Moving for the purpose of landing a new job or transferring for a current employer should not be taken lightly. Relocating is expensive. The costs only increase for employees with families, and spike dramatically for homeowners.
Costs aside, an estimated
44 percent of Americans were considering leaving home to seek employment in 2012 as opposed to the 20.2% in 1985. Here are some tips for successfully relocating in order to pursue a desired career.
Understanding Company's Relocation Benefits
The good news for employees moving for work is that many employers offer some relocation benefits. Talking to a manager about money can be a touchy subject, especially as a recent hire, so ask human resources if the company has a policy about relocation benefits. Here are some common costs that businesses with a relocation package will likely help cover:
Moving costs (storage, transportation)
House-hunting (going to the new city to find housing prior to move day)
Adjustment bonus (for vehicle registration in a new state, utility deposits)
Home sales commission costs (if new employee must sell current residence)
Temporary living costs
Negotiating Moving Benefits
Unfortunately, more companies have eliminated relocation assistance since the start of the recession. It's not unusual to see “no relocation benefits” in many help wanted ads. That's not to say that some savvy negotiating won't land the employee a few extra dollars in the form of a sign-on or adjustment bonus.
Before transferring to a new city, be sure to research the cost of living in the new location. Failing to negotiate a salary that matches the earning average in the new geographic zone can result in a higher percentage of pay going toward bills. On the other hand, if that city's cost of living is lower, the employee could earn anywhere from 5 percent to 25 percent more than the industry's average salary. This can greatly reduce the financial stresses associated with uprooting family.
Preparing for the Move
Even for companies that offer some financial assistance, the amount is often capped and could be a tiny fraction of the employee's out-of-pocket expenses. When relocation benefits are lacking, or nil, doing some specific online research for a home or rental property can save money and help ensure comfort upon arrival.
First off, research the relative living costs of a city beyond just the cost of a home. Check stats on the average salary, average food costs, etc. Families who plan to put their children through private school should also evaluate the cost of education. Other expenses like gas or transit passes should be factored into the cost of living calculations. There are plenty of tools out there to help determine the cost of living, so use them!
Next, make sure to get acquainted with the new region of the new company. Crime rate, transit and walkability information can affect lifestyle in a new location. Be sure to look into these factors before committing to a new home.
For example, review this listing for a Miami home on Zillow.com. Further down the listing it shows the walkscore is high for access to surrounding amenities. However, what if this neighborhood is far away from the employee's new office? Notice that the transit score is significantly lower. This might affect a relocating employee's decision to move to that area. Using available online tools can increase employees' satisfaction once they've moved. It's important to make educated decisions not solely based on information provided by the employer.
Starting a New Business
What about relocating in order to start a new business? It's not all bad news for people who start a new business far from home. The government actually offers some tax breaks to help reduce moving costs. According to the
IRS, individuals who start a new business are permitted to deduct reasonable moving expenses connected to a career relocation. Requirements indicate the relocation distance must be at least 50 miles. Here are some of the tax deductions approved by the IRS for people who move to start a new business:
Moving personal property
Storage and insurance fees
Charges for connecting/disconnecting utilities
Travel and lodging expenses
Costs for shipping automobile
Talk to an accountant before moving to ensure the accuracy of the time and distance requirements to avoid IRS penalties. People relocating as an employee are also permitted to claim similar tax deductions.
Regardless of the new location, develop a well-structured moving plan along with the new employer and/or business partners. In the end, educated decisions should make the move less stressful and the employee's pockets a little fatter.
Luke Clum is a creative marketer, designer and outdoorsman from Seattle.