If you’re reading this, you’re probably having a rough time with rent. But really, who isn’t in 2019?
Maybe you’re looking for a place but can’t seem to find the right price in your range. Maybe you’re already renting and burdened by the heavy cost.
If you need help with rent, you're certainly not alone in the least. If you're looking for low rent apartments, we'll show you how. And if you're being stretched by rental dues, we'll give you a few tips and tricks for lessening that burden.
First, let’s look at what today’s struggling renter looks like and how the housing market has changed in recent years for a lot of people.
Millennial Mike and the New Housing Problem
Picture if you will, a persona. Perhaps you’ll relate to him.
His name is Mike, and he’s a renter. Mike is the quintessential young professional in 2019. He’s an urban renter with student loan debt, delaying his life goals due to a significant widening wealth gap. He’s in his twenties or thirties, making around $60,000 a year as a STEM professional, government official, or gig economy freelancer.
He’s educated. His goals involve having good paying job opportunities in the future, learning new technology for professional reasons, and paying off student loan debt. He invested in public education.
Mike is facing some challenges. Raises in most industries aren't keeping pace with housing costs. Rising student debt makes it hard to buy a home, and Mike has $30,000 in student loan debt.
Mike has experienced significant changes over the past two years. He's graduating from college, finding a full-time job, planning on buying a house, and getting married. While Mike feels more stable economically at his current job, he isn't convinced this stability will last. He has weathered three recessions in his lifetime and has little confidence that the economy will stay strong. Mike also faces record levels of student debt. While he plans on getting married, having kids and buying a home, he and his peers are far behind past generations. He is most likely to live in the city or suburbs.
Sound familiar? Mike isn’t so different from most Millennial renters today. With a dubious economy, a widening wealth gap, and high housing costs, it’s extremely difficult to rent a home or even an apartment in U.S. cities or suburbs.
It certainly isn’t impossible. Let’s look at some tried-and-true techniques that help with rent.
Eyeball Your Lease Intently
There are various aspects of a lease that serve as variables in terms of pricing. When signing a new lease, it’s extremely important to look it over for a number of reasons:
- Pet fees and deposits. These can significantly impact your overall renting costs. Monthly pet fees can range from $20 to $100 or more, depending on the lease.
- Tax. Don’t be afraid to ask about the average tax that applies to your lease. Sometimes, this is not included in your actual lease agreement.
- Early termination fees. Consider if there will be a situation in the future in which you’ll have to terminate the lease. This can be extremely costly so it may be wise to settle for a shorter lease with a higher overall renting cost if you think this could happen due to work, family, and schooling issues.
- Carpet cleaning. If your apartment or home has carpeting, your landlord may expect you to carry the cost of professional carpet cleaning or will include the fee for this in your deposit. If possible, negotiate a lower deposit by offering to find a cheaper alternative.
- Late fees. These occur in pretty much any and all rental agreements. Consider whether or not it will be very likely that you’ll have trouble paying your rent and budget those late fees.
- Location. Sometimes apartments will have a higher rental cost if they are on a higher level, have more windows, or have attributes that are more desirable.
Calculate Renting vs Buying.
Many young people who are considering housing don’t really stop to think about the financial benefits of buying vs renting long term.
Consider a few things:
- How long you plan on living in a particular area.
- How much you’d be paying in rent and how much you would be paying in ownership expenses.
- Your mortgage interest deduction
A renting vs buying calculator can be an extremely useful little tool when trying to figure out whether renting or buying is ideal for your budget; here's a nice summary from the same team at SmartAsset:
Consider Renting vs Leasing.
Renting involves paying a monthly fee to stay in a home or apartment, which will end when you break the lease or move elsewhere when the lease expires. Leasing a home or apartment involves paying a monthly fee, but ultimately working towards the goal of exclusive possession or ownership of the property.
There are many differences between renting and leasing:
- Typically, one would lease a property if they plan on staying there for a long period of time.
- Renting involves a landlord and tenant, while leasing involves a lessor and lessee.
- Lessees will be responsible for all maintenance, while a renter would likely contact the landlord for maintenance requests.
- A lease cannot change, but a rental agreement can be altered by the landlord at any time.
- Once a lease period is over, the lessee will be asked to purchase the property. Renters will not experience this offer.
Financially, a lease will likely be more expensive as it leads to the end goal of ownership. However, depending on rental alternatives, leasing could be cheaper. It all depends on the agreements on both sides.
Think About Your Housing Wants and Needs.
Sit down and make a list of your absolute necessities and things that you want but don’t need in your overall budget. Then, do the same thing when it comes to attributes you want in an apartment or home.
By narrowing down what you want and what you need, you can effectively narrow down the basics and possibly finding a rental that’s perfect for your budget. Some sacrifices will be made, but hey -- that’s how budgeting works.
Negotiate (Yes, You Can Do That!)
Nobody ever considers this, but you can definitely negotiate your rent. If your potential landlord isn’t open to ever hearing it, look elsewhere.
When renewing a lease, you’ll likely be offered a new rental price. This can be higher than your old rent or less expensive, depending on the market. Negotiate with your landlords to get a lower price that will still benefit the both of you.
When starting a lease, don’t be afraid to make a list of all the flaws you see during the walkthrough. This can be used to your advantage to lower your rental price when it comes time to sign the papers.
The Roommate Question.
Living alone is great, but living with other people is always cheaper.
Make sure both of you find an appropriate balance between utilities and splitting the rent before anything is signed. Consider drafting your own contract for the both of you and get it notarized.
Avoid the Vultures.
Real estate agents and middlemen seem like a great way to find the best prices on a home, but they aren’t doing it for free. When it comes down to it, even if an agent finds you a stellar and cheap home, you’ll be paying substantially more to pay them to do it.
Do your own research online to find a home and try to apply online or directly with a landlord.
Stay Away from Universities.
The closer a place is to a university, the more costly it will be. This is pretty much universally true.
Unless you’re personally going to a university, look for locations at least five miles away from a major school. If you are going to school, consider using public transit or factoring in driving costs vs far from school rental costs. Sometimes driving daily and living in a cheaper rental farther away is less expensive than living walking distance to a university.
Don’t Fall For “All Utilities Included.”
This may seem like the best thing ever, especially if you consume a lot of electricity. However, “all utilities included” may not be your best bet.
Try and calculate the cost of internet, monthly power, and other amenities that you would be paying for outside of the rent. Ask your potential landlord what the base rent is before the utility costs. Sometimes, it may be cheaper to pay for the utilities yourself. Ask your landlord if you can do this or find another place that offers an affordable rental cost without included utilities.
When it comes down to it, budgeting and considering all the factors of a rental cost is the best way to find a home that is affordable for you.
How was our guide to saving money on rent? Tell us which one of our tips hit home in the comments below.