Now that working remotely is a long-term possibility, many Americans no longer need to live in the city where their employer is located. As a result, many workers are fleeing from some of the more expensive U.S. cities.
In San Francisco, for example, enough people left that the median rent for a one-bedroom apartment in the city is now down 1% from where it was at this time last year, according to the latest data from Apartment List. In 2015 and 2016, rents were increasing by as much as 10% every year. Rents are beginning to dip in New York City, too.
If you're thinking of moving to a more affordable place and telecommuting, especially if it's a place you've never lived before, take some time to consider some key points, financial experts say.
You don't know a town until you've lived there for a bit, says Mark La Spisa, a certified financial planner and president of Vermillion Financial Advisors in South Barrington, Illinois. So don't make any moves you can't easily reverse.
"Rent for the first year," he says. "If you buy versus if you rent, you cut your flexibility down. If you're going to move somewhere new, you want flexibility to get the lay of the land."
The factors that determine whether a person wants to stay in a new city are often abstract, Jennifer Abcug, a social worker who specializes in life transitions, told Grow, and not just financial. "You want to have a sense of what kind of community you are moving into, in terms of social connections," she says.
By waiting to buy, you won't be committing to a neighborhood that turns out not be the right fit for you.
Video by Courtney Stith
"Not all places are created equal when it comes to taxes," La Spisa says. For example, Colorado, has an effective state and local tax rate of 8.58% for the median U.S. household, according to a 2020 Wallethub survey. In Texas, there is no income or vehicle tax, but the real estate tax is 6.11%.
Ask yourself, "What is the tax structure and how does it differ from where you are?" La Spisa says.
If the city you are currently in has many public transit options and doesn't require you to have a car, check to see if that is still a possibility in your new city. If you do need a car, you'll have to budget for getting one — and the attendant costs, such as vehicle taxes.
By researching state taxes and other less obvious costs before you move, you'll be able to plan more accurately for what life costs in your soon-to-be home.
Video by Stephen Parkhurst
If you move to a smaller, more affordable city, you might find that you end up farther from where your family is located, which can make visits home more expensive. Or perhaps the social or professional scene ends up not what you thought it would be.
"Have a contingency plan, because the grass may not always been greener," La Spisa says.
There are many cities that boast a low cost of living, like Des Moines, Iowa, where one-bedroom apartments are listed for between $600 and $800 per month on Trulia. If you're moving from Chicago, where one-bedroom apartments cost twice as much per month, or more, the low rent can be very attractive.
Still, before you make the move, do your research and make sure the place you're headed offers the social, nightlife, transportation, cultural, and professional opportunities you want. Moving to a city just to find out that you don't like it and want to move back could cost you more money in the end.
Give yourself an out so that if you're not happy in your new home, you'll have options. Save enough money to ensure that you can move back or away if your new home doesn't measure up to your old one.
"Moving as a result of being able to work from is home is more of a lifestyle happiness choice than it is a financial choice," La Spisa says.
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