A penny saved…is not really all that much. Saving $100 or more every month without doing anything special, however, starts to get us somewhere. Using that money to pay off debt or invest will improve your financial security immensely – if you’re currently renting, these savings may even lay the groundwork for the deposit on a house.
The average rent of apartments nationwide climbed almost 9 percent between 2016 and 2020, to $1,463. This doesn’t begin to tell the whole story, though: in San Francisco, the current rate for a one-bedroom apartment is over $3,000, with New York City not far behind. At a federal minimum wage, that’s over 400 hours of work to cover rent alone, or six weeks more than exist in a calendar month!
Fortunately, most people earn more than that, at least in large, popular cities. Still, since accommodation makes up almost a third of the average household budget, and nobody lives in a hovel or a dorm room by choice, it may be time to share a couple of tips for snagging comfortable apartments for the most reasonable price you can.
Table of Contents
- 1 Give Yourself Time
- 2 Learn How (and When) to Negotiate
- 3 Choose Value over Fashion
- 4 Cut out the Middleman
- 5 Arrive with References in Hand
- 6 Offer to Do Some Work
- 7 Think of Your New Commute
- 8 Watch out for Hidden Costs and Included Freebies
- 9 Pay Attention to Timing
- 10 See What Paying in Advance Can Get You
- 11 Think Outside the Box
- 12 Final Words
Give Yourself Time
Some people, like army generals and emergency room nurses, have the ability to make complex decisions under pressure. For most of us, though, any choice made in haste is probably going to be a bad one.
You’ve probably succumbed to some salesman’s wiles when you were tired from work and in a rush to get home. This is fine if you’re just buying a toaster, but signing a lease is a little more important. Don’t, therefore, make the mistake of trying to find a new place in a week. New properties become available all the time, landlords sometimes reduce their asking prices, and you may realize that you can live without some amenities you used to think were important.
You should also keep in mind that lessors and estate agents are more interested in hooking you than making sure you’ll be happy. This often leads them to put you under pressure, frequently by claiming that other people are just about ready to move in (whether this is true or not). Even if everything seems to your liking, leave and wait at least an hour before making a decision.
Learn How (and When) to Negotiate
There really is an art to getting people to give you your way, just saying “gimme” repeatedly will usually not work. In any case, being too obnoxious will lose you much more in goodwill than you’ll save on rent. This includes trying to haggle over the price when the landlord isn’t willing – remember that this guy can hike your rent in a few months’ time simply because he doesn’t like you.
However, they will usually meet you halfway if you can present a good case. It will certainly help to know what’s being asked for similar apartments in the same area as well as how many are available (which gives you an idea of the vacancy rate). You’ll also need to understand terms like price to rent ratio and read up a little on what state law in your location has to say about apartment rental. This will sometimes be in the tenant’s favor and sometimes not, but knowing what you can both legally agree to will make the discussion go much more smoothly.
It’s also a good idea to inquire politely whether the price actually is open for discussion before you start to dicker. In some cases, the landlord will have dozens of qualified tenants to choose from, in others, the building owner may not give their agent any leeway. If you can’t afford the asking price in this case, don’t bother trying to negotiate; use your energy to find a more affordable place instead.
Choose Value over Fashion
There’s a well-known saying in the property game: “location, location, location” (it used to be “location, location, location, location” but somebody decided this was redundant). The meaning of this is clear: what kind of apartment you have matters less to its price than where it’s located.
As one extreme example, renting a bathroom in London, England can cost you as much as $2,000 a month. Things aren’t that bad in most American cities, but rents for the exact same property can still vary by as much as 30% over just a few blocks. The important thing to remember is that the most fashionable, desirable areas aren’t always the most pleasant to live in. Even in inner cities, it’s possible to find clean, inexpensive, child-friendly neighborhoods if you take the time to look. Trying out a couple of new jogging or cycling routes and talking to a few people on the way is one of the best ways of finding these, though online tools are also available in case you can’t visit in person.
Cut out the Middleman
Renting through an estate agent may be convenient and less scary than facing a confusing property market on your own. On the other hand, unless they’re superstars in their profession, there’s very little they do that you can’t manage yourself. Specifically, they have access to property listings the general public can’t see – even if they do little work otherwise, their fee (typically one month’s rent or more) is still rolled into your payments.
The alternative is simple: just figure out what exactly your requirements are and browse through property websites that don’t require a real estate license. It also makes sense to look for a landlord that doesn’t make use of a property management company. These typically take about 10% of what you pay, mainly for collecting your rent check and passing it on to the owner. Renting directly from the landlord removes this expense from the equation and also gives you much more flexibility when negotiating.
Arrive with References in Hand
One sad truth of property management is that some tenants are real maniacs – if you thought your family at Thanksgiving dinner was bad, you ain’t seen nothing yet. Decorating is already expensive; can you imagine having to replace everything from the carpeting to the cabinetry in an apartment?
Regrettably, this kind of financial loss is common enough to be a real concern for landlords – not to mention furious neighbors, unpaid utility bills, and visits from the police. Many of them use tenant screening services, but a personal recommendation still goes a very long way.
If you’ve had your name on a lease before (and did not give your previous landlord a coronary), simply asking the owner of your new apartment to phone them up will bolster your bargaining position. While you’re at it, you may as well take along any other documentation a landlord may wish to see, especially proof of employment or income – plus some cash in case you’re required to pay for your own background check or even want to reserve the place with a deposit right away.
Knowing that you’re unlikely to cause major maintenance expenses or fall behind on your rent puts a potential landlord’s mind at ease – rent prices for unknown tenants, as well as those with poor credit scores, are automatically higher to compensate for these possibilities.
Offer to Do Some Work
If you have any handyman skills, or you have a good friend who does, spotting defects in the property stops being a sticking point becomes an opportunity to build trust with your landlord. Offering to repaint a wall damaged by damp, refinish the floor, or take care of a problematic washing machine shows that you care about the state of the building – and you don’t need to do it for free.
Some landlords will decline your proposal, as an unskilled craftsman can do a lot of damage. If you know what you’re doing, however, you can charge professional labor rates and deduct all materials’ costs from your rental bill.
Even if you don’t care to spend your time in this way, you should make certain that both of you are clear on which repairs are your respective responsibilities. This is defined by law; generally, normal wear and tear is expected and not the tenant’s problem, but what exactly constitutes “normal” is often a judgment call. You don’t want to be hit, unexpectedly, with the cost of a new water heater because of a misunderstanding.
Think of Your New Commute
This doesn’t save you money on accommodation as such, but reducing your car expenses is always a worthwhile goal. This is not even mentioning the daily irritation of aggressive drivers, poorly scheduled road repairs, accidents, and apologizing to your boss for being late.
Excluding depreciation (the difference between your car’s buying and selling price), an average car costs about 35¢ per mile to run. In other words, you can save just over $1,800 in a year if you move 10 miles closer to work, leaving you free to use that money on rent instead (or if we’re being honest, chocolate and pizza). You’ll also have a kind of 25th hour every day to spend on the things that are important to you.
Watch out for Hidden Costs and Included Freebies
Many newer apartment buildings come with lightning-fast internet included – some actually have the ISP’s server right in the basement. One I lived in myself, by contrast, had electricity included in the bill – but tenants were prohibited from installing air conditioning lest we actually take advantage of this.
Some landlords seem to like fooling unwary tenants by advertising a low rental rate and then making money on extras. On the other hand, a development with a swimming pool, on-site gym, or private park may be cheaper than you think.
The rent itself is only part of the cost of living somewhere. An otherwise perfect place may become unaffordable once you factor in having to buy appliances, a requirement for renter’s insurance, or the cost of a parking space. The only way to figure out the true price is to ask as many questions as you need to and then do the math.
Pay Attention to Timing
About four-fifths of home moves happen in the summer. This means that property prices dip during the rest of the year, but only slightly – unless the seller is highly motivated, they can always wait a few months for a good offer and potentially get thousands of dollars more.
The situation is different with rentals: an empty apartment not only doesn’t generate any income, it actually costs money. This makes landlords much more eager to find tenants, even at a slightly lower rent figure.
See What Paying in Advance Can Get You
Two things landlords dislike intensely are cockroach infestations in an apartment building and tenants who fall into arrears. The cockroaches are easier to get rid of, surprisingly: some serial delinquents know exactly how to game the system so that they can live rent-free for months before moving on to their next victim. Eviction is expensive, time-consuming, and rarely results in the property owner getting paid what he’s owed.
This is why so many lessors will check your credit score. Most black marks against your name remain on your report for seven years, so improving your credit is a long-term project rather than something you can do just before going hunting for a new apartment. You could, however, request your annual free copy of your credit report and see that no errors have crept in, or consolidate your credit card debt to improve your financial statistics – this will help, though not by much.
In other words, bad credit makes finding a nice apartment at a reasonable price much more difficult. There is a simple (though not necessarily easy) solution, though: making a down payment of several month’s worth of rent. This shows that you’re trustworthy as well as solvent and may prevent your perfect apartment from slipping out of your grasp.
Assuming that your credit is fair to good, you can also offer to sign a longer-term contract in exchange for a discount. Most landlords will jump at the chance for a longer lease unless they’re thinking of selling the property. After all, a dependable tenant at least brings in some money each month, whereas an empty apartment does not.
Think Outside the Box
“Good” neighborhoods aren’t always that pleasant to live in, and looking at properties different from what you originally had in mind can get you a much better deal. There are plenty of advantages to living in an apartment, but keep in mind that foreclosures are expected to skyrocket soon. Some will certainly come on the rental market, so you may be able to afford a free-standing house instead.
As one example of how a little lateral thinking can work for you, one person I used to know actually lived in an empty warehouse. (Before you ask, yes he was indeed a little weird). His home was a little drafty, but the industrial park basically had zero crime, no traffic noise after six p.m, was close to a highway onramp, and gave him all the living space he could use. Even better, it cost him about the same as a three-bedroom apartment. He even had his own indoor volleyball court, so he was pretty happy with his choice.
You don’t need to go to that kind of extreme, but good for you if you do: some people can be perfectly happy renting a plot of land and living in a camper, while others may be adventurous enough to explore cheap DIY housing ideas.
One of the ironies of the American housing market is that there are a ton of buildings standing empty at the same time many people are having trouble affording a place to stay. There are a number of reasons for this: foreclosing banks don’t have the staff or experience to find tenants for vacant houses, some apartments are just not located near where people want to live, while others, built during better times, are just too high-end to rent out cheaply.
All this means that there is currently huge competition for cheap but livable apartments. People searching for affordable housing, especially in some cities, have to walk a tightrope: be ready to jump on a bargain at a moment’s notice but also take enough time to weigh their options rationally. It’s therefore essential to stay agile and informed. Apps like Zillow and Trulia make this a lot easier, especially if you choose to be notified anytime a suitable property is listed.
In the end, though, you might have to settle for less than your ideal home, at least for the time being. You may, for example, have to go with a smaller apartment or take on a roommate. Just remember that this is temporary; if you work diligently at your finances, you’ll almost certainly be able to afford something better soon.