Take one look around at the rental market and you’ll find that the hunt for a one-or two-bedroom apartment asking rental price is getting steeper. It feels like every year that goes by, you’ve got to dig deeper into your wallet in order to find a place.
Indeed, rent affordability is starting to become steeper and harder to obtain these days. Since 2010, the average tenant has spent 30% of their income on rent. This is a huge deal, as looking back to before 2000, Americans were only spending 25% of their income on rent.
So Why Is It Getting So Expensive?
Before digging into that question it does pay to know that mortgage affordability hasn’t shifted all that much. In 2010, at the same time tenants were paying 30% of their income on rent, homeowners were attributing 15% of their income to the mortgage of a house.
That’s a really weird system, especially since houses are supposed to be the more expensive thing, rather than the apartments. So what’s the deal? Why has rent exploded? And why have wages stalled out?
Well, a lot of that has to do with demands. When the housing market crashed in 2008, many people turned to apartments in order to cover their housing needs. The problem with that is that the rental market wasn’t prepared for this at all.
The economy was crashing and the construction of new apartment buildings wasn’t enough to cover the flood of people who were without homes due to this crisis.
Because of this, the rental affordability has been chaotic for a while.
According to Housing and Urban Development, it was 22% from its peak in 2001, but up 7% from its low point in 2018’s third quarter.
There’s no knowing where the numbers will go, but make sure to keep an eye on rental rates in your area. On top of that, here are some strategies we’ve put together to make your rent a little bit easier to handle with.
Find A Roommate
Probably the ultimate way for cutting down costs and the most obvious one, but it seriously saves you a lot of money. If you look at the average cost of a one-bedroom apartment in 2020, you’ll be paying close to $1,000 per month. On the other hand, a two-bedroom apartment will cost roughly $1,200.
While the rent is obviously higher, remember you’re splitting the costs, and therefore, you’re saving close to $400 each month. That money can then go to groceries, utilities, electricity and the internet (which you can also split the cost on).
The only negative aspect about this has more to do with the person that you picked as a roommate. They could be a complete jerk. But that risk can be mitigated if you look to friends or extended family as potential roommates.
Negotiate A New Price When Signing A New Lease
In order for their business to thrive, landlords want to keep their tenants.
Especially ones that haven’t caused many issues to them. Every time someone moves, it costs them money to search for someone else to replace you.
Because of this fact, you can get a little bit of leverage from this when it comes to signing a new lease. Before you go signing your new lease, take some time to research for similar apartments in your area and see how much rent is being charged. You may be able to knock the price down a little bit if you find that most apartments in the area are charging slightly less money. It also helps if you’ve been a good tenant as well.
A word of warning about this strategy though: be sure you know who it is you are dealing with. If you’re renting from an independent landlord, they’ll have more wiggle room to negotiate prices.
On the other hand, property management companies will be more restricted. With that in mind, if you’re dealing with a company, you might have to find a way to sweeten the deal.
Pay In Advance
While this is a more expensive option, it can save you money in the long term. Because the landlord doesn’t have to worry about rent from you for a period of time, they may be willing to cut a discount for you when you do this.
What’s nice about this is you don’t need to be paying way in advance or anything like that. If you can afford to pay for a few months in advance and upfront, they’ll likely give you a discount.
This tactic is nice, but again, make sure that you have enough money to do this and you can afford to do it without putting yourself into harm’s way. You don’t want to be getting into debt over using this strategy too much.
Sign An Extended Lease
As mentioned above, landlords prefer people to stay in their apartments for a long period of time. They like that stability. If you can sign a lease with them that is a stretch from the typical lease, they may be willing to cut the price down a little for you.
Trade Your Parking Spot For Lower Rent
Some apartments have parking spots allocated to the apartments and usually the landlord charges for that spot. If you’re the type of person who doesn’t have a car or has no use for a parking spot at all, offer to give it up in exchange for lower rent. It’s not that big of an issue as the landlord can easily turn around and sell that extra spot to someone who needs an extra parking spot.
Apartment Hunting In Winter
As weird as it is, this can be a good way to save a lot of money. The winter seasons are tough on a lot of people. But that’s especially true for landlords. Most people don’t want to be leaving their apartments in the middle of winter. Not only that, but some people will still move out anyway.
As a result, landlords have to deal with the fact that they’ll often lose a fair bit of money during the winter months and will have to come up with something to get people to move into their apartments.
As such, many landlords are likely going to be charging lower prices for rent during these months. It’s a stark comparison to the summer months when most people typically move. During those times, landlords are okay with charging higher or about the same rates as before. There are plenty of students looking to move in during this time and many others may be contemplating moving then, rather than waiting until fall or winter when it gets colder.
This strategy is leveraging supply and demand. Since the winter demand is low and supply is high, prices will generally be lower than most. And you’re locked into that price for a full year which is even nicer.
Look At Private Rentals
Private rentals are individuals who own a property, rather than a business.
You’ll find those who own apartment complexes are businesses in most situations. Though the differences between these two don’t end there.
The biggest difference is their overall stance in price. As mentioned earlier, individuals who own a property or two for rent are more lax with their pricing compared to businesses. A homeowner in most cases wants to make enough to cover mortgage and maybe make a bit of extra cash.
Businesses, on the other hand, want to turn as much of a profit as they can.
As such, many private rentals are willing to take more liberties. They might not care as much if you were evicted or that you want lower rent.
It all depends on the person. Either way, so long as you’re being open and honest with them, you can avoid a lot of surprises and may be able to find a cheap place to live in the process.
Moving To A Different Part Of Town
This is another big method to consider in lowering rent. As someone who generally looks at rental prices, one thing we’ve noticed in every city you go to, the more central you are, the more rent you’ll pay.
With this in mind, thinking of places like LA or New York, if you want to be in the city, you’ll be looking at well over $1000 a month for rent on average. However if you go to emerging cities like Oklahoma City and El Paso, you’ll find rent to be drastically lower. The average in those cities are $783 and $789 a month respectively.
Offer To Work For Them
The life of a landlord is one that is constantly busy. From answering emails and texts to addressing issues with buildings or individual apartments. There is constant demand for them. As such, they’re going to need extensive staff on hand that they can call up and address issues.
If it’s not too much of a hassle for you, you can always take the time to work for them a little. From repairing appliances to even cleaning apartments, it saves them the time and the hassle of calling up a company to deal with the problem. In return, you may be able to knock off a few hundred dollars depending on the amount of work you do.
The key is to always look around to see if there is a need. You can even consider other simple tasks like mowing the lawn or trimming hedges.
The final thing we want to bring up are referrals. As we’ve brought up a few times already, your landlord is busy juggling all kinds of things. Any help at all that you can provide can be paid forward in lower rent or cash. In this instance, if you’re able to refer people to your landlord, you are saving them plenty of time and some money as well, since they won’t need to advertise as aggressively.
The only snag to this plan is that it depends on your landlord. If you are renting from a private rental, chances are they’re not going to be in huge need for referrals. After all, they only have a few small units and have no need for that.
You’ll likely see these offers to be more prominent in cases where the landlord is a part of a larger apartment company.
You Can Easily Save More Money While Renting
All of the ideas above are great on the surface, however these only really help you while you’re looking for apartments and making negotiations. What else are you able to do after everything is said and done and you’re living in the apartment? Not to mention, what if you’re stuck in the apartment and have no other option?
Well, in those situations, here are some strategies to help you lower expenses in other areas.
Save On Utilities
According to the Department of Energy, Americans spend roughly $2200 per year on utilities. That’s $183 each month. Half of that goes to heating and cooling our homes.
The thing is that a lot of the energy (and money) goes to waste as many of the appliances that are used to heat or cool homes and apartments are inefficient. You’ve also got drafty windows and doors, which make it harder to keep heat or coolness.
With this in mind, even a small upgrade to your old appliances or making a few repairs can save you lots of money. That being said, you should be talking to your landlord first if you need to make any drastic changes, so they’re on the same page.
Change Cable/Internet Providers
These days we have internet providers, but some of us may have cable as well. Regardless of it, if you’ve got one or both, chances are you are spending way too much money on stuff that you don’t even need.
For cable, it’s random bundles or packages that give you channels you don’t even watch. For the internet, it could be the speed that isn’t necessary for the amount of devices that you’ve got.
You can easily cut costs by downgrading your plans and removing packages that you don’t need. Or if they’re being unreasonable, you can switch providers if all else fails.
Removing Unnecessary Expenses
The first one that comes to mind is cable. Every year, more and more Americans are cutting the cord to cable and opting for streaming services. About a fifth of Americans have decided that they’ll be living without cable or satellite in 2020. This is according to eMarketer who also predicts that that number will jump to 27% by 2023.
Our suggestion is to consider it heavily, as major streaming services offer great content at a fraction of the cost. Most of them charge between $10 and $20 a month for simple packages, which still offer a plethora of content. You can even split this cost easier with friends and family.
Take Up Cooking
There are a tonne of recipes online and all demand a range of skill. As a result, many people are finding it easier and healthier to take up cooking and cook simple meals. You don’t even have to start cooking three meals a day if you don’t want to.
All of that being said, constantly dining out and going for the most convenient option can be expensive, and so, it’s cheaper if you take up cooking your own meals. Again, there are tonnes of easy recipes with some only requiring three ingredients.
If you cook, that’s way faster and better than ordering take out.
Avoid Credit Cards To Pay Rent
The final thing we’ll mention that’ll help you to save money is to never use credit cards to cover rent. Even if credit card companies have incentives like cashback or other rewards, it’s not worth it. In many instances, property manages will hit you with a service charge, which will exceed any sort of cashback you’d get.
On top of that, you could risk overloading your credit card, which in turn will hurt your credit score. Even if you have the money to cover it already, it’s easier for you and your wallet to use your real money first.
At the end of the day, keep in mind that you don’t need to use every strategy we’ve mentioned here to save money. Look at your own situation and see what would make the most sense in your case.
Moving to a different town or further away from work may not be a realistic idea for you and the savings may not be all that worth it if you’re leaving behind friends, family, or making it harder for you to go to your job.
While these changes will save you money, there are other costs to them as you can see. These decisions take time to mull over and to consider which one is the right one for you.