If moving is in the cards for you over the next six months, the time to take a look at your finances is now. Whether you’re moving to a new apartment in the same ZIP code or across the country, one thing is certain — moving is expensive.
Having your finances in order will not only help you budget for your move, but it will help you confidently navigate your apartment search and the move itself.
Take a look at these eight helpful tips to help get your finances ready for your future move.
1. Get Real About Your Finances and Financial Timeline
Once you decide to move to a new apartment, it’s important to take an honest look at your financial situation. If you’re in good financial standing and have a regular budget, you maintain, moving right away may sound like an optimal plan. Or, if you’re working on improving your credit or following a new budget, you may want to plan for up to three to six months.
Before you start scheduling in-person apartment tours or filling out apartment applications, ask yourself two questions:
- What is my current financial standing?
- Is there anything in my financial history that needs to be taken care of?
Plan a financial timeline to coincide with your new apartment move based on these answers. For those looking to improve their financial standing or those simply wanting to save a few extra bucks for the move, work towards building a savings moving fund (ideally with three months of household expenses saved).
2. Stay on Top of Your Credit
Since many landlords and property management companies rely on credit checks when it comes to looking at potential tenants, it’s important to know your credit score ahead of time.
Use services like Credit Karma or FreeCreditReport.com to stay on top of your credit. Experts recommend monitoring your credit monthly. Currently, you can get up to six free credit reports each year — so take advantage of this.
Good credit can help make finding and moving to a new apartment easier. If you’re trying to keep your credit score in good standing, prioritize paying your bills on time. With 35 percent of your credit score impacted by on-time bill payments, staying consistently on time can help maintain and improve your credit and payment history.
3. Budget to Get Into Your New Apartment
Plan to spend no more than 30 percent of your income on rent. However, with competitive markets across the country — it’s important to know that skyrocketing rent prices are becoming more and more common. To help you figure out exactly how much you can afford in rent, use Rent.com’s free online rent calculator.
To get into a new apartment, create a budget that will account for the additional moving expenses that your landlord or apartment complex will require. These are the most common upfront costs you’ll need to put out when you sign a lease:
- Security deposit
- First month’s rent
- Last month’s rent (while common, not all landlords or apartment complexes require this)
- Pet deposit
Additionally, if your rent is increasing from what you currently pay — make sure it falls within the 50-20-30 rule if you can. This rule means you spend 50 percent of your net (after-tax) monthly income on necessities like rent, utilities, and transportation, 30 percent on entertainment, hobbies, and recreation, and 20 percent on savings.
If you don’t have much squirreled away for these additional moving expenses, put a financial plan in place and give yourself a timeline. This way, you can start working on saving for your move within your current budget.
Once you’ve moved into your new apartment, you should only have to worry about paying your monthly rent, utilities, and if necessary, any miscellaneous expenses outlined in your lease.
4. Account for Your security Deposit
Whether you’re moving into an apartment complex or renting a condo, most apartment communities and landlords require a security deposit.
Besides being a pesky additional expense for moving into a new apartment, security deposits protect landlords and their properties in case damage or serious loss occur.
Security deposit amounts vary. Frequently, landlords will set the deposit to equal one month of rent. Depending on where you live, some states have security deposit caps, and others have no maximum for the deposit.
Although the security deposit may increase your financial output for the move, don’t fret too much — they’re refundable (if you take excellent care of your rental).
5. Decide How Much You’re Willing to Spend on Application Fees
Regardless of what apartment you’re moving into, most landlords require potential tenants to fill out an application form for consideration. To ensure that you’re serious about the apartment, applications usually come with a fee.
While most application fees are between $20 to $50, it’s not surprising to run into application fees that run upwards of $100 or more.
So you don’t go overboard looking at apartments and spending money on application fees, sit down and figure out how much you’re willing to pay in apartment fees when you make up your mind about moving to a new apartment.
In addition to the application fee, most applications require the following information:
- Applicant’s full name
- Current address
- Phone number
- Date of birth
- Social Security number
- Drivers license number or any other government-issued ID
If you’re applying for an apartment in-person, make sure to bring a form of payment for the application fee if you want to showcase how serious you are about the space.
6. Plan to Show Proof of Income
Once you find your dream apartment and your application is approved, a landlord will want to make sure you can pay your rent before you sign a lease. To understand your financial situation, most will ask you to provide proof of income.
To proactively be one step ahead in your leasing and moving process, go ahead and put together a folder of important financial documents to have easy access to the documents you need.
What is Proof of Income?
Proof of income can look different for each landlord. Some landlords may ask for various methods (like a W2 and pay stub), and others may only require a credit check or bank statement. These are the most common types of proof of income:
- Pay stubs
- W2s and tax returns
- Bank statements
- 1099 tax forms
- Profit and loss statements
- Contracts or invoices
- Retirement savings statement
- Social Security statement
- Unemployment benefits statement
- Worker’s compensation details
- Statement of severance package
- Annuities, interest, and dividends
- Credit checks
Expect every landlord or property management company to have its own proof of income requirements. Don’t worry about providing original documents, though — most landlords and apartment communities will accept copies.
7. Budget for Moving Day
Once the lease is signed, and your future move is in the works, it’s important to plan for the move itself. To start financially planning for your move, ask yourself the following question: On moving day, do you want to move with the help of your friends, or do you want to hire professional movers?
Depending on how you answer that, plan your budget accordingly. Additionally, don’t forget to factor in these moving expenses:
- Bubble wrap
- Mover’s stretch wrap
- Mattress covers
- Packing paper
The DIY Move
Moving yourself requires a lot of work. Are you physically up for the challenge? Do you have available friends that can help you with the heavy lifting? Will you need to rent a moving truck, or can you fit your belongings (including furniture) in a friend’s van or SUV?
In addition to the physical move itself, if you’re going to DIY route — plan to budget for the following:
- Renting a moving truck or large vehicle
- Renting moving tools like a hand truck, dolly, or cart
- Gas (for the rented car or your friend’s vehicle)
If you use friends to move you, make sure you treat them to pizza and beer or offer up a token of your appreciation. Any friends that want to help you move are friends you want to appreciate and keep!
The Professional Move
If you want to avoid heavy lifting, hiring professional movers to get you moved into your new apartment is the ultimate way to go. When you decide to hire movers, look for reputable moving companies (preferably moving companies with good word of mouth recommendations — ask your friends and coworkers). And whoever you end up booking with, make sure they are licensed and up to date on their insurance.
To help you budget for your professional movers, get as many estimates and quotes as possible. These factors will help determine how much it will cost to use professional movers:
- How far will the movers travel?
- How many rooms need moving?
- How many specialty pieces need moving?
- The total weight of your possessions
One novice mistake that renters often make when hiring movers is not finding out what constitutes as extra for a move. Make sure to clarify this with the moving company. For example, if you’re moving into a fifth-story walk-up, they could charge you extra because of the stairs and floor location. Fragile items like glass display cases, chandeliers, fish tanks, and art may also require an upcharge. And, of course, if you need a large object moved, like a piano, prepare to pay extra.
Last but not least, if you use movers — make sure to tip them.
8. Keep Miscellaneous Expenses Top of Mind
While it’s a lot to keep up with application fees, security deposits, first month and last month’s rent, and moving expenses, don’t forget about miscellaneous expenses. Before moving to a new apartment, spend time getting estimates for your new utilities. If you’re using the same utility company, this is a great time to try to negotiate a better deal.
Suppose you’re moving into a house that requires lawn maintenance (and you’re responsible for it), factor in this new cost. If your new apartment requires renters insurance, include this in your new monthly budget.
Make Smart Money Moves Now
While it’s exciting to move into a new apartment, it is often stressful getting into that new apartment. Just remember — the more proactively you stay on top of your finances, the easier you’ll make it on yourself when it comes to finding your new dream space.
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This article was produced and syndicated by Wealth of Geeks.
Featured Image Courtesy of Deposit Photos.