Should I move out from my current apartment before the contract ends to save more money?

Question

I'm renting a room at $800 per month.

I've lived here 2 months and I have a contract of 12 months. So, I have 10 more months before the contract ends.

I have deposited $1300 as a security deposit.

Based on the contract, if I wanted to move out before the contract ends (this is allowed), I should either: 1. Find someone to replace me and continue the contract 2. Move out without taking back the deposit

I found a room at $500 per month which is $300 cheaper.

Finding a replacement is difficult and time-consuming.

So, I'm thinking to just move out without taking back the deposit so that I can save $300 per month for the upcoming months.

Is this action financially worth it for me? I'm thinking that, if I continue to live longer or if I'm taking too long time to find a replacement, I will lose more money amounted at $300 a month.

Of course there are some drawbacks like location and etc. However, after a thorough calculation, those drawbacks can be tolerated due to financial situation.

Answer 1

In the United States the security deposit is to cover damages you make to the apartment or common areas. It is not to allow you to skip out of the contract.

Frequently you are responsible for finding a person to take over the lease, but they still must be approved by the owner or their representative. If you do terminate the lease early you are generally expected to still pay the rent, though the landlord has an obligation to try and find a new tenant. If they are successful you damages due to breaking the lease will be reduced.

That $1300 security deposit will be treated separately depending on the condition of the unit. State laws specify the timelines and requirements for the security deposit.

Answer 2

Since $1300/$300 = 4.333, it'll take you a bit over four months to recoup the lost $1,300 deposit. So... all else being equal and you plan on living in the $500/month apartment for five months, it makes mathematical sense to move if you also have enough cash for the deposit on the $500 apartment.

HOWEVER "all else" is rarely equal! Why is the $500 apartment so much cheaper than the $800 apartment?

1. Crime?
2. Poor maintenance?
3. You must supply your own appliances?
4. Farther from work?
5. Farther from family?
6. Farther from other things you enjoy?
7. Etc, etc, etc.

We can't answer those questions for you. Thus, it might behoove you to stay in the $800/month apartment. Or, it might behoove you to move.

Answer 3

As others already mentioned, 1300 is quite a lot of money to just walk away from, especially for someone who would consider moving to an appartment that costs 'only' 500.

So, consider these scenarios for the next 12 months:

Find a new tenant now, then move

Total cost: 500*12 = 6000

Find a new tenant in coming month, then move

Total cost: 800 + 500*11 = 6300

Move, find a new tenant after 1 month (if agreement is flexible)

Total cost: 800+500*12 = 6800

Move, don't find a new tenant

Total cost: 1300+500*12 = 7300

Do nothing

Total cost: 800*12 = 9600

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These are the numbers, here is some personal advice:

If it is somehow possible, try to get the new tenent in and move. Even if this means you need to wait 1 month with getting a new appartment it is still a rather attractive scenario.

If the 500 is WAY below the market (be wary of things that are too good to be true), then jump on it, and try to come to an agreement with your landlord that you get some deposit back if you bring in a new tenant.

Of course you can still consider the final two scenarios as well, but financially they are less attractive. Moving without a new tenant is still much cheaper than staying in your current place of course BUT don't underestimate the cost of moving.

If you plan to stay in your new place for only a short time and need to refurnish, any cost savings might evaporate instantly!

Answer 4

From financial point of view, you will be worse-off short-term but better off in a few months time, as you can see from some other answers.

But I think you fail to take into account that the time is ticking, and the room may not be available. Furthermore, it might come with its own issues which your current accommodation doesn't have. Should those issues show up, you won't have the money after just spending on your new deposit and the new rental. There is not much of a financial risk only if things work out, which they might not.

I suggest you at least give a go to finding a replacement tenant for a month or two, without going into the other property. If there is a room like that now, chances are that there is a room like this in a month's time as well. That way you secure yourself by not having to sacrifice your security deposit.

Answer 5

I think you haven't really thought this through. I don't know wher eyou live, but there are two possible scenarios: Too many flats or too many renters.

If there are too few flats available, as in many larger cities, finding a replacement should be quite easy. By the sounds of things it was hard to find the 500$ room, so I guess this is the case in your city. So go ahead and try to find a replacement. It should cost more than a few bucks to place an add and no more than an hour to make it. There are free and effective options in social media too.

If there are far too many flats to choose from, so you're unlikely to find a replacement, you may well be able to renegotiate a lower rent with your landlord, as your gain from swapping would be his loss.

Answer 6

If you decide to move, and it's so hard to find a replacement, you should consider paying someone to take over your lease. After all, you're saving $300 per month.