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Are you planning to move out of your family’s home for the first time? Then congratulations! There’s no doubt about it, you are in for some fun. There are many reasons to live at home, such as saving money or helping with family, but now you will have independence, and the feeling is exhilarating.
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.)
There are ways of making the whole process easier while keeping you on firm ground. This article lays out 11 steps to start your new life right. And when you’re ready to make the leap, Bellhop is ready to help with your journey. We even offer an additional guide list of moving steps for free. More on that at the end.
Step 1: Know When It’s Time
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.
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.
Step 2: 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.
Step 3: 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:
- 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, 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.
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.
Step 4: Understand Your Budget Inside and Out
How do you move out of your parents’ house financially?
Here is what you should account for financially. When creating your budget, particularly for expenses, practice it at home for a few months to ensure it is realistic.
Understanding Rental Properties: First Month’s Rent, Security Deposit, and Possibly More!
How Do I Get My Security Deposit Refund from My Landlord?
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 deposit, be sure to check that this is legal in the area. Some landlords may be breaking the law. 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.
On top of this, ensure you have enough money to cover a few more months of rent and expenses if you have any unexpected job issues.
If you use a moving company, such as yours truly, you will need to factor in costs for that as well. And any necessary furniture should also be budgeted. Everyone needs a bed, tables to write and work or even eat on, etc.
Step 5: Have Enough Money to Pay All Bills on Time and Protect That Credit Score
One item you will need to keep an eye on while adulting your credit score. This is a score that defines your credit history and is important for your first rental and each renal after. It is especially important when buying 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 lower you pay for loans on expensive items like homes and cars. Regularly check your score to ensure there are no mistakes in the history. Most importantly, pay for everything on time! Negative information will affect your score for seven years.
If you live with roommates, make sure those people are on the lease; otherwise, any late payments will affect your credit.
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.
Step 6: Know All Expenses and Be Ready for Unexpected Costs
Start compiling a personal budget. Factor in all your current living expenses by factoring all monthly cost and break totals into average monthly expenses. Make a list of two columns, one with fixed expenses – costs that are the same each month – and variable expenses – costs that will change each month.
You will want to look closely at your spending habits to create a realistic budget. If totals are too high, make adjustments to your monthly budget, but try to stay realistic.
Examples of fixed costs include:
- Utilities (note any upfront costs since you will also pay them in our new place)
- Service providers (Wi-Fi and streaming services)
- All loans (school, car, etc.)
- Insurance (car and medical)
- Car payments
- Gym membership
- Transportation cards (bus, subway, or rail)
Some popular variable costs are:
- Annual gifts (birthdays and Christmas)
- Other fun activities
- Monthly payments in the stock market
- Gas for your car
- The cost of repairs for your car
When compiling the list, keep in mind how often you purchase variable expenses since things like clothing and coffee can add up if not paying attention to it. With variable costs, you may be surprised how much you actually spend and how it affects your final budget.
When moving, almost everything you will do will cost you money, including running a refrigerator. At home, many costs may be handled for you. You’ll need to know what to expect, and how much money you’ll need for them. And as you plan your move, save, save, save. You’ll most likely need it. If not, you may need it later on for other things.
Step 7: Consider Property Insurance
Natural disasters such as fires, floods, rain, and wind storms happen. When they do, many financial services can help repair or replace damaged items in exchange for a monthly insurance payment. This solution is especially beneficial if you have high-ticket items.
Step 8: Have an Emergency Fund in Place for Unexpected Costs
For unexpected costs, set aside your moving fund and start a new list to cover expenses for your move.
A good tool for understanding what you can afford is to take your cost of living (the total of all expenses) and multiply it by four. This total is what you should have on hand and set aside before moving. You’ll have some padding to pay for surprises and have emergency savings when issues arise.
After your move, maintain your emergency fund as much as possible and build it up to six months of living expenses later by setting aside funds from each paycheck.
Step 9: Account for 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. (link) You won’t miss a thing.
Step 10: 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 post office box, etc.
Parents are especially good sources for understanding insurance, how to install and repair items, and how to maintain your new apartment or home (cleaning products, tools, etc.)
Step 11: Plan the Big Move
When you are ready to move, this list of steps helps makes the process easy:
- Complete all your budgeting work
- Find a place that fits your price range
- Ask friends about the location and to know what the people are like. Is it a fun place? Quiet? Do other friends live nearby?
- Tour the unit or home and the surroundings to ensure it is safe and what you imagined
- Set up a move-in date with your new landlord
- Use our moving guide step by step. It covers everything, including what utilities to set up.