Renting a new place? Here’s how much it will cost to move
Moving costs can add up fast. Before you sign the lease on your new place, you’ll want to plan and prepare for expenses such as background and credit checks, security deposits and whether you’ll hire professional movers. These tips can help you calculate costs ahead of time.
[Visual of TITLE: The true cost of moving to a new place]
[Visual of another Better Money Habits video, “The true cost of renting a place”]
So in another video, we figured out roughly what we thought we could pay per month for a place after putting together our additional expenses. So, let’s stick with these figures which were based on a $1,000 budget from which we subtracted $225 for general housing expenses leaving us with $775 for rent.
But when you’re looking at getting a new place, there are also a variety of one-time move-in costs to take into consideration. Keep in mind that in this example, we’re going through all the potential costs you might encounter, so it’s likely that some of these might not apply to your situation.
[Visual of magnifying glass going over a person’s credit profile screen]
Before you’ve even gotten a place, you may have to apply for the apartment. Most landlords will want to do a background and credit check. Credit checks aren’t uncommon — you’ll need to get them any time someone wants to see how financially responsible you are. And they usually cost around $50.
[Visual of check paystub, letter of employment, and assets sheet. A red checkmark covers off all these.]
They might also want to see copies of recent pay stubs, a letter of employment from your work place, and proof of any assets you might have, like a savings account.
[Visual of LEASE AGREEMENT]
[Visual of boxes being cleared out and broom sweeping]
Once the landlord approves your application, they’ll probably want you to commit to a lease that can be anywhere from six months to two years long—and they often ask for the first and last month’s rent up front. Why do they need the last month? It assures the landlord that you won’t leave abruptly without paying before the end of your lease. If you do, at least they’re covered for a month to clean the space and find a new tenant.
So if this rental is $775, first and last month’s rent is going to equal $1,550.
Some landlords will also ask for a security deposit equal to a month’s rent on top of that. This deposit is to ensure that you’ll leave the space in the condition that you found it. If you leave the place undamaged, you should get this deposit back when you move out.
So that’s another $775 for the security deposit.
[Visual of calculator screen totalling “$2375”]
Now you may be able to find the place on your own, but if you need help, especially in an area where the housing market is competitive, you might want to work with a real estate agent, which may mean that you’ll need to pay the real estate agent’s commission. This can be ten percent of the annual rent, but it can be negotiable.
[Visual of real estate agent woman standing in front of cityscape]
So 10 percent of the annual rent is going to be $775 times 12 months, that’s $9,300. Ten percent of that will be $9,300 times 0.1, which is 930.
[Visual of calculator screen totalling “$3305”]
And, when we look at this all together, it looks like we’ve got a total of $3,305 that you’d have to pay up front before you even move in.
Now that’s not all, we also need to take into consideration the cost of moving.
[Visual of couple standing in front of a moving truck]
If you’re moving across town and have a few friends who are willing to work for pizza, you could be looking at just a hundred-dollar truck rental for the day. But, if you’re hiring movers to load and move your stuff, it’ll be more.
[Visual of movers with boxes and price tag. Then, visual of moving truck traveling over USA map. Price tag number increases to $2,500]
Most movers’ fees are based on the distance you’re moving and the weight of your items. So if you’re moving far away (and have a lot of stuff), you could pay as much as $2,500.
[Visual of website with 3 price tags reading “$100” $1,285” and “$2,500” with small, medium and large boxes]
Many moving companies offer free estimators on their websites, which you can look at to compare costs when figuring out what might work best for you.
As you can see, in this example, you’ll want to have saved up some money well before you start looking for a place. But depending on where you’ll be renting, your move-in costs will differ…And though this may seem like a lot, your own move-in costs may not be so high.
[Visual of “Monthly expenses” and “Move-in costs” numbers going down. It reads in total: $575 Rent and $2,565 Move-in costs]
But, you may look at your move-in costs and what you’ve got saved and decide you want to look at cheaper rentals to offset some of those initial costs.
[Visual of computer screen on left and pie chart on right. A piggy bank with cash appears above.]
Whatever the case, by doing some research, figuring out your monthly budget for a rental…and what you’ll need to have saved up just to move in, you’ll be better prepared to choose a place based on your own budget.
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