and, if you don’t have enough friends on hand, may need help with movers as well. Bellhop can provide any level of service to fit your need. The more services you use, the less stress you’ll have during your move. We also offer an easy-to-follow list of steps to make the moving process a piece of cake. You won’t miss a thing. Lastly, here’s a few tips on how to compare moving company quotes.

How to Manage the Cost of Living

It’s all on you now – you need to cover your expenses, maintain financial security, and fulfill your legal requirement of paying rent or your mortgage (it’s a binding contract, so you can’t just wander away and start over if this doesn’t work out). So you need a reliable monthly income, and a budget to keep you on track.

If you plan to rent an apartment, condo, or single family home, check out the price for rental properties in your desired areas. This comparison is called a cost of living index or a rent trend analysis. 

How are the rates determined? The rental prices from an individual owner or property management company are used to cover the owner’s property investment, including their housing payment, insurance and property taxes, but the price is also geared to bring the highest rate of return to later sell the home or create passive income. Rent typically goes up when the lease ends, sometimes the rate of the increase is controlled by the city or state, or the landlord determines the increase based on their costs and the current trends in your area. If you rent something you can barely afford now, you may have a problem when it’s time to renew the lease. If you anticipate staying in one place for a while, give yourself a little financial wiggle room, if possible.

Sometimes, you may need to live just outside of your dream city or neighborhood to find a place you can afford without scrimping on everything else that you need. If you have to adjust your ideal location to fit your budget, do it. Neighborhoods that have a lot of students or young couples just starting out tend to have more things to do, more affordable restaurants, grocery stores and shopping, and all the stuff you need to make living on your own easier. 

When doing your apartment hunt, look at sites like apartments.com, Zillow.com, and rent.com, and make sure you have plenty of time for a thorough search. The more you know, the smarter your choice will be.

Once you’ve found your new home, you’ll probably need to get your utility accounts set up. Typically, you’ll be asked to provide a deposit of about one month’s estimated service costs. This may be returned to you after a year or so of paying on time. If you are regularly late paying your bills – especially if you get a turn off notice or ask for a payment plan – utility companies may tell you that you need to pay a larger deposit to maintain service.

How to Budget Wisely

Don’t rely on credit to help you afford basic needs. You really want to keep your card active, spend less than 30% of your available credit monthly, and pay off your bill in full each time. Try to avoid carrying a balance, and if you can’t pay the whole thing one month then pay it off as soon as possible. Credit card debt can spin out of control fast, and negatively affect your credit score for years to come. 

Budgeting is easy. List the cost of your basic expenses: rent, utilities, loan payments, whatever else you have to pay monthly. These are called “fixed costs” even though some of your expenses may vary based on usage (like your electricity bill). 

Subtract the amount from your monthly income. Then, figure out how much you can spend on food, entertainment, travel, etc. from the amount you have left over. 

Try to save a set sum each month to add to your emergency fund, and once you have at least three months (six months would be ideal!) of living expenses in your fund, start saving for the other things you want. If you want professional guidance on money planning, you can often find a financial planner at your bank/credit union, at school, or perhaps through your parents. Or just ask someone who seems to have their financial life organized for tips on how you can manage your money. 

Start building an emergency fund now if you haven’t already. It’s good to have three months of living expenses saved up, and six months is even better. You also want to have some additional money saved to cover unexpected expenses, such as car repairs, medical emergencies, and other issues. 

Understanding Credit Scores

Do keep an eye on your credit score. This number that sums up your credit history and is important for your first rental and each rental after. It is especially important when applying for a home loan. The higher your score, the lower your mortgage rates or closing costs. In fact, your credit score matters for every large loan you take – including car loans. A good credit score can save you significant money for big dollar loans.

If you haven’t had a credit card or taken a loan such as a car loan in the U.S., FICO will most likely start you at a score of 300. Your score increases as you pay your rent and credit card payments each month. A stellar score is usually over 700 and can go slightly above 800. The higher it is, the less you pay for loans on expensive items like homes and cars. Regularly check your score to ensure there are no mistakes in the history. If there are any issues with your credit cards or scores, file a dispute.

If a potential landlord has concerns over your credit score, you can have your parents cosign, but be careful because if anything happens to you financially and you can’t cover your rent or damages, they will be liable. You can also offer to pay an additional deposit upfront. 

How to Know if Renter’s Insurance is Worth It

If it would be hard to replace your stuff if it is stolen, damaged, or lost in a national disaster, consider getting renter’s insurance. Some leases actually include that as a stipulation. You pay a low fee monthly (renters insurance tends to be very affordable) for peace of mind. Check the policy carefully though, some things (especially expensive things like computers, musical instruments, tech stuff like your big monitor or a classic camera, etc. ) may not be covered by a basic policy. Sometimes you can add coverage for additional items to your policy. You may need to keep invoices, photos/videos, and an inventory of what you have in case you need to file a claim. And you may not be protected for all disasters – floods and other “acts of god” may not be covered. 

Pick Your Parents’ Brains About How to Adult  

Now that you know the basics, check with your parents for advice. They have been doing what you are about to do for years, if not decades. They can also tell you what their transitions were like to help soften the blow and even help set up things like your utilities, etc.

Parents are often especially good sources for understanding insurance, how to install and repair items, and how to maintain and furnish your new apartment or home (cleaning products, tools, etc.) If your parent lacks expertise on a particular topic, they probably can steer you to someone else who can help.

Get Ready to Go!

You’ve found your new place, you’ve budgeted, and come up with a plan for your new life. Now its time to make the actual move. As you may have already guessed, that’s where we come in. Call us, email us, chat with us – we’re here to help make your move easy! We’ve got you!

Nick Valentino