Whether you’ve just graduated or are getting back on your feet after a tough job search, leaving the nest is a big step. Moving out of your parents’ house and finding your own place is a challenge. But when it’s all over, the independence will feel great.
If you do still live at home, you’re not alone. By the end of 2016, a third of young adults lived with their parents. There’s no shame in it: if you can’t afford your own apartment while hunting for work, living rent-free is entirely practical. But now that you’ve spent some time building up your financial security, you’re ready to take the next step.
How can you find the perfect apartment? What do you need to do before you start your search? How much can you afford in rent? And how can you make the moving process as painless as possible? We’ll answer these questions and more in this definitive guide to moving out of your parents’ house.
Preparing to move out
Figure out your budget
Before you can decide how much you want to pay in rent, you need to take a hard look at your budget.
If you have a job lined up, congrats! Look at your most recent pay stub to figure out your take-home pay, which is the amount you bring home after taxes. If you don’t have a job yet, you should be cautious about moving out. Only consider a new home if you can comfortably cover at least three months of rent (plus move-in costs and living expenses) with your savings.
To figure out what kind of apartment you can afford, you’ll need to understand your cash flow. So if you don’t have a paycheck already, do some research to find out what sort of income you can expect from your desired field. Then, put together a list of your monthly expenses — the amount that you spend on food, gas, and recreation. A rent calculator can help you calculate how much rent you can afford.
If you need help organizing your budget, these money management solutions can help.
Decide how much you can afford in rent
Now that you know how much you make and how much you spend every month, you’re ready to decide what you can afford in rent. There are a couple of different ways to do this.
In general, it’s best to avoid spending more than 30% of your income on rent. As such, if you multiply your monthly income (or estimated income) by 0.3, you’ll get a pretty good idea of how much to spend in rent.
If you live in a city where it’s impossible to find an apartment that costs less than 30% of your income, then you’ll have to do the math on your cashflow to decide what you can safely afford. To do so, take your income (or estimated income) and subtract your necessary expenses. Remember to account for the following costs:
- Groceries. $50/week is a safe estimate.
- Transportation. Decide how you want to get around and calculate accordingly. Do you have a car? Look up average gas prices in your city to find out what you’ll spend. Will you use public transit? Find out how much it costs to get a monthly pass for the bus or train.
- Utilities. The cost of utilities will be lower if you have roommates to share the cost. A good rule of thumb is to estimate $75-$200 a month for the entire apartment.
- Retirement fund. If you can, it’s best to put away $50 or $100 of your paycheck into a retirement account every month.
- Cell phone bill. Expect to pay around $50/month. If you can join a family plan with your friends, you can cut this cost somewhat.
- Subscriptions. How much do you spend on services like Netflix, Hulu, and HBO Go every month?
- Recreation. Be honest with yourself about how often you like to go out for drinks or take weekend trips. Look at your bank statement and add up your recreational expenses for each of the past three or so months. The average of these figures is a realistic recreation budget.
Next, subtract another 10% from your income to account for surprise expenses like hospital bills or car repairs.
The remaining money will go toward your rent and your savings. Decide how much you’d like to be able to save every month, and what’s left over is the maximum that you should pay in rent!
Check your credit
If you’re moving into your own place for the first time, this may be your first time checking your credit score. Don’t worry about the cost. You can view your credit report once a year for free using AnnualCreditReport or other free services, such as Credit Sesame.
Ideally, you’ll want a number above 600. It’s possible to get an apartment even if your credit is fair or poor, but you may need a parent or guardian with good credit to cosign the lease. If no one can help you, it’s a good idea to work to improve your credit before applying to apartments.
Improving your credit
The two factors which most strongly affect your credit are your payment history and your credit utilization. As such, the best way to raise your credit score is to focus on these two factors. Try the following strategies:
- Pay your credit card bill in full every month and make timely payments on any outstanding loans.
- Get a new credit card and pay off your balance in full by the end of every month.
- Take out a small secured loan with a low interest rate and pay your bill on time every month.
- Lower your credit utilization by making sure to never use more than 30% of your available credit line at a time.
Maintaining a healthy credit history is a great way to improve your odds of getting approved for a new apartment. If you need help repairing your credit, the right credit repair company can help.
Moving is expensive! Typically, to move into a new apartment, you’ll need to give the landlord your first month’s rent, a security deposit, and (in some cases) the last month’s rent.
The average security deposit is equal or close to one month’s rent, but in some cases, it can be closer to three months’ rent. That means you’ll need to be able to pay at least three and up to five months’ rent out-of-pocket on day one.
Living rent-free with your parents is an excellent opportunity to save up an emergency fund. Living on your own is expensive, so it’s smart to establish an emergency fund before you move out. A comfortable emergency fund is enough to cover three to six months of rent and living expenses.
Finding an apartment
Now that you’ve set your budget, learned price range, whipped your credit into shape, and bolstered your savings, you’re ready to start house-hunting!
Finding your first apartment can be daunting. But if you take things one step at a time, you’ll get through unscathed. This first apartment checklist can tell you everything you need to find the perfect home.
Choose your location
The cost of living can vary dramatically from one neighborhood to another. Write a list of the areas that interest you, and then check them out at several different times of the day. Make sure that you’ll feel safe and secure in your home.
Besides just making sure you feel safe, you’ll want to ensure that you’ll enjoy living in this neighborhood, too. Are there cafes or places to go in the evening? If you have a car, is there ample street parking? If you don’t, are there accessible public transit stops? Use Google Maps to estimate how long your commute would be.
Finding the perfect home
Modern technology has made house-hunting a good deal easier. On Craigslist, you can use filters to search for the perfect apartment. By setting a maximum rent or maximum proximity from a specific zip code, you can find a place that perfectly suits your needs! Just be wary of scams. If a deal on an apartment sounds too good to be true, it probably is.
If you want to live with other people, you can also search Facebook for housing groups in your area. You can even look for groups targeting your demographic specifically. For example, there are a ton of housing groups on Facebook for women or LGBTQ house-hunters looking to live in a community in most large cities.
Use a real estate agent
If you’re struggling to find your first apartment, consider enlisting the aid of a real estate agent. These professionals are experts at finding and locking down rental properties for their clients. However, they do come with a cost. A typical rental agent’s fee costs 25-50% of the first month’s rent, but these fees can be higher in competitive housing markets like New York or Los Angeles.
To investigate this option, just search online for [your city] + “real estate agent” + “rental.” You should find a ton of different options.
Find a roommate or three
One of the easiest ways to save money on rent is to split the bill. Reach out on social media to see if any acquaintances or friends-of-friends are looking for a place or a roommate. Search for housing groups on Facebook to find more opportunities. Or use Craigslist to find groups of roommates who are looking to fill a vacant room.
Just make sure to vet any strangers carefully and make sure you feel 100% comfortable with them before committing to anything. Try asking the following questions:
- How do you prefer to relate to your housemates? Would you rather be friends or acquaintances?
- Are you more clean or messy? How clean will you keep shared spaces, like the kitchen and bathroom? Would you rather set up a chore rotation, or play things by ear?
- Are you a night owl or a morning bird? Will you want to set certain quiet hours?
- How do you feel about pets? Parties? Overnight guests?
Make sure that your lifestyles and schedules are compatible before you move in.
Locking down your new home
Know what it takes to get a lease
Are you prepared to sign a lease? If you are moving to a new city without a job, you might not be prepared to sign a year-long commitment. Most landlords will run a credit check before taking you on, so if you’re unemployed or don’t have strong credit from the get-go, you might need a co-signer.
If you’re not ready to sign a full-on lease, subletting is one option. However, because they’re short-term, sublets are often more expensive. You can also look for a month-to-month rental agreement, though these are harder to come by.
Read your lease or sublease
If you choose to sublet, get something in writing, and review your sublease carefully. If you go for a regular lease, make sure that you and your roommates read it thoroughly. Be sure to ask the landlord or broker about any points that seem unclear.
Some critical questions include:
- How long is the lease term?
- When is the rent due? Do you have a grace period of a few days, or will your landlord come knocking at 9 a.m. on the first of each month?
- Is there a penalty for not paying rent on time?
- Which, if any, utilities are included in the rent?
- Can you sublet the apartment if you go out of town?
- What’s the penalty if you want to break the lease early?
- How much money do you have to pay upfront?
- What are the rules for getting your security deposit back?
- Are pets allowed?
- Are small changes to the apartment (painting, hanging pictures) allowed?
Once you’ve signed your lease, you’re ready to move in!
The hardest part is over. Now all you have to do to move out of your parent’s house is just that — move out! We’ll walk you through each step to get you safely into your first apartment.
Document the state of the apartment
When you move in, snap photos of your apartment in its move-in state. Make a note of loose floorboards, dents in the walls, and other flaws. When you move out, you don’t want to get charged for damage you didn’t cause.
Is your apartment furnished or unfurnished? If the latter, you’ve got a big job ahead of you! When packing up your life, be sure to remember the basics. It helps to go room by room and think about what you’ll need in each part of your space. Everyone’s needs are different — for example, if you work from home, you may want a desk, and if you hate to cook, you may want to invest in a microwave. But everyone will need the basics. Start with the following necessities and go from there!
- Bedroom necessities: a bed and bedding, drawers, your clothes.
- Bathroom necessities: toothbrush, toothpaste, soap, shampoo and conditioner, toilet paper, and cleaning supplies.
- Kitchen necessities: pots and pans, forks and knives, cups and bowls, trash can and trash bags, sponges, dish soap.
Set up utilities
If you’ve never lived away from your parents before, you’ve probably never set up utility accounts!
Some landlords roll utilities into their rent or provide certain default utilities to all renters. However, most rental properties expect renters to set up their own accounts. There are three things that you’ll need to handle:
- Water and power.
- Internet and cable.
Setup for your gas, water, and power should be reasonably straightforward. For most cities, there’s a single organization providing water and power. If you google [your city] + “water and power” and [your city] + “gas,” you should easily be able to find these companies and set up an account.
Internet is trickier because you have a lot more options. Still, the process is mostly the same. You can research online to find out which internet providers service your area, and then check Yelp reviews to confirm that they provide a reputable service. If you want cable, many providers bundle internet and cable into a single bill. If you have neighbors in your apartment, ask them who they use!
Get renter’s insurance
Renter’s insurance can protect you against unforeseen disasters, like fires, wind storms, electrical surges, or water damage. While your landlord’s insurance will cover property repairs, it won’t cover any items of yours that get ruined, or your living costs if you have to stay elsewhere during repairs.
Renter’s insurance will also cover you if you experience a break-in. It even includes liability coverage in case someone gets hurt while in your home, or if you accidentally destroy someone else’s property. You can often add renter’s insurance on top of your auto insurance policy, or buy it directly from a broker.
Change your address
Last but not least: now that you’ve moved out of your parents’ house, it’s time to make things official. Luckily, this step is easy! Just head to USPS.com and let them know which day you want them to start forwarding your mail. Plus, don’t forget to change your address on your bank account, credit cards, etc.
Moving out of your parents’ house
Moving out can be scary, but if you take the process one step at a time, you’ll be living independently in no time. Just be patient, be prudent, and don’t commit to anything you can’t afford.
If you need help improving your credit score so you can get approved for an apartment, check out these credit repair companies. Or improve your payment history with a brand new credit card! Once you’ve got good credit and a healthy savings account, you’re ready to take this big step toward independence.