Does it seem like rent is getting more and more expensive? This isn’t just an observation. It’s a fact. In June of 2018, the national average rent reached $1,405. That was 2.9 percent more than the previous year (Layne, 2018).
That might make you think that renting is a poor choice, but it’s actually cheaper to rent than buy in the current housing market (Olick, 2018). The cost of owning a home went up 14 percent from 2017 to 2018, making it more difficult than ever for people to buy homes. The rising mortgage costs make renting an easy choice.
Renting might be more affordable than owning, but it’s still not cheap. How can you stay within your budget when prices seem to get higher and higher each year?
It’s actually easier than you might think. Use these tips when choosing and living in a rental. You will save lots of money and enjoy more financial freedom.
1. Be Willing to Commute
When you started looking for a rental, you probably tried to find places close to school or work. It’s likely that your school or work is located in a popular area with lots of demand. Demand drives up rental prices, so consider getting a place a little further out and then commute. The further you get away from the city center, the cheaper your rent should be.
The average rent for urban areas was $1,848 in 2016, while the average rent in suburban areas was $1,269 a month (Whitaker, 2016). That’s a difference of $578 so it makes sense to move away from the city.
Commuting isn’t free, of course. Your vehicle expenses will go up when you have to drive further each day.
Even with the cost of the commute, you can save quite a bit by living further away from work or school. To better understand this, let’s look at how expensive commuting is.
The IRS’s standard mileage rates are set at 58 cents a mile for 2019 (IRS, 2018). This rate is based on the cost of maintenance, gas, oil, insurance, and depreciation. Using this figure, it is clear how much you can save by commuting.
Assume that you find an apartment for $1,848 that is a 10-mile commute from your job. You find a second apartment for $1,269, only this one is a 30-mile commute from your job. That commute might seem unbearable until you look at the savings.
You would spend $5.80 each day commuting if you live in the first apartment. You would spend $17.40 commuting if you took the second apartment.
People work an average of 260 days a year. That means you will need to commute to work that many times each year.
If you choose the apartment that is located closer to work, you will spend around $1,508 on commuting costs each year. That figure is based on the IRS’s standard mileage rate.
If you choose the second apartment, you will spend an average of $4,524 commuting each year. That is quite a bit higher, but you need to consider the rent as well.
Your annual rent would be $22,176 for the first apartment. After adding your commuting costs, you would pay around $23,684 a year to live in that apartment.
Your annual rent for the cheaper apartment would be $15,228. When you add in the cost of commuting, your total would be $19,752. That makes the apartment in the suburbs $3,932 a year cheaper when factoring in the cost of commuting. With that in mind, it makes sense to live a little further out.
Do the math before choosing the rental, though. Add up the commuting costs and make sure the rental will be cheaper.
2. Realize That Wants and Needs Are Two Different Things
Who wouldn’t love to live in a luxury apartment building? It would be wonderful to have your own hair salon, tanning beds, infinity pool, and more, but those extras come at a price. Consider what you want versus what you need. You don’t have to give up on all your wants, but if you find a balance, you can save money.
3. Negotiate for a Lower Price
The price on the listing is not set in stone. Landlords are open to negotiation, but you need to use the right strategy. That means you need to find your leverage and then negotiate from a point of strength (Starace, 2013).
Let’s begin with finding leverage to use during the negotiation. Begin by examining the market. Look at rental listings and see how long they stay on the market. If listings come and go quickly, it’s a tight market. However, if listings stay on the market for weeks or months, the market is loose and landlords are having difficulty filling properties. You can use this to your advantage.
Next, think about what you bring to the table. Are you extremely responsible with a perfect credit score? Do you have a steady job that you’ve been at for years and lots of amazing references? These factors will help during negotiation.
Finally, can you offer to stay for longer than a year? Landlords do not like vacancies. Many are willing to lower the price if the applicant will stay for at least two years.
Look at these factors and determine the leverage you have. Then, speak to the landlord. Begin by offering a price that is lower than what you actually want to pay. It’s possible you will get it. However, if you don’t, the landlord might make a counteroffer that is still lower than the rent.
4. Get a Roommate
If you are serious about saving money on rent, consider getting a roommate. A study found that New Yorkers can save $12,600 a year by splitting a two-bedroom apartment with a roommate when compared to living in a one-bedroom or studio apartment alone (Berger, 2018). You can make your dream apartment much more affordable when you share it with someone else.
5. Be Smart When Selecting a Roommate
A roommate can help you save money, but only if you select a responsible person. There are countless horror stories about people who chose the wrong roommate, only to lose their sanity and their money.
These stories include roommates taking drugs in the apartment, refusing to pay rent, getting violent, and so much more. The list goes on and on. Fortunately, you can protect yourself.
First, you can choose a rental and move in with the roommate together so that you are both on the master lease. You will be co-renters and your landlord will have authority over that person. If he or she fails to pay the rent, your landlord will take action. Your landlord can also take action if the roommate breaks the rules of the lease.
What if you already have an apartment and you want to bring a roommate in? That roommate would be your sublessor. First, make sure your landlord allows you to have a sublessor. If it’s against the rules, you could be evicted for bringing a roommate into the property.
If it is OK with your landlord, vet the potential roommate. Run a tenant background check and credit check. You should also check at least two references and spend some time with your potential roommate. Conduct two interviews to make sure the two of you are a good fit.
If you want to move forward, have the roommate sign a lease. You will essentially be the tenant’s landlord. If your roommate breaks the lease, you will need to evict him or her.
6. Pay All the Rent Up Front
Every once in a while, landlords will offer renters a special deal. If they pay their rent in full, they will get a discount. If you have this option, weigh the risks with the reward (Zillow, 2015). The reward is obviously paying less in rent. The risk has to do with the landlord. Is the landlord stable? Have you been with the landlord for a while and you like living in the rental? If the landlord is low risk and easy to work with, this is an excellent way to save money.
7. If It Can’t Fit, Sell It
When you move into a rental, there is a chance that you won’t be able to fit all your stuff. This is especially true if you’re making the trip from your parent’s house to your first place or you’re downsizing. You don’t want to part with your stuff, so you get a storage unit and end up hemorrhaging money.
Standard storage units cost an average of $60-$180 a month, depending on the size (Campbell, 2018). Instead of storing it in a self-storage unit, ask mom and dad to hang on to it for you or sell it. If you sell it, you can make some extra money to put toward your rent.
8. Choose a Rental With Money-saving Amenities
The right amenities can actually save you money each month (Jkrasin, 2013). For example, if your rental has a gym, you can save as much as $100 a month on a gym membership. A business center is another excellent amenity. Instead of paying for internet access, just head to the business center. You can also save with free parking, grilling areas, and more. Check out the amenities before signing on the dotted line to see how much you can save. Just keep in mind that some landlords charge more in rent based on the amenities. Weigh the cost of the rent against the savings to see if it’s a good deal.
9. Cook at Home, Without a Meal Kit
Dinners out are a lot of fun, but if you are trying to save money, it’s best to stay in and do your own cooking. Eating out is around five times more expensive than preparing your own food. Using a meal kit is more affordable than dining out, but it’s still around three times more expensive than using your own ingredients (Priceonomics, 2018). That doesn’t mean you have to eat all your meals at home, but do so when you can. The same is true for lunch at work. Bring your own lunch as often as possible to cut down on costs.
10. Live Close to Public Transportation
You can save a ton of money if you rent a place that is close to public transportation. This will allow you to ditch your car and all the costs that come with it, such as maintenance and gas. On average, people save $9,900 a year when they get rid of a vehicle and switch to public transportation (Wilbur Smith Associates, 2011).
11. Reduce Your Energy Consumption
Energy costs money. Every time you flick on the lights or run the air conditioner, your energy bill goes up. You can save money by making energy-efficient choices in your rental (Department of Energy, 2016).
Start by replacing the bulbs in your rental with ENERGY STAR models. The Department of Energy states that you will save $75 a year if you replace the five bulbs you use most frequently.
You can also save money by turning down the thermostat. Reduce the temperature by 7-10 degrees Fahrenheit for at least eight hours a day to save up to 10 percent on your heating and cooling costs.
Get a power strip for your electrical equipment and turn it off when you are not using it. This will reduce your electric bill by 12 percent each year.
Your landlord can also help you save money. If you notice a leak, have the landlord to come out to fix it quickly. You can save $35 a year by fixing leaks promptly. Your landlord might be willing to make other energy-reducing improvements as well. Work as a team to reduce energy costs and make the rental more efficient. Your landlord should see this as an investment.
12. Consider Renting an Unfurnished Apartment
As enticing it is to move into a fully furnished rental, that furniture comes at a price. Landlords typically charge considerably higher rents for furnished rentals. You can expect to pay a higher security deposit as well. Consider moving into an unfurnished or semi-furnished rental to save money.
13. Buy Cheap Furniture
If you rent an unfurnished property, you will have to get some furniture. You might think you’ll lose all the money you saved when furnishing the rental, but that is not the case. You can easily find cheap furniture for your rental (Slide, n.d.).
Start the process by looking online. eBay and Craigslist are excellent places to start when looking for cheap furniture.
Next, check thrift stores. Thrift stores often have nice furniture for less so you can likely pick up a piece or two.
Garage sales are another good choice for finding cheap furniture. Spend a morning going from one garage sale to the next to find the best deals.
Also, visit auction houses and even try to buy furniture from family and friends. It might take a little bit to get everything you need, but you will be pleased with the end result, especially when you see how little it all cost.
14. Cut the Cord
Did you know that the average household pays $107 a month for TV services? That includes satellite and cable TV (Pressman, 2018). That number would likely be higher, but TV costs aren’t increasing as rapidly as in the past because so many people are cutting the cord. Fewer households have satellite or cable TV, and those without it are saving large sums of money.
Consider cutting the cord or scaling down on your channels to save money. If you decide to cut the cord completely, you can pick up a service such as Netflix or Hulu for much less than cable or satellite TV. You might not have access to as many television shows, but you will save a considerable amount of money. Plus, you’ll have more free time to do the things you love.
15. Offer to Fix Things Around the Rental
Are you skilled with a hammer and a saw? Do you have a knack for fixing things? If so, you might be able to reduce your rent by fixing up the property. You need to talk to your landlord about this first before moving forward. If your landlord agrees, get it in writing. You need an ironclad agreement so your landlord doesn’t accuse you of withholding rent down the road. Once the agreement is in place, get to work. You can make your rental an even better place to live and pay less in the process.
16. Get Renter’s Insurance
Renter’s insurance costs an average of $16 per month. That comes to $187 a year (ValuePenguin, n.d.). You might wonder why you need to spend money to save money, but this is a great investment that can protect you if anything happens.
Just imagine if someone came into your rental and stole all of your possessions. Would you have enough money to replace everything? No, but you could make a claim against your insurance and replace your items.
What if your dog bit a visitor and that person filed a claim against you? A judgment could bankrupt you, but your renter’s insurance would cover the costs.
Renter’s insurance will even cover the costs if you have to make an alternate living arrangement after a fire or another disaster. This will give you peace of mind and protect you in case anything happens.
17. Protect Your Security Deposit
It’s normal to forget all about your security deposit after you sign the lease. You’ve handed the money over and it’s disappeared into a dedicated account. However, that money is still yours and you can get it back when the lease is up. It’s critical to protect your security deposit so you don’t waste the money.
There are various reasons that landlords keep security deposits (Eberlin, 2018). Understand the situations and avoid them so you can get your money back.
First, landlords keep the security deposit when tenants break their leases. If you break your lease, your landlord will take the amount you owe out of your security deposit. If there is any money left over, you’ll get it. However, if the security deposit doesn’t cover it, you’ll be on the hook for the rest. That means you should always finish out your lease.
Failing to pay your rent is another reason your landlord will keep your deposit. Make your rent payments on time every month so you don’t end up losing your deposit.
Your landlord will also keep your deposit if you have unpaid utilities. Also, if there is damage to the property or the landlord is left with abnormally high cleaning costs, you will surrender your deposit.
It’s easy to avoid these situations. Take care of the property, pay your rent on time, and honor your lease. Then, you can expect to receive your deposit when you leave.
18. Sign a Longer Lease
Most landlords offer a standard year-long lease. Then, when the lease is up, the tenant has to renegotiate or move. That might be the standard operating procedure, but it does not mean it’s the right option.
Instead of signing a year lease, consider signing a lease for two years. A two-year lease can save you a considerable amount of money (Schreck, 2015).
First, you won’t have to worry about your rent going up after the first year. Your rate will be locked in for the duration of the lease.
Second, some landlords are willing to offer lower rents to people who sign longer leases. Landlords don’t want to fill vacancies, so many will give you a better deal.
Then, of course, you won’t have to move for at least two years. Moving is also expensive, so this will save you some additional money.
19. Get a Discount for Flaws
Before you rent a house or apartment, you will walk through it. Examine the property, looking for any flaws. If you find anything, ask the landlord to reduce the rent. Think of this like negotiating for a used car. If a car has a scratch on it, you will ask the salesperson to lower the cost. The same is true if you have issues in the rental. Just make sure the issues are something you can live with before asking for a lower rent. Otherwise, you will need to ask the landlord to fix the problem.
20. Wait for the Right Time to Rent
If you aren’t in a hurry to move, you can save money by renting during the right season. There are usually lots of rentals available during the summer, but the demand is also high, so landlords often charge higher rates. However, the demand is much lower in the winter, so landlords are more willing to lower their rates (Angulo, 2018).
December through March are the prime rental months for people who want to save money on rent. On the other hand, May through October are the most expensive times to rent. The savings can add up to hundreds of dollars in a single year if you rent at the right time. That’s a good reason to spend a couple more months at mom and dad’s house, isn’t it?
21. Stay Put
If you are serious about saving money as a renter, stay put instead of moving. In 2015, renters who moved ended up paying $3,946 more in rent a year compared to those who stayed in the same rental (Shaver, 2017). Rental hoppers paid 5.6 percent more in rent on average, while those who stayed in the same spot only paid 3.6 percent more. That’s an excellent reason to find a place to call home and stay there for as long as you can.
22. Beware of Rentals With the Utilities Included
Renters love the idea of staying in places where the utilities are included in the price of the rent. They don’t have to worry about a high energy bill breaking the bank, and they assume they are saving money. However, that is not always the case. Landlords who include utilities in the rent are often concerned about energy usage. Energy prices are on the rise, and many think they need to charge extra just in case a tenant wastes energy (Jarry-Shore, 2011). Then, some limit the amount of energy that can be consumed. Neither situation is ideal.
You can save more money by estimating the cost of the utilities and then reducing your energy consumption. This gives you more control over how much you will spend and can help you save money on rent.
23. Renegotiate When Renewing Your Lease
You can expect to save money if you stay in the same rental. However, you can save even more than expected if you renegotiate your lease (Trulia, 2014).
It’s not unusual for a landlord to notify a tenant about a rental increase before the new lease is issued. Begin by looking at the rents in the area. Will the increase push your rental over the average cost for the neighborhood?
You also need to consider the market as a whole. Are landlords having trouble finding tenants to fill vacancies? That can help you. Also, see if rental rates are falling. You can also use that information when negotiating.
Next, consider what you bring to the table as a tenant. Do you always pay your rent on time? Do you keep the property in good shape? If you are a responsible renter, your landlord will want to keep you for the long term.
Use the information you have gathered to negotiate the lease. If your landlord doesn’t budge, ask for other perks that will make up for the rent increase. Try to get something out of it so you can walk away feeling good about the process.
24. Always Pay the Rent on Time
Most states allow landlords to charge late fees if the rent is not paid on time, as long as a certain amount of days has passed (Stewart, n.d.). Tenants are usually given three days after the due date to pay the rent without incurring any fees. Fees are also typically required to be a certain percentage of the amount you pay in rent. In most cases, landlords charge a 5 percent late fee. However, if your rent is extremely late, the landlord might be able to charge more. You can find information regarding late fees in your lease.
Fortunately, late fees are easy to avoid. Pay your rent on time every month so you don’t have to worry about wasting money.
25. Beware of Walkable Neighborhoods.
Many people think they will save money by renting in a walkable neighborhood. They can walk right over to their favorite restaurants and shops, and maybe even to work. That cuts down on transportation costs quite a bit.
However, rentals in walkable neighborhoods are more expensive (Starrs, 2014). Unless you have extremely high transportation costs, you will not save money. You will also likely be able to get more square footage for less if you live outside of a walkable area.
26. Don’t Pick the First Rental You See
If you were shopping for a TV, you wouldn’t go in and grab the first one you see. Instead, you would visit several websites and stores before making a purchase. During that time, you would compare features and costs to find the best value for your money.
The same should be true when shopping for a rental property. Look at several options and compare them before making your decision. This will make you less likely to rent an overpriced house or apartment.
27. Remove the Middleman
If you are working with a budget, you should not use a real estate agent to help you find a rental. Deal with the landlord directly. It is easy to find rentals online with the landlords’ contact information. You will save on expensive commissions if you go this route.
28. Choose a Rental With a Washer and Dryer
Trips to the laundromat can be expensive. When you consider travel costs and the quarters you have to put into the machine, it costs about $3.12 per load at the laundromat (Hamm, 2017). Compare that to $0.97 per load at home and it’s easy to see you can save some serious money if you have access to a washer and dryer in your unit. Of course, the money you will save will be greatly reduced if you have to purchase the washer and dryer yourself. If you do have to buy these items, it’s estimated that you will need to wash 605 loads of laundry to hit the break-even point. Then, you will begin saving money.
29. Get Your Credit in Better Shape
Did you know that landlords sometimes charge tenants more if they have bad credit (Steinbarth, 2019)? This often starts with a larger deposit. Many landlords include a provision that the extra security deposit can be used to cover missed rent payments.
Then, it is often followed by higher rent. Some landlords are willing to lower the rent if the tenant’s credit improves, but others keep the rate the same no matter what.
If your credit is less than stellar, start working on it. Make all your payments on time and reduce your debt-to-credit ratio. It will take some time to improve your score, so start working on it now.
30. Consider a Co-signer
What if your credit is bad and you need to move now? You can get a co-signer for your rental (Schreck N. , 2013). A co-signer is a third party such as a parent who is responsible if you do not pay your rent. Landlords who charge higher amounts for people with bad credit typically lower the amount if a co-signer is used. Just make sure the co-signer has good credit or you will be back in the same position you were in before.
31. Check the Lease Before Signing
Most landlords are honest people, but you never know when you might come across a shady property owner. Read the lease carefully before signing it. Look for any hidden fees that you will have to pay. If you see anything that doesn’t look right, discuss it with the landlord. Do not get yourself in a situation where you are bogged down with fees that you cannot (and should not) pay.
Start Saving Money Today
Renting a house or an apartment is often more affordable than buying a home. However, you can end up overpaying if you don’t use the correct strategy. These tips will help you save money on your rental payments and more. Just imagine all the extra money you will have when you follow these tips.