4 hidden costs of your new neighborhood
Before deciding to move to that new location, make sure you know how much it will really cost to live there.
Residents fed up with high property taxes or expensive housing may be tempted to relocate to a home in a lower-cost region.
However, Teresa Luetjen-Keeler, president of Orella Moves and a certified relocation and transition specialist in Fanwood, N.J., says people who fail to do their homework may get burned.
"Whether you are moving by choice or by necessity, you should evaluate all the costs of relocating because costs vary a lot even within a metropolitan area," she says.
Before you move, weigh the following costs:
After housing, transportation is the second-biggest expense for most households, according to the Center for Neighborhood Technology in Chicago. Costs can be high whether residents drive their own cars or use public transportation.
"The first calculation when it comes to choosing a place to live should be this: You don't live your life in your home, you live it outside your home," says John McIlwain, senior resident fellow and J. Ronald Terwilliger chair for housing at the Urban Land Institute in Washington, D.C.
The center developed the "H + T Affordability Index" to address the link between housing costs and transportation costs in more than 300 metropolitan regions.
While homeowners generally are urged to keep housing costs to no more than 31% of income, the center estimates that combined costs of housing and transportation should not exceed 45% of income.
Many home shoppers budgeting for a new home weigh their monthly payment, taxes and insurance, "but they don't always estimate their transportation costs," says Scott Bernstein, the center’s president.
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"Many people opt to 'drive until you qualify,' driving to neighborhoods where the housing costs are lower, not considering the transportation costs associated with living far from their jobs," he says.
McIlwain says it's a mistake to think of transportation costs purely in terms of commuting.
"For every five miles that the average person drives, only one mile is for commuting," McIlwain says. "People need to think about the compactness of their neighborhood, how far they need to drive to reach places like the grocery store, school and medical offices."
Taxes are especially important when comparing the overall cost of living in one area to another.
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"Property taxes will be estimated on each home listing, but everyone should also review sales taxes and state and local income taxes," Luetjen-Keeler says. "Some states also have personal property taxes on items such as cars and boats, which can add to the cost of living."
Bankrate provides a list of state income and sales tax rates.
Insurance and utilities
Luetjen-Keeler recommends that people contact their insurance agent to receive an estimate of the costs of car insurance and homeowners insurance in the new location. People moving to a flood-prone or tornado-prone area may find they need additional hazard insurance.
Car insurance costs depend not only on the car and driver, but also regional theft and accident rates.
Utility costs also can vary from region to region.
"Utility costs have a lot to do with the size of the property and the energy efficiency of the design and the systems," McIlwain says. "The best way to estimate them is to get copies of the utility bills from the owners."
Even the cost of basic groceries and medicines can vary from place to place. To compare these costs, try Bankrate's cost of living calculator by entering income and location along with a new location. This will give you an estimate of the cost-of-living difference.
For example, someone earning $200,000 in Washington, D.C., would need 30% more income to maintain his or her lifestyle in New York City. By contrast, that same D.C. resident could earn 33% less in Dallas and still maintain the same lifestyle.
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Homeowners association fees are another variable cost.
"It's very important for people to know what the fees are and what they cover in terms of amenities and maintenance," Luetjen-Keeler says. "You need to look at the association's finances and ask about the rate of increase in fees."
Of course, costs are not the only factor in deciding whether or not to relocate, McIlwain says.
"I think the primary consideration should be quality of life," he says. "As long as they can afford to live there and still save for retirement, people should choose where they want to live."
My first home was a condo, I was so glad when I sold it, the monthly maintenance fees over the years escalated to be almost as high as the mortgage payment. The homeowners association kept increasing fees and kept promising to make repairs to the exterior. It was time to move before they were a total shamble. Most of the original owners had moved and were hanging on to the condos for rental income. When that happened the crime and drugs increased, one unit burned, there was a murder in another unit.
It was time to go.
I began looking for a small single family home. I took my time and did not rush. One of the things your article did not suggest was to talk to the neighbors where you are thinking about moving. They can be a wealth of information. They can tell you were the best: mechanic, plumber, electrician, grocery, school and especially restaurants are. They also can fill you in on things your realtor may not know. Things like how bad is the crime, are there any problem neighbors, are drugs being sold in the area. I highly suggest that people talk to prospective neighbors. No one wants to live next door to the screams of a wife whose husband is constantly abusing her. No one wants to have to chain everything down outside to keep the crackheads from stealing it. No one wants to come home from work and find their air conditioning unit has been dismantled for a few dollars worth of copper. These things happen even in a gated community. It pays to do a little investigation. I have very nice neighbors who maintain their homes.
More out of touch reality from Washington D.C.?
I beg to differ on the comment in the article about not actually living in your home or on your property. Who's speaking for whom? Who's out of touch? I surely hope it's not us here. We actually enjoy our home for what it is & should be. Our home. We actually live, eat, sleep, relax & entertain in our home. Too bad I guess not everyone is the same or has the same traits or values?
We take the time for the kids, garden, have friends & guests over, play games in the home & in the yard, watch TV & movies, listen to music, maintain our home. We actually live at home & enjoy it. While we're away, we always look forward to getting back home. Dull? Maybe, while we're sleeping?
Sure, we have transportation costs. But, those trips to work, other outside activities or shopping are generally clumped together to give us more time to be at home because we enjoy being together at home.
I truly feel sorry for people that can't take the time to enjoy being & feeling at home in the place where they live. To me, some in Washington sound out of touch & like they need some better quality home time?
One of the biggest factors to relocating that the article didn't mention up front is the possible trade off scenario & it's values.
Is the new area worth the peace of mind? Is it close to work? But, so what if it isn't. Do you really want to live next door to your place of business? It isn't always cracked up so well the way you might think. People may bang on your door or call you up at inopportune moments just because you are closer? A leisurely stroll to work might be nice. But, what's worth what when you're home is what counts for what isn't it?
Do you work to own a home or do you own a home to work? Do you consider driving a pain? Are ALL taxes & insurance premiums worth the commute? Where's the nearest fire plug or department? Medical offices or schools close by? Sometimes yes & sometimes no.
Good, not so good depending on your viewpoint and what will make you happy?
Want a piece of mind & a bit of privacy? A move out to the country may do? What's close by & what isn't should be a major priority when deciding that. Just like when moving anywhere else, everything is usually a trade off of sorts between what's important & what isn't.
For example, where's the nearest grocery store? Close by, no problem! Far away? A bit of a problem if you let it be one. One secret is to buy in bulk if you have the room to store 2 weeks to a months worth of groceries & supplies will make like much easier. Not to mention saving fuel by purchasing most things in bulk. Another way is to stop of on your way when coming home from work or from other errands or outings when going home.
Yet something else to consider when moving out to the country is the increased amount of land you may have. You could plant a garden to subsidize your groceries. But, you may hate mowing? Hire someone else to do it if you don't want to or can't if you still want to live in the country? Maintaining a well & septic tank or trash disposal is yet another concern for country living. Some costs go up while others go down. There's always some cost involved with everything. Sometimes, it's just money and sometimes it's something else? Just another consideration to ponder?
The point is, most everything in life is a trade off of sorts. Just don't trade in or off true happiness for it. Especially, when concerning your own home. Some things are bearable while others are not.
Happiness is the key. What is it that makes it is sometimes the biggest hurdle. Taking time for real thought in making those things happen to make yourself happy is just the path towards it?
City or country life is fine if you know how to handle & cope with it. A bit of foresight & homework to overcome the sometimes bumpy obstacles hopefully comes with time & experience. Just try to find a place that you can come home to & feel happy.
These are great tips! Overall our move from the Baltimore Wash DC to the Atlanta area paid off. The job is in the burbs and we now live on the edge of the 'burbs and ruralness. Good commute. Everything listed in this story came down in price. And our direct families are around the corner. Good move for us.
However, using an example of someone who makes $200K in DC represents someone who is still very wealthy. 33% down for Dallas, this person still is a pretty high roller. This isnt a good example of a person who represents Middle Class America.
Do your checking!! We moved from San Antonio, TX to the Panhandle of Florida due to a job change for my husband.
The 5% increase that he recieved was not enough to cover the increase in everything, plus while the economy is tight everywhere-there are no jobs here unless you want to be in retail, hospitality or foodservice!! So we've been with one salary for a year!!
My advice to everyone is to check everything, from A-Z then check again make sure the move is worth your while...