With rent climbing higher than ever, these tips can help you save money and stay within your budget.
If you’re apartment hunting right now or are on the verge of renewing your lease agreement, you’re probably noticing a trend. The rent is getting higher and higher. After a slump in rental prices caused by the pandemic, the price of rent is rebounding by hundreds, or even thousands, of dollars. Rent has already been climbing steadily over the past few decades, but this recent spike is pricing many people out of their homes or cities.
Thankfully, not all hope is lost for renters. While the high cost of rent is scary, there are ways you can reduce your monthly payments or find cheaper rates that fit your budget. Sometimes, you can negotiate with your landlord based on years of good behavior as a tenant or in exchange for services like maintenance repairs. Other times, it’s changing the location of where you live or how big your space is. Here are 10 tips for how to save money on rent.
Why is rent so expensive right now?
If it feels like rent is especially high right now and just keeps getting higher, that’s because it is. Due to a variety of factors, the cost of monthly rent has been climbing all over the U.S. But why has rent suddenly gotten so expensive?
The pandemic is partly to blame. When it began, many people moved away from big, pricy cities and metropolises seeking more room and space. With more units available and less demand, many landlords lowered their rents. But now, with people moving back to big cities, the demand is back and prices are jumping accordingly, with rents adjusting to and surpassing pre-pandemic levels.
Because of the extremely hot and competitive housing market, more people are staying renters instead of becoming homeowners. This means there are more and more people looking at and applying for a narrowing amount of rental units.
The lack of available units and rental units is another factor. There are simply not enough apartments and rental spaces available on the market to meet the large demand. Knowing that renters are desperate and have few options, a landlord can charge inflated prices.
These and other factors combine to make an expensive, difficult-to-navigate rental market. Potential renters also face challenges like real estate agents or investors with deep pockets who can pay upfront for a whole year or pay far more than the landlord is asking for the rental price.
Higher rents also mean a higher security deposit and other fees associated with renting like getting a background check on your credit report. If you don’t have enough savings, it’s hard to afford this process multiple times.
Combine all this and the high rental rates with the increasing cost of monthly expenses like utility bills and groceries, and lots of people are feeling the pinch right now. Luckily, there are steps you can take to save money and keep your rent down.
Tips for saving money on your monthly rent payments
Is your rent too darn high? Try these tips on how to save money on rent at your current or future apartment.
1. Move away from a city center
Sorry Petula Clark, but downtown is no longer the place to go to escape your worries and not be alone. Why? Because living downtown or near the city center is generally more expensive and you’ll likely need a roommate to afford it.
There’s more demand to live close to the heart of a city. It’s usually closer to offices and work, and it also lets you take advantage of all the perks of living in a big city. Dining, shopping and entertainment are all close by. But, you do pay a premium in rent for that access and proximity.
Even in the most expensive big cities, you can find more affordable rents in outlying neighborhoods and districts. When it comes to finding lower rental rates, choose your location wisely and live outside the city center. Yes, you’re not as close to all the city action. But you will save more money to actually enjoy those big-city attractions.
2. Find a smaller unit
Smaller apartments will have a smaller price tag. If you want to save money on rent, downsizing the size of your apartment is a great way to do so.
Larger apartments like two-bedroom apartments will always fetch higher rent. They’re bigger with more square footage, storage and other desirable amenities. So, if you’re finding yourself priced out of your two-bedroom apartment, look into smaller options like a one-bedroom apartment or a studio. With less square footage, these smaller apartments offer discounted rent.
You sometimes don’t have to look far for a more affordable new apartment, either. If you really like where you’re living but can no longer afford your current apartment, look at other units in your apartment complex. Apartment complexes will usually have numerous unit options size-wise. Yes, it does mean you’ll have a smaller room and smaller apartment overall. But it’s also a better deal.
3. Move in with a roommate
Having a roommate is one of the oldest tried and true ways to save money on rent. If your apartment or house is big enough to accommodate it, sharing the space and costs with a roommate — or several — helps a lot rent-wise. Everyone in the house splits the rent, so when it comes time for the landlord to collect rent, it will hurt your wallet a bit less.
Having roommates is also a great way to keep an apartment or house if rent has suddenly increased. If the rent has become too high but you can’t bear to part with your beloved home or moving out isn’t feasible for you, start looking for roommates. Living with a roommate, you can also split other housing costs like utility bills. It keeps costs down for everyone in the apartment or house.
Of course, this option won’t work for everyone. Some people value their personal space and alone time too much. Others don’t have big enough units to accommodate more people. But it can also be a lot of fun. You can meet new people and make new friends. Or, you can live with friends or move in with a significant other.
4. Pay more money upfront
If you have enough savings, you can offer the landlord more money upfront in exchange for reduced monthly rent. Think of it as similar to a down payment on a house. The more you pay upfront, the less you have to pay per month. For renting, it would reduce the amount you owe each month.
This is a more unconventional option, so you need to discuss it with your landlord in advance to see if it’s an option they’d consider.
5. Sign a two-year lease agreement
Scared of those pandemic rent price jumps that are going on? Rentals that were far cheaper in 2020 and 2021 now upping rent by hundreds or even thousands of dollars? One way to avoid those rent hikes is by signing up for an extended lease.
Instead of a standard one-year lease, sign an extended lease for two years or longer if you really like the place and want to stick around. There are numerous benefits to signing a long-term rental contract.
First, since they’ll have a new tenant locked in for several years, a landlord will sometimes reduce the monthly amount for rent. Since they know they won’t have a vacancy for a while, a price cut is sometimes acceptable.
Also, by signing a long-term lease, you can lock in the current rate for longer. After one year, even if rates are going up in other units, yours can’t change for another year. It’s good protection against a fluctuating market and high demand.
6. Search for rentals in the fall or winter
The time of year you’re looking at new rentals can also influence the price of rent because demand varies throughout the year.
Summer is usually the worst time to look for a new apartment. For one thing, the school year is over, so it’s an ideal time for families to move. People also have more time and availability on summer vacation. College students are also out for the summer and are moving cities. This time of flux for work and school means there are lots of people looking for new places to live.
Time your move and apartment search to happen during the fall and winter to find a better deal. Schools will be back in session, families are busy and there’s less hustle and bustle in the renting market. The cost of rentals may also be down due to reduced demand during this time period. Even if there’s not a big difference in cost, you can take advantage of the lack of demand to negotiate for less money.
7. Give back your parking space
If your unit comes with a parking space but you don’t have a car or use it, you can use it as a negotiation tactic.
Especially in the middle of a city, parking is in high demand. Landlords who can provide spaces to park cars have a definite advantage. Renters prefer to have a designated spot instead of hunting for parking on the street. It’s also safer for the car.
So, if you have a space you don’t intend to use, you can offer to give it back in exchange for reduced rent. In large apartment complexes where there aren’t enough spaces for all the tenants, your landlord might give you a discount for this convenience.
You’ll also save yourself from having to pay the additional fee that usually comes with having a parking space.
8. Look for units that aren’t updated
Newer and flashier comes at a premium.
One way a landlord can entice applicants is by updating units. Those fancy new apartments with updated appliances, granite countertops, hardwood floors and other splashy amenities will cost more because of all those upgrades. Yes, they look great. But the amount the landlord is charging is far more than the unit is actually worth.
To save money, look for units that haven’t been recently updated. This usually means they’ll have older appliances. They aren’t as attractive, and sometimes, they’re inefficient appliances because they’re not the newest models. But they’ll still get the job done. And, if they don’t work or end up breaking? That’s what landlords and maintenance are for.
Another way to save money on rent? When given the option between a furnished and an unfurnished unit, opt for the unfurnished place. They’re more affordable. Plus, it’s always more fun to bring your own furniture and make the place your own.
9. Offer to fix things yourself
Are you handy at fixing things? That may earn you a break on rent.
A landlord needs someone to fix things and offer maintenance services for their units. Usually, they’ll source this out. If you have verifiable experience as a handyman or can show your adeptness for fixing things, that someone could be you.
In exchange for your help around the property fixing minor issues and doing small repairs, your landlord may offer to discount your rent in exchange for these services.
10. Negotiate
Finally, one of the simplest ways to save money and pay less on your rent? Negotiate for a lower rate with your landlord.
As with any negotiation, it may not always work. Especially right now, landlords might not negotiate. But it never hurts to ask, and there are some circumstances where it can come out in your favor.
Say you’ve lived in the unit for a long time and have been a model tenant, but your lease is almost up and you’re facing an increase. Now is an ideal time to talk with your landlord. As a good tenant, you have some leverage. Explain that you want to stay but the new lease amount is too much. You can request a reduced amount based on your history as a model tenant. Your landlord may or may not go for it, but if they do, congratulations.
How much should I spend on paying rent?
The general rule of thumb is that you should only spend around 30 percent of your gross monthly income on rent. The idea behind this is that it creates a balanced budget. That goes toward your housing cost, leaving 70 percent for everything else like food, utilities, bills, savings and more.
This is a good idea in theory, but it definitely doesn’t apply to everyone and it can vary. You can always find an affordable place that’s under budget and less than 30 percent. Or, maybe you’re paying a bit more than 30 percent for rent, but you don’t have as many additional expenses.
The 30 percent is a good baseline, but it does vary. So, figure out what works best for you and your budget. You can check how much your rent is per month using our rent calculator.
Save more when the time comes to pay rent
Being able to afford rent is a serious challenge these days. These tips on how to save money on rent will pay off come the beginning of each month.
Source: rent.com