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Becoming Financial Prepared to Move

Becoming Financially Prepared to Move - Ready to move out on your own or with friends? Searching for an apartment can be no easy task. You need to prepare before you decide to locate your first apartment

Ready to move out on your own or with friends? Searching for an apartment can be no easy task. You need to prepare before you decide to locate your first apartment. Unfortunately, individuals who move out before being prepared often have to return home due to unforeseen circumstances. Here are some steps to ensure you are fully equipped to move out on your own.

Determine Affordability Before You Move

According to several financial gurus, your monthly rent should not exceed 20% to 30% of your monthly net income (not gross).  Additionally, keep in mind that most landlords require that tenants’ make at least three times the monthly rent. Of course, you may live in an area where paying less than 30% of your income towards rent may not be possible. In this situation, you should try to get as close to the 30% margin as possible. For example: If you net (bring home) $4000 a month, then your monthly rent should be from $800 to $1200 a month.

Once you determine your monthly rent create a budget detailing your income and expenses (see my post Budgeting 101 on Thursday) to determine if you can afford the move. Don’t forget utilities (water, gas, electric, cable, phone, renter’s insurance, etc.). While you may locate an apartment that pays some utilities, quite often they won’t pay them all.

Preliminary Search

Complete an initial search of the area where you think you want to live. I recommended making a list of three areas: dream location, and two alternatives. Once you have determined locations, make a list of essential amenities (Needs and Wants). Most popular apartment amenities include:

PetLaundryKitchenOtherRecreation
PetFriendlyShared Laundry RoomDishwashersWifiFitness
Dog ParkWasher/dryer in unitHigh-end appliancesHigh Speed InternetPool
Large DogLaundry ServicesUpdated Countertops & CabinetsCable & Satellite TVCommunity Center
No breed restrictionsOnline paymentJogging/Walking/bike path

Once you have the areas and the amenities you wish to have, it is time to conduct that preliminary search. Completing this search will tell you if you need to revisit your location and possible list. Quite often, we set out to locate an apartment in the dream neighborhood only to discover we can’t afford it alone. In these situations, you must decide if you are going to get a roommate or choose another location.

Be Prepared to Move

Let’s say that during this search you locate some apartments you absolutely love, but the move in cost terrified you. Here are some ways to make sure you prepared to move within three months to a year.

  1. Start to put aside money for the first rent, down payment, and moving cost. Add this money to your budget and start saving
  2. Credit Check – Most apartment complexes will run your credit. Your credit score can determine your down payment at the least and ability to pay your rent at the most. Sign up with a credit monitoring service and pull a free credit report to check your credit. The apartment complex will provide you with the company they used to qualify you, and you will be able to get a determination letter (results) from them.
  3. Savings – It is best to have enough money saved in case of an emergency (at least $1000), and to have enough saved to be about a month ahead of your expenses. I prefer to have at least one month’s’ income saved before moving out.
  4. Renters Insurance – Start making inquiries about Renter’s insurance. If you are paying car insurance, it can be easily added to your current policy. If not there are companies where you can purchase renter insurance. Most apartment complexes recommended it, if not require it.

Getting ready for your first apartment can be exciting, and if you aren’t adequately prepared, it can be a financial nightmare. Being patient,  and getting financially ready can ease you into the transition of living on your own. Come back next week where we will discuss Finding an Apartment and Avoiding Scams.

Becoming Financially Prepared to Move - Ready to move out on your own or with friends? Searching for an apartment can be no easy task. You need to prepare before you decide to locate your first apartment
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