Better to move somewhere cheaper or stay where we are?
Our rent is 1400 a month right now. There's an opportunity to move into a similar sized place right down the road with a bigger yard that is 1200 a month. However, we'd be breaking our lease, which forfeits our current security deposit of 1400. Plus we would need the security deposit for the new place, which is equal to 1 months rent, and any costs associated with moving, like a rental truck and time off from work to move. My husband and I are undecided on which is better. The yearly savings would be 2400 but we would be forfeiting the 1400 security deposit and having to put down another 1200. The second security deposit would be refundable eventually when we moved out, of course. We just can't decide if it's better to do this or not. Any financial advisors out there who might shed a light on it?
- conley39Lv 78 months ago
It depends on how long you'd end up staying in the new place. It would take you 13 months just to break even not including the moving costs. If you would be in the new place for two years or more and can afford the immediate expenses, then move. If you'd only be there a year, it isn't worth it.
- TiLv 78 months ago
There is no guarantee that you will get the 2nd security deposit back, and there is no guarantee that your 1200 per month rent won't increase in another year.
1400 + 1200 = 2600 plus moving costs. Unless the bigger yard is important to you, stay put.
- roderick_youngLv 78 months ago
Is the new place better in some way other than money? Moving is a lot of trouble - not only packing all your stuff, moving, then unpacking it, but also changing address on every place you do business with. If you have internet service, cable TV, etc., then shutting it down and moving it to the new place. I would ask myself, would I still move if the new place was *more* expensive? Only if that answer was yes, would I move. At the very least, I would wait for my present lease to end, even if it's a year from now. There WILL be other places available after that time.
- DEBSLv 78 months ago
You've done a good job with the analysis. The other factor that you need to take into account is time. How long do you see yourself at the other place? If it's 2+ years, then this sounds like a good financial move. If no more than one year, then the math is pretty straight forward.
U-haul is typically a no more than a couple hundred at most (likely less).
I don't know what your wages lost will be. At $20/hour that's about $160 for an 8 hour day, but take out your taxes and that's less than $150. (These last two I'll just tag at $200 each for simplicity. That's likely high in total but will account for some of your 'extras' you'll end up buying at the new place.)
So total up front one-time reductions in money are $1,400 + 200 + 200 = $1,800. I don't consider the $1,200 something to take into account from a savings standpoint. It's a deposit and something that has to be paid, but you've already accounted for the fact you're losing $1,400 at your existing place. So.....
1 year: 2,400 - 1,800 = $600 saving
2 years: 4,800 - 1,800 = $3,000 saving
3 year = $5,400, 5 year = $10,200
For me, if I liked the other place and planned on being there longer than a year, then this is a no brainer to move, and if you're planning on renting for a long time, this is extremely attractive.
Note: Before you make a decision, make sure you are 100% certain what you'll be paying if you break your current lease. State laws vary but most say you are on the hook until the end of your lease or until the landlord finds someone to take over the place (whichever is first). Your lease typically is allowed to lay out something different which might be what you've already researched and know.
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- sunshine_melLv 78 months ago
If you break your lease, you don't just forfeit the deposit - you are potentially on the hook to pay the rent for the duration of the lease.
It would probably be better to wait until your lease is up then moving to somewhere cheaper.
- ANDRE LLv 78 months ago
You also have failed to include what it will cost you to move your stuff between the two properties.
Unless you have a commitment from the new landlord that you can stay there for at least five years and that the rent will only at most have very small cost of living increases, this is not worth doing.
- SlumlordLv 78 months ago
Since you are breaking your lease the landlord could also sue you for more rent (might get another months worth in court of might get nothing more) and at the least give you a big blemish on your credit. Stick it out, with possible other costs and harm to your credit you are probably better off waiting until the lease is up to move.
- OwlTradingLv 78 months ago
talk it over with the landlord first
- StephenWeinsteinLv 78 months ago
You're saying it's going to cost you as much as you save in two years. And you don't know how long the new place will be cheaper. When the first lease expires, they might raise the rent to as much as it is where you are now, so you might never save enough money in rent to make up for what you would spend if you moved.
- 8 months ago
yeah i know what you meaen