Census data is showing that the back-to-the-city trend that characterized location preferences over the last 10 years is shifting as more people, millennials especially, are making the move to the suburbs. Moving from the city to the suburbs is definitely a lifestyle change, but this change of pace seems to be welcomed during these uncertain times. Even though it might seem straightforward, there are a number of financial considerations and priorities to consider when taking the plunge and getting out of the city. Are you a city dweller considering a move to the suburbs? Here are some tips for a smooth transition.

Budget for suburban costs

There’s no question the suburbs are becoming more popular. Even before the Coronavirus pandemic, for example, Riverside, California, just outside of Los Angeles, had a net increase of 6,279 families in 2018, while cities like New York and Los Angeles saw decreases of 24,969 and 14,754 families, respectively. Moving out to the suburbs often involves different costs that are not inherent to city life. Especially now, if you’re considering a more suburban lifestyle, here are some of the financial details to think about before your big move:

• Transportation: Train and bus lines tend to be less functional in the suburbs than in the city. Depending on your family situation, you might find that you need two vehicles. This not only means purchasing or leasing two vehicles but also two sets of insurance, auto repairs, gas bills and registration fees. Even if you’re not driving, using public transit to get from the suburbs to the city could make your commute more expensive.
• More furniture: You might be so excited about the prospect of moving out of your cramped apartment and into a house with more space that you’ve overlooked the costs associated with furnishing a larger home. While you can always furnish on a small budget by purchasing used furniture, this is still an important expense to consider. 
• Cost of groceries: Conventional wisdom says that everything is more expensive in big cities, but research in the Oxford Academic shows that’s not actually true. In this 2019 study researchers found that the cost of food products decreases as the size of the city grows. Be prepared to spend more on average for your groceries in the suburbs than in the city.
• Health care costs: Data from the Bureau of Labor Statistics shows household health care spending increases as people move away from the city center. At the same time, smaller communities may be equipped with fewer resources to handle emergencies, which could make a crisis more complex to manage in a suburban environment. For example, research shows nearly all the top 50 major cities in the United States created emergency text messaging lists for the coronavirus pandemic, many of them even allowing text-to-911 capabilities. Smaller communities often don’t have the budget to launch such initiatives. Check to see what free health and community resources your new suburban environment offers and how these might impact your daily life.   

Prioritize home renovations

You’ll likely want to customize your new home and make renovations that either update the house or create an environment more reflective of your lifestyle. Before you get going on upgrades, remember that not all changes are equal when it comes to reselling your home. Here’s how to weigh which changes are necessary to make now, and what to hold off on. 

• Will it lower your monthly expenses? Some renovations can actually help reduce your monthly costs. For example, upgrading to more energy efficient windows or roofing can help you save when it comes to paying for heating and cooling. If your renovations are investments that can pay off with savings throughout the year, they might be worth it. 
• Would renovations impact your lifestyle? When moving to a new house, changes are often necessary to create essential rooms for some lifestyles, such as a home office, children’s playroom or a mother-in-law suite. If you need to make changes to the home in order for it to fit your lifestyle, then it makes sense to do them at your earliest chance.
• Which renovations will hold their value? Even though bathroom and kitchen renovations are likely the most tempting to tackle right away, renovations such as a new roof or hot water heater are the most likely to hold their value when it comes to resale. If you plan on reselling your house within a few years, cosmetic changes that you make now could be dated by the time you resell, and chances are you’ll have to make updates all over again right before you list your home. Checking the cost versus value data for your area can help inform your decisions.
• How will you cover costs? If a lot of your cash went into the down payment for your new home, you might be hard pressed to come up with additional funds right now to make renovations, especially if you don’t yet qualify for a home equity line of credit. One solution is to apply for a personal loan that you can use toward renovation costs that you feel you need to make now. One major benefit is that the fixed monthly payments will be easy to integrate into your new budget. 

Assess the cost of your real estate investment

You might marvel at the size of the home you can afford in the suburbs when compared to the city, but don’t forget that with homeownership comes additional costs beyond the monthly mortgage. Here are some costs you should consider when creating your suburban budget. 

• HOA fees: Even some suburban communities have HOA fees. Be conscious of this as you’re shopping for a new house and make sure you can afford this added monthly fee before you commit to a home, even if it’s in a perfect location.
• Property taxes: If you’re used to renting an apartment in the city, don’t forget that owning a home means you will have to pay property taxes, which will add to your monthly costs. 
• Home and yard upkeep: A larger home means more maintenance, and you will have to upkeep not only your house but also your yard. Be sure to budget for different yard costs throughout the year. For example, your yard maintenance costs might be lower in the winter but increase for spring clean up and throughout the summer as you water your lawn.

These expenses are all important to factor into the way you approach a potential real estate investment if you’re considering moving from the city to the suburbs.