Published February 01, 2017
Whether you struck oil -- black gold, Texas tea -- and are moving to posh Southern California (that's a reference to "The Beverly Hillbillies," you millennials!) or maybe you're making a cross-country migration to work for Snapchat (that's a popular messaging app, boomers!), there's a lot to think about when pulling up stakes and settling in a new place. Sure, it's exciting, but a whole lot can go wrong, too.
So no matter your reason for relocating, beware these top mistakes people make. Check out this list, and brace yourself for some tough decisions.
Mistake No. 1: Renting out your old home badly…
Sure, it seems smart to hold on to your old place just in case. It's also nice to collect rent! But that's the best-case scenario; you need to also consider the worst.
"Renting [out] a home can be a great investment, if you know what you're doing," says real estate investor Mark Ferguson of Investfourmore.com. "The problem is, many people have no idea how to manage renting a home -- like collecting rent and checking on tenants -- or [to] anticipate the expenses. Landlords have to account for maintenance and vacancies, not just their mortgage payment, so most houses won't make money as rentals."
So make sure you have a plan to manage your home remotely, and that you can afford to keep paying the mortgage in between tenants.
Mistake No. 2: Or selling it prematurely
Robert Palmer, host of the syndicated Saving Thousands Radio Network, talks up the other side of the issue.
"Selling years from now is going to net you more money than selling today, and someone else will have made the [mortgage] payments for you," he says. "This helps you build wealth."
The key is the right tenant, like a friend or somebody you know. Bottom line: If your home is in a hot market like San Francisco, Los Angeles, or New York City, it might be impossible to buy back into the market should you ever decide to return to it. Which happens more than you might think.
"In L.A., it's not uncommon for rental amounts to be more than the mortgage payments," says Terra Andersen, director of Internet marketing at apartment-rental company NMS Properties. In that case, it might be more wise to rent out your home, as a revenue stream and a fallback option.
Mistake No. 3: Muddling a mortgage on a new home
If you're relocating for a new job and want to buy a home before you start working, be sure to structure your employment agreement to avoid issues with lenders. While an executed offer of employment can serve as documentation to qualify for a new mortgage, many lenders will require proof that all the offer contingencies have been met as well, says Mary Catchur, president of Marimark Mortgage.
A solution is to meet with a mortgage loan originator licensed in the state you're relocating to and develop a plan to fulfill those requirements, "preferably before finalizing the new job offer," says Catchur.
Mistake No. 4: Storing stuff with plans to move it someday
Tempted to leave behind lots of your possessions to transport months or maybe years after you're settled? If you're certain a relocation is permanent, it's best to move everything right away. The reason: "You can take the moving expenses adjustment on your tax return only for expenses paid in the same tax year as your move," says Crystal Stranger, president of 1st Tax and the author of " The Small Business Tax Guide."
Plus, "from a realistic standpoint, it's easy to forget about an item in storage," points out Christine Haney, executive vice president of Global Relocation at Elliman Real Estate. "When my father was transferred to Europe, my parents stored their 1970s gold, brown, and green furniture. When they returned eight years later, their now-retro furniture had no place in their new home. It did provide a good laugh for all -- or tears, once they discovered how much money they had spent in the long run!"
Mistake No. 5: Expecting your possessions to arrive ASAP
And even if you do pack up and send off everything all at once, don't push it too close to the day you start a new job or endeavor, expecting all your possessions to arrive at one time.
"It can take a few days, if not a week or two, for all your belongings to arrive at your new home, due to weather or road shutdowns," says Ryan Carrigan, co-founder of moveBuddha. "Many people end up having to buy new work clothes, school supplies, or basic kitchen items" when they show up at a home well before the moving truck does. Pack a starter kit with whatever essentials you need for a week, and always keep important documents with you.
Mistake No. 6: Not getting schooled on schools
"Some people move into a district without checking out the schools," says Alina Adams, who works in school admissions in Manhattan. What's worse, she says, is when people move to a neighborhood with a great school without realizing that it has no more room. So play it safe: Call the school district or private school you want to find out if you can enroll your child.
Mistake No. 7: Trying to arrange your new home exactly like your last
Often relocaters "try to replicate the exact same old living environment in a new area," says Haney.
"As families try to mitigate the impact on the changes that any move can bring, sometimes this can actually add to the stress, especially when the former lifestyle can't be replicated. Further, it takes away from experiencing new cultures and learning about new areas. The most successful moves I've seen is when families embrace the change." Welcome a new environment to go with your new move. You'll be glad you did.