Relocating for a job is a difficult decision. You might get a fantastic offer, but how do you know whether or not it’s worth it to move? Leaving your current employer, selling your home, and adjusting to a new city is no small feat. If you have the option to relocate, you should be sure that it’s the best choice for you and your family.
This has also become far less common in recent years. Fewer people than ever are opting to relocate for jobs, increasingly due to the ability to work remotely. Working from home is appealing for a lot of employees, so many people look for online jobs first and foremost.
That doesn’t mean it’s never wise to relocate for a job offer, though. In some cases, it might be a great decision professionally, financially, and personally. Here are four things to consider if you’re thinking about relocating for work:
1. Your Current Home
The amount of equity you have in your current home might be the determining factor in your decision to relocate. The general recommendation is not to buy a home unless you plan on living there for at least five years, which helps you build up enough equity in the property that you can sell it for a profit. No one can predict the future, though, and you might get a job offer in another city just a couple years after buying your home.
The value of your home should increase over time, but you might not have enough equity if you’ve bought it recently. Because of mortgage interest and the natural fluctuations of the real estate market, you might break even on the sale or sell the home for less than your mortgage value. In this case, you’ll have to pay the difference out-of-pocket along with the closing costs. This could leave you with little or nothing for a down payment in your new city.
If now isn’t a good time to sell your home, you could rent it out after you relocate. Rent prices vary dramatically by location, but it may be possible that in your case renting your home pays for its mortgage and taxes. In Wilmington, rental properties are currently in high demand. However, most people don’t want to worry about finding a tenant and managing a rental while they’re also adjusting to a new job and a new city.
If you’ve lived in the home for a long time and have substantial equity in the property, selling it will be much easier financially. You can easily cover the closing costs with the profit you’ll make from the sale, and you can use what’s left to put a down payment on a house in your new location. This could be an opportunity to upgrade to a larger home if it’s financially viable, too.
You should be aware of the tax implications of selling your home as well. Single homeowners are exempted from the first $250,000 of profit on the sale of their primary residence, and married couples get a $500,000 exemption. However, you can only use this exemption once every two years. If you sold a house less than two years ago and used the capital gains exclusion, you will have to pay capital gains tax on this sale.
2. Salary and New Cost of Living
When considering jobs in the same location, it’s fairly easy to compare salary. If one requires you to relocate, though, you have to consider the cost of living in this new location. A $50,000 salary in some areas of the U.S. is comparable to a $100,000 salary in others.
Even if your new job offers a larger salary, your standard of living might not change when you move if the city is expensive. Do as much research as possible into the home prices in the area, and consult with a Realtor who’s familiar with the market before you accept the job offer. You should always consider more than salary when evaluating a job offer, but it’s definitely not worth accepting if you’ll barely be able to afford the location.
If you’re concerned about housing prices, expand your home search to outside of the city. Be wary of excessively long commutes, but smaller towns a short drive from major cities tend to have much more affordable housing. The properties in these areas will also probably see a sharp increase in value while you’re living there as people are priced out of the city’s center.
Another important consideration for your new city is taxes. Local and state taxes vary notably, and you may either lose or gain money by moving to an area with different tax rates. Look into both income tax and property tax for your new location, and factor these figures into your decision. You don’t want to be hit with an unexpectedly high tax bill or receive a paycheck that’s significantly smaller than you’d anticipated.
3. Relocation Reimbursement
How much your new employer will chip in for your relocation depends on how much they want you on their team. If you have a very specialized, unique skill or a lot of relevant experience, they’ll probably pay for most or all of your moving expenses. If not, they may not offer as much.
Ideally, your employer would pay for your moving expenses, movers, and airline tickets. They might even cover temporary housing while you search for a new home. You can and should negotiate on this matter. If you’ll have to pay a lot out-of-pocket, though, it could affect your decision to relocate. Moving is stressful and expensive, and it’s not always worthwhile to put yourself through this strain for a job offer.
4. Your Overall Happiness
You can’t assess your happiness the way you can assess taxes, income, or home prices. It’s not a mathematical problem, and you can never predict how you’ll adjust to a new place and job. Deciding whether or not you’d be truly happy after relocating takes self-reflection, and you may have to simply go with your gut.
If you love the area you live in or have important reasons to stay, relocating for a job may not be the best option for your life. Money isn’t everything, and a pay raise doesn’t always justify moving away from family or moving to an area you feel lukewarm about. Think about the things you like and dislike about your current location, and compare it to what you know about the new location.
In this day and age, relocating for a job is somewhat rare. Remote jobs allow you to work from any location, which opens up plenty of possibilities without requiring you to move. In some situations, though, relocating can be a great way to get a fresh start with a better salary. If you like the new city and can easily sell your home for a profit, relocating might be worth it. You have to consider your own financial and personal situations to decide whether you’re willing to go through the stress of moving for this new opportunity.
If you have any questions about the costs of living in Wilmington, please don’t hesitate to reach out to us. We are happy to answer any questions we can.
[the_grid name=”Home Buyer Tips”]
