Elizabeth Hirschhorn, the Brentwood tenant who did not pay rent for her luxury Airbnb rental for 570 days, moved out of the unit on Friday.
The move was exactly one month after The Times chronicled Hirschhorn’s contentious tenancy, which began with a cordial stay on Airbnb and ended with her and Sascha Jovanovic, the landlord and property owner, suing each other.
“I’m a little overwhelmed, but I finally have my home back,” Jovanovic said. “I had such a peaceful weekend once she left.”
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During her stay, which began in September 2021, Hirschhorn said that the lease was extended off Airbnb and that the unit was subject to the Rent Control Ordinance, so Jovanovic would have to evict her if he wanted her to leave. She also argued that she didn’t have to pay rent since Jovanovic never obtained an occupancy license for the guesthouse.
Jovanovic, who lives on the property, was at the home on Friday being interviewed for a documentary detailing the battle between him and Hirschhorn when he saw three men, who turned out to be movers, walk into the guesthouse.
He said he asked why they were there, and they didn’t clearly say why. He suspected she could be moving out but feared it also could be a home invasion, so he called the police.
The police arrived, and once all of Hirschhorn’s belongings were packed, they escorted her off the property, Jovanovic said.
Jovanovic and his attorney, Sebastian Rucci, knocked on the door to confirm she was gone and then entered the guesthouse and found it empty. Within an hour, a locksmith arrived and changed the locks.
As of now, it’s unclear whether Hirschhorn moved out permanently, or if she’s planning to return to the property.
Jovanovic and Rucci said they hadn’t heard anything from either Hirschhorn or her legal team, so they assumed she had moved out for good. On Saturday, Rucci emailed Hirschhorn’s attorney, Amanda Seward, to figure out the next steps regarding Jovanovic’s eviction lawsuit against Hirschhorn.
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“My review of the case law is that once a tenant abandons the unit, the unlawful detainer is dismissed. If you wish, I can file the dismissal, or we can file a joint dismissal,” Rucci wrote.
Seward replied that they “may have jumped the gun,” according to the email exchange reviewed by The Times.
“Ms. Hirschhorn had discussed with me concern over the constant harassment and surveillance, and also the desire to get the things repaired that needed to be repaired. Subject to my discussions with Ms. Hirschhorn, please be advised that you have no authority to change the locks or to assume abandonment of the unit,” Seward wrote. “Further, you have violated the law by entering without permission and changing the locks.”
Neither Hirschhorn nor Seward immediately responded to a request for comment.
Rucci said he’s planning to drop the unlawful detainer lawsuit, assuming Hirschhorn has moved out for good. But he’ll still pursue damages in a separate lawsuit, since he claims Hirschhorn owes roughly $58,000 in unpaid rent. Hirschhorn said she owes nothing since Jovanovic never had a license to rent the unit, and her lawsuit accuses him of multiple forms of harassment and intimidation in attempts to get her to leave the place, which Jovanovic has denied.
Hirchhorn’s tenancy became a viral story in the days and weeks after The Times chronicled the saga. News vans posted up outside the home, and paparazzi followed Hirschhorn whenever she left.
“Drones were flying above my house every day. It was crazy,” Jovanovic said.
Now, he plans to address the mold damage in the unit, which was an issue during Hirschhorn’s stay that eventually soured their relationship. He also plans to get the necessary permits from the city, which was another issue; Jovanovic never obtained a license to rent the unit, and Hirschhorn argued in court that he wasn’t allowed to charge rent on a unit he didn’t have a license for.
After that, he plans to turn the space into a recreation room for his two adolescent children.
“We need to get the bad energy out and turn it back into a happy, family space,” he said.
In another odd twist for 2023, the ability to split up after a divorce seems to be another casualty of the high mortgage rate environment.
Couples who may have locked in a very low mortgage rate in previous years — but who are now seeking to end their marriages — are finding themselves needing to remain in their homes together as high rates make moving out an unaffordable prospect, according to a report at the Wall Street Journal.
“Mortgage rates are over 7% and average home prices have hit record highs,” the report says. “This means more couples can’t afford to leave their home with its less than 3% mortgage interest rates and set up two different households. Renting isn’t always an option either given that rents have risen more than 9% over the last two years.”
The reality has led to awkward arrangements for impacted divorced couples. Separately “assigned” floors for estranged spouses, separate purchases of groceries and scheduled times for doing their laundry, to name a few.
“One woman locks her bedroom door and keeps her supply of batteries and toilet paper in her closet,” the report says. “Many don’t tell colleagues about the set up because it seems unthinkable or they are embarrassed. They try to maintain civility for the kids and hold tight until they can afford to buy, rent and furnish two homes.”
In one example, a couple bought a Mesa, Arizona, home for $600,000 at a mortgage interest rate of 5.62% in the summer of 2022. The initial plan was to refinance when rates improved, but they’re now seeking a divorce and living in a home that has dropped in value.
The couple remains on amicable terms and stayed in the home together for two months, but when it became too awkward they sought out new living arrangements. One found an affordable rental via social media, while the other is staying in the house but is not making any payments on it until it sells.
Another estranged couple in the Phoenix area worked out an arrangement on their home with a 3.25% mortgage rate. The wife bought out 40% of the husband’s equity and agreed to pay the remainder within three years.
“She would have preferred a clean break from her ex, rather than dragging the commitment on for three years, but she says it was the only option given today’s elevated mortgage rates,” the report said of the arrangement.
The wife blamed elevated mortgage rates on the unusual arrangement.
“If rates weren’t so high, I would have sold the house and moved somewhere within the city or refinanced,” she told the Journal.
North Carolina: Where affordability meets natural beauty
Containing the Great Smoky Mountains and plenty of other parks, the draw of North Carolina is both its natural beauty and the relaxed character of the cities that have sprung up within it. From mountains to coastlines, the cheapest places to live in North Carolina offer affordability in a variety of idyllic cities.
The cheapest places in North Carolina to live for renters
It’s nice to see that some of North Carolina’s most popular cities, for everyone from tourists to college students, offer affordable housing that’s even lower than the state’s average. If you long to live in the mountains, then you’re covered. And if you prefer Piedmont or Coastal Plains, you’re also good.
If it’s time to call the Tar Heel State home and you’ve got a tight budget, start your search here. These are the 10 cheapest places to live in North Carolina to check out.
Average 1-BR rent price: $1,359
Average rent change in the past year: -4%
Just north of Charlotte, the city of Mooresville is an up-and-coming suburban town with major ties to the racing community. It’s the home of the North Carolina Auto Racing Hall of Fame and earned itself the nickname of “Race City U.S.A.”
The dedication to all kinds of racing runs deep in Mooresville, but the town is about so much more. Residents enjoy easy access to picturesque Lake Norman, the largest man-made lake in North Carolina. You can explore over 520 miles of shoreline that stretches into four different counties.
Heading back into the main part of Mooresville, you’ll also find a small-town feel infused throughout each activity, restaurant and shop. The historic downtown district has that quaint feel many look for when moving out of a larger city.
One particularly unique draw is that Mooresville offers up more than one opportunity to get close to some exotic animals at both the Lazy 5 Ranch and Zootastic Park.
Find apartments for rent in Mooresville
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9. Chapel Hill
Average 1-BR rent price: $1,794
Average rent change in the past year: -1%
The most well-known attraction in Chapel Hill is the University of North Carolina. Pride in the ‘Heels, the ever-dominant basketball team, is so heavy it’s easy to see why die-hards claim to “bleed blue.”
While you’ll find plenty of college students in the area and activities to occupy them, the city has much more to it. A social place, you’ll find regular road races and festivals celebrating everything from antiques to bluegrass music.
To hit the most happening spot in the city, check out Historic Franklin Street. Here you’ll find dozens of boutiques, nightspots and restaurants.
With miles of trails and a paved Riverwalk right through the center of town, there is a lot to explore by foot in Chapel Hill. Very family-friendly — Chapel Hill offers activities that include visiting the Kidzu Children’s Museum, the Coker Arboretum and the Carolina Basketball Museum.
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8. Apex
Photo source: Town of Apex / Facebook
Average 1-BR rent price: $1,349
Average rent change in the past year: -7%
With a relaxing, small-town atmosphere and the convenience of big-city amenities, Apex works to hold onto its character even as more and more residents join the community.
Get to know the city by taking a walking tour of the historic downtown area. Here you’ll see buildings that date back to the late 1800s — including The Union Depot, listed on the National Register of Historic Places.
Considered one of the most intact, turn-of-the-century railroad towns in the area, Apex takes its history seriously without ignoring the present day. Among the restored buildings you’ll find excellent antique shops and specialty stores — not to mention some highly-revered restaurants.
It’s not all railroads around here though. There’s a nice cultural center in Apex which includes multiple galleries, studio classrooms and a theater.
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7. Asheville
Average 1-BR rent price: $1,544
Average rent change in the past year: +6%
Heading into the mountainous, western part of the state, you’ll find Asheville. This perfect town has eateries and craft brew spots that will wow even the most discerning foodie. The downtown area is walkable enough that you can explore this cool city center on foot.
For a step into elegance and history, visit the Biltmore Estate. Walk the grounds, stay on-site for a night or take a more formal tour. It’s the perfect place to snag a one-of-a-kind piece of art to take home!
Catering to more active folks, the Blue Ridge Mountains offer up ideal locations for apple picking, hiking, biking and even ziplining. For those looking for a home with a vibrant arts scene, the Downtown Arts District of Asheville is full of galleries and museums.
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6. Greenville
Average 1-BR rent price: $915
Average rent change in the past year: -3%
Not too far from the Atlantic coast lies Greenville, a charming, historic city that manages to keep a foothold squarely in modern life.
An outdoor person’s Mecca with proximity to the ocean, local swamps, the Tar River waterway and the Greenville trail system — Greenville offers everything from boating to fishing to hiking and much more.
When it’s time to refuel, the area is also renowned for its barbecue and beer. The county puts on a “Brew & ‘Cue” tour that allows patrons to get their “PassPork” stamped at various locations.
Lovingly called the “Emerald City,” Greenville residents appreciate that their beautiful home is also a thriving cultural, economic and educational hub. It’s home to East Carolina University and the Uptown district, where live music, food and art reign supreme
Find apartments for rent in Greenville
5. Winston-Salem
Average 1-BR rent price: $1,010
Average rent change in the past year: +5%
With a city so nice it earned itself a hyphen, Winston-Salem is one of the more well-known spots in North Carolina. Here you’ll find plenty of history, delicious food and of course, craft beer. There are multiple places to stop around town to sample the latest pour from local breweries.
Mild weather and friendly neighbors combine with a low cost of living to welcome residents to Winston-Salem. Drawing in mostly a younger crowd, thanks to nearby universities, you’ll find many young professionals and growing families. For those families interested in renting a house, the median home price rests at $260,000.
To get a solid dose of local history, visit Old Salem. This area pays homage to settlers from 1766 and is full of historic buildings, costumed interpreters and hands-on experiences.
For those looking for some natural beauty and great shopping, Reynolda Village provides both. Stroll through the gardens before popping into cute boutiques and delicious restaurants.
For exposure to the arts, walk Trade and Liberty streets downtown to see street art, murals and plenty of galleries.
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4. Burlington
Photo source: City of Burlington, NC / Facebook
Average 1-BR rent price: $1,087
Average rent change in the past year: -3%
Another North Carolina town that owes its existence to the railroad is Burlington. It only sprang up because the North Carolina Railroad needed a place to build, repair and maintain the tracks in the area. Still going strong today, Burlington mixes the old and the new to keep things interesting for residents.
A wealth of history combined with a passion for nature conservancy creates a community in Burlington unlike no other. With plenty of shopping and unique dining options — residents have plenty to enjoy in this city.
Visit the Conservators Center to wander through 45 acres of forested area and see over 70 large and small wild cats who call the area home. There’s also Cedarock Park, a 500-acre nature preserve that’s perfect for hiking, horseback riding and disc golf. This affordable area is rich in golf courses as well, making this town perfect for anyone looking to brush up on golf skills.
For the family, City Park offers a large playground and amusement park rides like a miniature train, carousel and airplane ride.
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3. Fayetteville
Average 1-BR rent price: $1,035
Average rent change in the past year: 0%
Just 65 miles south of Raleigh, the state’s capital, Fayetteville is an ideal commuter hub. Adjacent to Highway 95, you can easily go north to cities like Washington, D.C. and New York or take the southern route to Charleston, Orlando or Miami.
For those who want to keep it local, Fayetteville has a thriving downtown area with retail shops, restaurants and an impressive minor league baseball stadium.
You’ll also find an homage to the city’s rich history at the Airborne & Special Operations Museum and at the North Carolina Veterans Park. For some more natural beauty, make sure to stop into the Cape Fear Botanical Garden. The 80-acre site is only two miles from downtown.
Next door, you’ll also find Fort Bragg, one of the largest military installations in the world. Many military families stationed at Fort Bragg call Fayetteville home, giving it a reputation for being a community of ‘history, heroes and a hometown feeling.’
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2. Greensboro
Average 1-BR rent price: $1,117
Average rent change in the past year: +14%
Containing the trifecta of attractive qualities, Greensboro is a city with a lot of economic opportunities, affordable housing and an abundance of activity. This eastern North Carolina city has served as an important location in both the Revolutionary War and Civil War, so there’s no shortage of history around here.
For everyday living, Greensboro is a friendly and diverse community that’s perfect for foodies of every kind. Sample the many locally owned coffee shops or breweries alongside the variety of restaurants. Local farmers and native vineyards are big contributors to the menus around town.
A bit of a college town, you’ll find students attending a wide range of schools including the University of North Carolina at Greensboro, NC A&T State University, Bennett College, Guilford College, the North Carolina Zoo and Greensboro College.
Greensboro also plays host each year to the NCAA basketball tournament, bringing in even more college kids than those attending local schools.
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1. Carrboro
Average 1-BR rent price: $1,227
Average rent change in the past year: -5%
Known to have a progressive vibe, Carrboro is a small town packed full of flare. As far as affordable cities go, Carrboro is rich in offerings. You’ll find craft galleries, indie music venues, progressive theater and exhibitions and more. There’s no shortage of organic grocery stores, farm-to-table restaurants and artsy coffee shops.
Head to Main Street for most of the action around town, including the Carrboro Farmers’ Market featuring local artisans and crafts.
When all the art and culture of Carrboro pique your appetite, this little town has delicious offerings to fill your belly. From burgers to bistros, fine dining to pizzerias, you can eat a different cuisine each day of the week.
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The most expensive places to live in North Carolina
You’ve seen the cheapest places to live in North Carolina, but what about the other side? Fortunately, it’s not all bad. Even the most expensive cities in North Carolina offer up somewhat affordable housing.
Cities like Wake Forest and Garner, which top the list, still maintain an average rent for a one-bedroom of under $2,000 a month. Check out the chart to see where other North Carolina cities fit in.
Ranked City by 1-BR Average + Average Rent
1) Wake Forest: $1,846
2) Garner: $1,501
3) Indian Trail: $1,473
4) Cary: $1,380
5) Charlotte: $1,362
6) Huntersville: $1,341
7) Wilmington: $1,318
8) Concord: $1,294
9) Raleigh: $1,275
10) Morrisville: $1,270
Methodology
Rent prices are based on a rolling weighted average from Apartment Guide and Rent.’s multifamily rental property inventory as of November 2023. Our team uses a weighted average formula that more accurately represents price availability for each unit type and reduces the influence of seasonality on rent prices in specific markets.
We excluded cities with insufficient inventory from our cheapest places to live in North Carolina report.
The rent information included in this article is used for illustrative purposes only. The data contained herein do not constitute financial advice or a pricing guarantee for any apartment.
Inside: Ever wondered how much rent you can afford on a particular hourly wage? Use the rent calculator to see what you can afford on $20 an hour. Find out from the experts in this guide.
Honestly, this is something most people don’t think about until after they get themselves in a troubling situation.
Determining rent affordability is paramount in your financial planning. It’s important to strike a balance between comfortable accommodation and fiscal responsibility to avoid financial strains down the road.
There exists a direct correlation between your income and the rent you can afford to pay. Higher income opens doors to pricier accommodations while lower wages might enforce budget constraints. Understanding this relationship is crucial.
It guides your housing decisions and helps maintain a stable financial footing.
By calculating your rent affordability, you can set a clear budget, establish your housing needs, and navigate the real estate market with ease.
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How much rent can I afford making $20 an hour?
If you make $20 an hour, based on a standard 40-hour work week, your gross income would come up to approximately $3,467 per month.
If you follow the 30% rule, this means you should allocate a maximum of $1,040 each month for rent.
$3467 x 30% = $1040
However, remember this is a rough estimate and your specific expenses and financial obligations should also be taken into consideration before deciding on a rent budget.
What Percentage of My Income Should Go to Rent?
This is a good question to consider.
Even better when you are trying to figure out how much to save before moving out.
The 30% Rule Explained
The 30% rule is a simple guideline suggesting that one should allocate no more than 30% of their gross (before taxes) monthly income toward rent.1
This rule of thumb has been widely adopted as a measure of rent affordability. The beauty of the 30% rule lies in its simplicity and ease of use, allowing for quick budgeting while maintaining room for other essential expenses.
Be Conservative and Stick with 20%
According to Money Bliss budgeting percentages, adopting a more conservative approach to budgeting by allocating only 20% of your income towards housing costs can be more beneficial.
If you follow the 20% rule, this means you should allocate a maximum of $693 each month for rent.
$3467 x 20% = $693
This strategy helps to account for additional expenses such as utilities, unexpected repairs, and other costs that often accompany home ownership or renting.
This reduced allocation promotes being smart with your money to avoid unnecessary financial stress.
When to Consider Stretching the 30% Rule
At times, it might be necessary to stretch the 30% rule particularly in high-cost areas or during short-term situations. It’s crucial, however, to understand the potential ramifications and adjust other spending habits to compensate.
A temporary overshoot could be justifiable if it leads to significant future benefits, like proximity to a well-paying job. Always remember, that this should be an exception rather than the norm.
How Does the Rent Calculator Work?
A rent calculator is a practical tool that aids in estimating the rent you can afford.
This simple calculator is based on your hourly income and spending either 20-30% of your gross income on rent.
Fine-tuning your budget is possible by adjusting the percentage you wish to spend on housing. Remember, the final number serves as a guide and may require adjustments based on your financial situation.
Breaking Down Your Monthly Budget
For savvy budgeters, adhering to the 50/30/20 rule can provide a clear framework for managing your expenses and growing your savings. While at Money Bliss, we went a step further to define it as the 20-50-10-20-0 budget rule. (save-basic expenses-give-fun spending-debt).
This approach gives a precise breakdown of your monthly budget, ensuring that you are living within your means while also setting funds aside for future financial security.
Housing Costs
The basic 50/30/20 rule suggests dividing your monthly net income into 50% for necessities such as rent and groceries, 30% for personal wants like clothing or travel, and designating the remaining 20% for savings goals or debt repayment.
By adding these to your housing budget, you get a realistic picture of your monthly accommodation costs.
When budgeting for rent, one must account for other housing costs. These may include utilities like gas, electricity, and water, as well as internet, cable TV, and trash collection. You might also need to factor in the renter’s insurance and potential parking fees.
Essential Living Expenses
In addition to housing, remember to consider essential living expenses in your budget. These include food, transportation, health insurance, and childcare.
In addition, we advise our readers to put aside about 15-25% of their net income for savings. Accounting for these factors ensures you don’t stretch your budget to the limit solely on rent.
Discretionary spending
While you need to cover essential living expenses, it’s also important to allocate funds for discretionary spending – we call it FUN spending.
This category involves non-essential purchases like eating out, entertainment, vacations, and shopping. Using the 50/30/20 rule as a guideline, 30% of your net income can be put towards these wants, allowing you to enjoy your income while staying financially sound.
Factors Influencing Rent Affordability
There are many factors that impact how much you can spend on rent. As such, this will vary from person to person as situations vary. While these numbers are gross income, you need to realize the amount of money coming out for taxes. Many people don’t understand gross income vs net income.
Furthermore, the cost of living and rental prices in your chosen location can greatly impact how much you can afford. So, use the rent affordability calculator!
Location and Rent Prices
The location of a home greatly influences its rent prices. HCOL vs LCOL is a real thing!
Proximity to the city center, schools, parks, and shopping centers typically equate to higher costs. For example, renting trends in 2023 indicated an increase in prices the closer you get to these amenities.2 By choosing to live a bit further out, you may be able to find more affordable rent payments.
Areas with higher crime rates will have lower rents but these tend to come with more issues.
Size and Type of Housing
The size and type of your dwelling can also significantly affect your rent. Large houses with multiple rooms naturally cost more, whereas smaller apartments or studios are less expensive.
The type of housing also plays a role; for instance, a modern, furnished apartment might cost more than an unfurnished one. Tailoring your choice to your needs and budget allows for comfortable living without overspending.
If you have a pet, don’t forget it may cost more plus you have a pet deposit.
Lease Length Considerations
Lease length can directly impact your rent. Longer leases often equate to lower monthly rents, offering landlords a sense of security. On the contrary, short-term or month-to-month leases typically come with a higher price tag due to their inherent flexibility.
Assess your personal situation and potential need for flexibility before deciding on the lease term.
Also, the amount you need to put down as a security deposit can be negotiated.
Tips to Maximize Your Rent Budget
Plan your budget carefully taking into account factors like income, potential expenses, and the cost of living in your chosen location. So, if you are thinking $5000 is enough to move out, you may be surprised.
Use the 30% rule as a guide but be aware that in high cost of living areas, you may need to adjust this percentage. When searching for a rental, compare the cost and amenities of different apartments in your preferred areas and see if there are nearby neighborhoods with cheaper rental costs.
Also, you may need to embrace cost-saving measures such as cooking at home and shopping frugally to free up more income for rent.
You can learn more about those areas on our site.
Tip #1 – Reducing Costs and Saving
There are several ways to reduce housing costs and save more in this tough rental market.
Consider downgrading to a smaller place or moving to a less expensive area.
Negotiate a longer lease term for a reduced monthly rent.
Maybe even consider becoming a permanent housesitter to free up your budget.
Small changes can lead to substantial savings over time.
Tip #2 -Planning for Future Rent Increases
Each year when your lease is about to renew, always factor in the possibility of future rent increases, which could be influenced by trends in the real estate market and inflation.
Ensuring your income can keep up with these increases is necessary for maintaining affordability. Continually reassess your rent affordability, especially during annual lease renewals or job changes.
Tip #3 – Get Roommates
Sharing your space with a roommate is a practical way to cut down on your living expenses substantially. By having one or more people to share the rental costs, utilities, and even groceries in some instances, you are likely to free up a considerable portion of your budget.
However, it’s important to clearly set boundaries and expectations to maintain a smooth living arrangement.
FAQ on Rent Affordability
Spending more than 30% of your income on rent is generally not advisable. It risks leaving you cash-poor, having insufficient resources for other important expenses like groceries, utility bills, health expenses, retirement savings, or emergency funds.
However, in certain scenarios like living in high-cost areas or prioritizing proximity to work (thus lowering your need for a car), bending the rule temporarily might be justifiable. Always reassess your budget to account for flexibility.
Yes, an increase in your hourly wage can slightly affect the amount of rent you can afford. The raise translates to an increased monthly income, which may enable you to comfortably afford higher rent.
However, it’s important to ensure this does not erode financial stability because lifestyle creep is real. Aim to maintain the key balance between comfortable living and responsible saving.
It’s recommended to reassess your rent affordability annually or when there’s a significant change in your financial situation.
Such changes could be a raise or decrease in income, new financial obligations, or plans to save for major future expenses. Regular evaluations ensure your housing budget aligns with your current financial realities.
Is $20 an hour a livable wage?
Given the average rent in the United States is $1702, $20 an hour is not a livable wage, especially in San Francisco or New York. As such, the maximum you should be spending on rent is $1040.
If workers are unable to afford to live in the communities they work in, it puts the whole system under stress. While there have been movements to create low-income housing, it is slow to happen and for many, difficult to apply.
Ultimately, whether this wage allows for a comfortable lifestyle depends largely on your financial habits, commitments, and where you live.
With good financial planning, including a solidly crafted budget that factors in rent, savings, and living expenses, a $20 hourly wage can indeed cater to a decent lifestyle.
Remember to reassess your budget regularly and adjust as necessary to meet changing financial landscapes.
Making wise financial decisions now can lead to a financially secure future. Now, do you have the habits needed to be financially stable?
Source
FiftyThirtyTwenty. “About.” http://fiftythirtytwenty.com/about.html. Accessed November 13, 2023.
Rent. “Rent Growth in Half of Suburbs Outpacing Metro’s Core City.” https://www.rent.com/research/suburban-growth-outpacing-core-city/. Accessed November 13, 2023.
Rent Cafe. “Average Rent in the U.S.” https://www.rentcafe.com/average-rent-market-trends/us/. Accessed November 13, 2023.
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Screening tenants, especially their financial situation, is the most critical part of operating a rental property. To make sure tenants can pay their rent on time each month, you should run an employment and credit check. Then, you might have to decide whether you’re open to renting to tenants with bad credit.
As a rental property owner, you expect tenants to pay their rent on time each month. Even if a tenant doesn’t have a stellar credit score, that doesn’t necessarily mean you shouldn’t rent to them, particularly if other aspects of their application are a good fit. Here are a few things to remember when renting to tenants with bad credit.
Do I have to rent to someone with bad credit?
It’s up to property owners to pick their tenants. So, you may want to require tenants have a minimum credit score. In many ways, a good credit score signals that an individual is creditworthy and financially responsible, which likely means they can afford to pay rent. However, you might not want to completely avoid renting to a tenant with bad credit.
People have bad credit for many reasons. It doesn’t always mean they haven’t paid their bills in the past or that they’re irresponsible with money. If the renter applicant otherwise looks perfectly suited for your home, you can require a higher deposit or a co-signer to compensate for the poor credit score.
Do most landlords do credit checks?
As part of the tenant screening process, it’s essential to run a credit check. The reports offer a glimpse into the individual’s financial history, including their bill-paying past and whether there are any financial judgments against them.
If someone has a good credit history, they’ll likely consistently pay their rent on time. If someone has a history of late or missed payments, this behavior may continue. In these cases, property owners should dig a little deeper before renting to tenants with bad credit.
What is the lowest credit score to rent a house?
Credit scores range from 300 to 850, according to the credit bureau Experian. Here’s what’s considered a good and bad credit score:
Exceptional: 800-850
Very good: 740-799
Good: 670-739
Fair: 580-669
Poor: 300-579
It’s up to you to decide the minimum credit score that’s acceptable to you. But many landlords set 600 as the lowest score to rent a house.
Things to remember when renting to tenants with bad credit
Even if an applicant has a negative credit score, that doesn’t always mean you shouldn’t rent to them. Here are some things to remember when renting to tenants with bad credit:
1. Understand the reason for the bad credit score
Credit scores come from various factors, including payment history, account balances, length of credit, types of credit accounts and recent activity on these accounts. But, many different things affect these elements.
For example, if someone is a recent graduate or just moving out on their own, they likely haven’t built up a solid credit history, which could show up on their credit report as a low score. Financial changes from getting a divorce, incurring large medical bills or being a victim of identity theft can also ding someone’s credit.
Communicating with the applicant about why their credit score is low is crucial. It will help you understand their situation and build a trusting relationship. The more information you have, the more informed decision you can make.
2. Get proof of income
The screening process should include verifying the applicant’s income. If someone has a steady job with a decent salary, it could overshadow their poor credit score and set your mind at ease about their ability to pay rent.
Ask for pay stubs and contact information for their employer to find out how long the person has worked there and to verify their salary. Make sure their income is at least three times the monthly rent to ensure they can afford it.
3. Check rental history
An applicant’s behavior with previous landlords are a telling sign of how they’ll be with you. If the individual is renting somewhere else, ask for rent receipts showing that they’ve paid on time each month.
Contact previous landlords, as well, to learn more about their rental history. Find out what type of tenant they were, whether they followed the lease, paid rent on time and if they got evicted. If past landlords don’t have good things to say, it’s a good idea to move on to another renter.
4. Charge a higher deposit
Banks often charge people with lower credit scores a higher interest rate to protect themselves against the risk. So, you might want to consider doing something similar.
Increasing the deposit amount could lower your risk of tenants defaulting on their rent payments. If your typical deposit is one month’s rent and a security deposit, increase it to two months’ rent and a security deposit. Make sure whatever you charge aligns with local landlord-tenant laws, which may set caps on security deposits or other fees.
5. Require a co-signer or guarantor
Another option for renting to tenants with bad credit is to ask them to have someone with good credit to co-sign or act as a guarantor on their lease. If you’re not sure of the difference between a co-signer and guarantor, here’s an overview:
A guarantor is usually a family member or friend who agrees to take on the responsibility of paying rent or covering property damage if the tenant can’t. Guarantors sign the lease but usually don’t live in the home.
A co-signer is often a roommate and signs the lease with the right to occupy the home. The co-signer agrees to share the responsibility for the rent, fees and damage. They may contribute to the monthly rent and are responsible for paying when the tenant can’t.
If you allow a co-signer or guarantor, you’ll need to check that person’s credit history and proof of income, as well.
6. Use a shorter lease
The term for most rental lease agreements is one year. Offering a shorter lease term, such as three or six months, is an option for renting to tenants with bad credit. A shorter lease gives the tenant the opportunity to prove they can pay rent on time and protects you in case they can’t by ending the tenancy within a short timeframe.
If everything works out after the shortened lease ends, you can ask the renter to sign a year-long lease.
Renting to tenants with bad credit
Renting to tenants with bad credit is risky. You’re not sure of their financial situation and whether they’ll pay rent. But automatically discounting these tenants because of their poor credit might be a mistake.
If the individual meets all your other requirements and seems like a good fit, consider charging a higher deposit or relying more on proof of income. The tenant will appreciate your willingness to work with them since renting a home with bad credit is challenging.
As a landlord or property manager, securing the best possible tenants for your apartment is crucial. You want someone who’s not only going to pay rent in full and on time but will also be a model tenant. No noise complaints, no property damage beyond normal wear and tear, perfect. The screening process to find this ideal tenant all begins with the rental application form. Not only should this document be comprehensive, but also effective in helping you weed out applicants who just won’t fill those perfect tenant shoes.
While there are a lot of templates out there to help you draft a rental application form, you may want to create your own. If you do, make sure these essential elements come together to paint a complete picture of every person interested in renting your property.
Things to include in an apartment rental application form:
Start with the basics
It’s best to get the basic, essential information out of the way first. It’s an easy section to knock out when crafting a rental application form.
Begin this section with the day’s date. This is important because it lets you manage the first-come-first-serve style that most rental applications get reviewed. You can easily keep everyone in order if you have multiple viewings and multiple applications. You may even consider adding a timestamp once an application comes in for further organization.
The rest of the basics are all about the applicant themselves. Each person interested in renting a single apartment should fill out a separate application, so this area should focus on one person only. Include sections for:
Applicant’s full name
Current address
Home phone number, cell phone number and/or work phone number
Date of birth
Social security number
Driver’s license number (or any government-issued ID)
These last three pieces of information are necessary to run a background check on the applicant. You can explain that to them as they’re filling the form out if there’s concern about sharing this type of information upfront.
Include apartment information
Also within this section, or immediately above or below it, you’ll want to include a few bits of key information about the rental property. You want to add not just the address and unit number, but also details on fees and rent. Provide a space to write in monthly rent, security deposit fee, upfront costs and pet fees (if applicable.)
You can also insert the date the unit will become available or even allow the prospective tenant to fill in their estimated move-in date.
Putting this information here means no surprises for whichever applicant you decide to rent the apartment to. The information on the lease will match what they have here.
Dive into their employment history
The next section should focus on employment. Hopefully, your applicant is currently working somewhere, or at least can confirm a steady stream of income from some source. How else will they afford rent, right? You’ll collect information on their finances in more detail later on, but for now, establishing a work history and monthly income gives you a good snapshot.
In this section, you’ll want to ask for:
Name and address of current employer
Supervisor’s name and phone number
Applicant’s job title
Start date
Monthly income (after taxes)
Get all this information for their current position and ask for it all for their previous employer, as well. Just go one job back to establish a history of employment. It’s also OK if the applicant doesn’t have a previous employer. A first-time renter hasn’t had time to establish a job history, or they worked for the same company for a long period of time. You can look at each individual application to decide whether only having a single, current employer is OK with you.
Other sources of income
It’s also best to leave a space where the applicant can note other sources of income. You don’t need totals at this point, but it’s good to know what to research when doing a credit check. Other sources of income can include:
Inheritance
Annuity
Severance payment
Unemployment
Disability
Social security
A complete list of what types of additional income the applicant has coming in is helpful for you to total up whether they make enough to afford rent.
Gather rental history
Equally important to their finances is the applicant’s rental history. You want to know about their current and past landlord or property manager. You also want to know if they have any evictions on their record.
Collect the name and contact information from the current and previous landlord or property manager in addition to the monthly rent they paid/are paying, the date they moved in and the date they moved/are moving out.
Sometimes, the best resource to learn about a prospective tenant is to talk with other landlords or property managers who they’ve rented from before. You’ll get the inside scoop.
Ask for references
While it’s not a necessary section on your rental application, it’s a good idea to put in one asking for personal references. Your applicant can share names of friends, family or professional contacts that can vouch for their character.
This section should ask for reference names and contact information, although you can also allow your applicant to attach signed letters of reference directly to the application. You can also allow prospective renters to attach a rental cover letter or renter resume to add a little more depth to their application. If you decide to do this, add a note to the reference section that you’ll accept supplementary material.
Get a few extra details
Not all rental situations will need these extra bits of information, so you don’t have to include these sections in your rental application form if they’re not relevant, but it’s good to consider them.
Emergency contact
Having an emergency contact on file for your tenants is never a bad thing. While you don’t really need it this early in the process, it’s easy to work the question in here so it goes into the applicant’s file.
Ask for an emergency contact’s name, phone number and relationship to the tenant.
Other occupants
To make it easier to batch review applications, you should have people list any other occupants who will live in the apartment. This includes roommates and partners. This way, you can double-check you have applications for everyone.
Pets
If you have a property that allows pets, you’ll want to collect this information early. If you have any breed restrictions or limits on the number of pets, you can weed out applicants who don’t fit the bill.
Ask for pet type, breed, weight and age. Leave enough blanks for the total number of pets you allow, as well.
Vehicles
If your apartment has on-site parking available with the unit, you’ll want to know what vehicles will get parked on the premises. Ask for the make, model, color and year of each car, in addition to the license plate numbers.
Request permission for a credit and background check
This part of the application gets you to the next step in the screening process. Here, you’ll need to ask the applicant to give you permission to look up their personal information to run both a credit check and a background check.
Within this section, you can also collect relevant information such as:
Bank name
Bank address and phone
Checking account number
Credit obligations (loans) with a monthly payment
To get ahead of running these checks, also ask whether the tenant has ever:
Been convicted of a crime
Broken a lease
Declared bankruptcy
Been evicted
These are all potential red flags for renting, but don’t always mean an immediate “no.” Having a heads-up they’ll appear on the background check you’ll run is helpful. It also shows you this applicant is being honest about their past.
Sign on the dotted line
Rounding out any rental application form is the signature section. Start the section with a list of fees associated with completing the form and then both you and the applicant should sign and date it. The signatures will validate the document, but also serve as proof you’ve received the accompanying fee.
The application fee should cover specific costs — those of running both the credit and background check, as well as any administrative costs you’ll incur processing the application. This is not a way for you to make a profit on someone’s interest in the apartment for rent.
This section wraps up the application and confirms the applicant’s interest in the apartment. Now you can dig deeper to find out if they’re the right tenant for you.
A rental application form template
Just in case you want a ready-made rental application template, we’ve got you covered. Simply download our PDF or download our word document template and make edits as you need. Anything in italics is an optional section that might not apply to your property.
Are enough rental applications coming?
Now that you’ve got the right rental application form ready to go, the next thing to do is draw in prospective tenants. Make sure you’re finding the best potentials by listing your property in the right location. Go where the renters are looking!
By listing your property on Rent. you get access to in-market renters along with helpful reports to expedite your screening process.
The information contained in this article is for educational purposes only and does not, and is not intended to, constitute legal or financial advice. Readers are encouraged to seek professional legal or financial advice as they may deem it necessary.
You’re going to have to do more than just pay rent to get new digs. Get ready to fork over a security deposit before move-in day comes.
When it comes to renting, there are costs that everyone is familiar with. These include application and move-in charges, first and last month’s rent, utilities, parking, storage and so on. In particular, the security deposit is one large expenditure that’s standard for anyone who signs a lease for a rental property.
The term “security deposit” is pretty vague, though, so a lot of renters aren’t sure what it’s for. For many people, it seems like a way for the property management company to squeeze even more money out of a renter! In this article, we’ll answer all your questions related to this crucial, one-time payment. That way, you’ll be as informed as possible when it comes time to sign the lease and pay all the associated rental fees.
What is a security deposit?
A security deposit is a set amount of money that a tenant pays to a landlord before moving into a rental property. Essentially, it’s like insurance for the managers/owners to protect their property from damage. The amount of money varies by state or property. So, the payment could be one month’s rent, two months’ rent (also known as twice the amount) or another flat fee set by the property manager.
The funds are held by the manager for the duration of the lease. In fact, state laws dictate that the money must sit in a bank account. At the end of the lease, the landlord returns that money to the tenant, in part or in full, following a move-out inspection of the rental. Or, the property manager can keep it to cover damage other than normal wear and tear. If the damage costs less to fix than the security deposit, the landlord will return the remaining amount to the tenant. So, you might not lose all of the last month’s rent, but you could lose some of it.
When do I pay my security deposit?
The entire security deposit is usually paid when you sign the lease. Often, they’ll also be paying for the first months’ rent, last month’s rent and any other related costs. Tenants pay security deposits by check, money order or electronic payment.
How much is a security deposit?
In general, the amount of the security deposit will be the equivalent of one month’s rent, or maybe two. For example, if your monthly rent is $500 and your landlord requires first and last months’ rent for the deposit, you’ll need to have $1,000 on-hand for the security deposit.
Credit score can also impact how much you need to put down. Low credit scores can turn into a higher security deposit unless you have a co-signer.
Other factors, like the rental application, determine how much to charge for an apartment security deposit. A potential tenant with solid employment history and no criminal record is likely charged less. Also, the rental type and quality, state laws and local market rates all play a part. Often, states limit the security deposit amount, so that renters aren’t totally price gouged.
Why do landlords collect security deposits?
While not all property managers collect security deposits, it’s a pretty standard part of the rental agreement. Property ownership is a difficult business with significant risk, so this helps landlords cover their bottom line.
Property owners collect security deposits as a financial safeguard to protect their properties from damage or other irresponsible actions by residents. Here are some examples of what a security deposit would cover.
Property protection
Accidents happen throughout a lease. If a tenant breaks a light fixture or cracks the drywall, the cost to fix those would come out of the security deposit as they were the tenant’s fault. Knowing that they’ll be out of a hefty chunk of change if they aren’t careful incentivizes people to avoid damaging the unit. Renters who want to get their entire security deposit back should treat the apartment with care and respect.
Financial protection
Security deposits also cover any bills or rent that are delinquent at the end of the lease agreement. So, if you were behind on rent for one month and still haven’t paid that back to your landlord by end of the lease, or you have unpaid utilities on your account, they could take the amount out of the deposit.
Pet protection
If you’ll be sharing your new home with a furry best friend, chances are you’ll have to pay a pet deposit, in addition to the security deposit. This would cover any damages your pet makes to the rental, like tearing up or soiling the carpet. Some landlords will also charge a small amount in “pet rent” on top of the deposit.
What does a landlord do with a security deposit?
The security deposit is “just in case” coverage. For the duration of the lease, the funds will be kept by the landlord in a bank account that generally is separate from their business bank account.
Because of this, the security deposit may collect interest. Some state laws say that the tenant gets those earnings when the landlord returns the deposit money, but in others, the landlord retains the interest earnings. This is something to think about and confirm with your landlord before you lease the apartment.
Can my landlord make deductions from my security deposit?
Remember, a security deposit is a measure to protect the property manager, not the tenant. There are certain circumstances under which your landlord can deduct from it. Here are the most common reasons a renter won’t get the security deposit back.
There’s significant damage
Wear and tear are normal and expected, which is why it’s the landlord’s job to fix or repair things like old appliances, worn-out carpeting and mold damage. However, if you gouge a hole in the drywall or generally damage the unit in an abnormal way, it’s your responsibility to pay for repairs, and the cost of such repairs will come out of your deposit. So, if you want to get your security deposit back, treat the rental unit gently.
In most states, though, there are provisions in place to protect the tenants from having unreasonable or unnecessary dollars taken from their deposit by the landlord. For example, in California, landlords can’t withhold security deposits to pay for things like painting or carpets unless they were totally wrecked by the renter.
The landlord is also prohibited from using a deposit to fund repairs for preexisting problems in an apartment. Don’t be afraid to ask for an itemized list of repairs if you suspect something dishonest is going on.
You owe unpaid rent or fees
If you have any late fees or unpaid apartment rent at the end of your term, your landlord can take that out of your security deposit. To avoid this, pay rent on time every month, and keep an eye on related bills, as well! Avoid overpaying, though. If you put down last months’ rent at the beginning, don’t forget and double down!
You broke the lease
Sometimes, a landlord can also deduct from your security deposit if you break the contract without providing adequate notice. So, avoid this unless it’s absolutely necessary. If you can’t get around it, give your landlord as much notice as possible. Everyone appreciates a thoughtful renter.
You left the unit in a mess
Not cleaning the unit before vacating is grounds for landlords to deduct from the security deposit. That’s why it’s always a good idea to make sure the apartment is tidy before moving out.
However, renters are only required to leave the unit as clean as it was when they first moved in, so that’s what you should aim for: that it’s clean enough to move in for the next tenants. Empty the refrigerator, wipe up any big spills and otherwise “broom clean” the place. Most landlords don’t expect it to pass the white glove test but want it tidy and relatively easy for professional cleaners to handle. Don’t lose a months’ rent because you were too lazy to straighten up!
How long will it take to get my security deposit back?
This can vary by the property manager and state, but most require the landlord to return your security deposit within 30 days of the tenant vacating the premises. Your landlord will include the timeframe in your lease, so make note of that when agreeing to the lease. Also, pay attention to how your landlord will return the payment so you know what to expect when you leave your apartment.
If you’re not getting some or all of your money paid back, the property manager has to provide a written explanation detailing why, including an itemized list of deductions. In many states, they even have to provide receipts detailing repairs.
What if I don’t get my deposit back?
If you don’t get all or part of your money paid back, the simple answer is that it’s probably because your landlord had to make deductions to cover costs. If you disagree with the reasons they deducted from the deposit, there are some options for recourse.
First, before you turn over the apartment keys, take pictures of every room and closet. That way, if the manager tries to pull a fast one you’ll have photographic evidence.
Next, if you disagree with the deductions, write a demand letter to the landlord disputing them, and explain why you’re entitled to the deposit refund. Be sure to retain a copy for your files.
If you’re unable to come to a satisfactory agreement, you can file a lawsuit in small claims court, which handles cases valued at less than $10,000. This is a relatively inexpensive and relaxed court option. Or, you can turn to a professional mediator to help everyone see eye to eye.
Are there alternatives to security deposits?
Thanks to rent, application fees, security deposits and move-in charges and so on, renting is an expensive process. Luckily, there are some emerging security deposit options that cost less and are more efficient and painless for everyone involved.
Lease insurance
Increasingly, landlords are pursuing lease insurance options like LeaseLock to eliminate security deposits altogether. Similar to other types of insurance, the tenant or landlord pays a small fee (starting at $19 for LeaseLock) per month for coverage against thousands of dollars in property damage.
Pay-per-damage
Instead of dishing out a huge amount to the landlord upfront as a security deposit, some landlords choose to bill for damages on a case-by-case basis. They can only charge for damages up to the amount of a traditional security deposit, though, and a third-party company oversees the claim and process to ensure the landlord isn’t over-billing the tenant.
Surety bonds
Facilitated through a third-party bonding company, surety bonds allow renters to only pay a small fraction of the security deposit to the landlord. Because the bonding company guarantees that the tenant will pay and abide by the terms of the bond, landlords are able to accept a much smaller amount as there’s legal protection in place.
Do security deposit laws vary by state?
The short answer is yes, security deposit laws can vary widely by state. Some states do not have statutory limits, which means they don’t specify how much a landlord can charge for a security deposit. In that case, the amount is at the discretion of the landlord.
In other states, though, there’s a cap limit to what the landlord can charge for a security deposit. Many states also have strict laws regarding when to return the security deposit to the tenant after vacating the premises. Here, you can find a full run-down of security deposit laws state-by-state.
Don’t feel insecure about security deposits
Having to save and temporarily sign away a month’s rent (or more!) for a security deposit can feel scary. But it’s completely normal and is in the best interest of both parties. If you maintain the terms of your contract and don’t leave anything grossly damaged, you should get your deposit back. So, as long as you keep the parties and destructive animals to a minimum, you’re covered.
The information contained in this article is for educational purposes only and does not, and is not intended to, constitute legal or financial advice. Readers are encouraged to seek professional legal or financial advice as they may deem it necessary.
Inside: Are you thinking about moving out? This guide will help you identify the costs of moving, calculate how much you need to save, and advice on expenses. You need to learn and plan for the practicalities of living on your own.
Taking the leap to move out and start living independently is a significant milestone.
However, it’s important to ensure you’re financially prepared for this exciting new chapter in your life.
One vital step you need to take is to start saving money, essential for covering your future expenses, emergency fund, and even fun activities. Through careful budgeting, consistent saving, and efficient spending, you can make the transition smoother and stress-free.
Around here at Money Bliss, we focus on the need to save money before making a purchase or taking the next step, so you will be better equipped and stay debt free.
This way, you can fully enjoy the freedom and responsibilities that come with having your own place.
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
Why is Moving Out on Your Own Important?
There comes a time in one’s life when one feels the need to spread their wings and live independently. We all wanted to move out at 18 – I remember!
This crucial step, however, requires substantial planning. Yet, most just jump right to moving out.
The key thing you must do? Save. But, why so important?
Here’s why: independence means bearing your own expenses. Rent, groceries, utilities, they’re all on you.
Plus, unforeseen emergencies are less shocking when you have a well-stocked safety net.
What’s a good amount of money to have before moving out?
The amount you need to move out depends on many factors.
However, on average, you should aim to have between $6,000 and $12,000 stashed away before you pack your bags.
This sum would cover initial moving costs, deposits, furniture, essentials, and a few months of rent.
Remember, it’s not just about surviving your first month. You’ll need enough to keep you comfortable while you’re settling into your new life.
How much should I save before moving out?
Remember, there isn’t a “magic number.”
Yet, many wonder is $5000 enough to move out?
Your savings should cater to your housing costs, which ideally should not exceed 1/3 of your monthly income. Besides, factor in regional cost of living, moving expenses, and an emergency fund.
What determines the amount needed?
The amount to save before moving out varies greatly. It hinges on factors like your targeted living area because there is a wide fluctuation of HCOL vs LCOL areas, your projected expenses, and your income level. The rent in one city might be higher than in another.
As well as your personal lifestyle choices and spending habits will greatly affect monthly expenses.
Evaluation: Your Financial Status
Your financial status, including current income and expenditures, plays a crucial role in determining the proportion of your earnings you should save before moving out.
If you have a higher income with lower outlays, you can save more, whereas having roommates can significantly cut down your living expenses, enabling better savings.
A careful review of these factors allows you to create a realistic saving plan tailored to your unique financial circumstances.
You need to make sure you are on track to how much money should you have saved by 25.
Assessing your current income
Take a deep look at your income. How much do you earn each month? How regular is this income? These are vital questions.
Your net income (what you earn after taxes) sets the tone for what you can afford. This is the amount listed on your paycheck.
Learn more about gross pay vs net pay.
Understanding your debt load
Debt can be a significant hindrance when contemplating moving out. How much do you owe monthly?
You need to consider your debt-to-income ratio. This is what mortgage lenders do to figure out if I make 70000 a year, how much house can I afford.
If your debt is taking up more than 30% of your income, you need to be careful on how much you spend on rent and other mandatory expenses.
Learn how to pay off your debt faster using Undebt.it.
Know Your Expenses: Breaking Down the Costs
I’ll be honest. This is what most people overlook when they move out or even purchase a new home.
For instance, the couch I loved couldn’t fit into our new house. Sigh.
Now, is the time to learn how to save 5000 in 6 months.
Identifying the cost of moving
Moving costs can bite! They depend on relocation distance, packing supplies, and the complexity of the move.
Movers can range from hundreds to thousands. According to Moving.com, the average costs for a studio or one bedroom range from $501 – $985. 1
Thankfully, you are young and you can pay friends for help with pizza. But, you still need to account for a moving truck if needed.
Hidden costs you need to consider
When moving out, some costs aren’t glaring. These include fees for installing new services, delivery fees for new furniture, or penalties if foregoing a current lease. Yes, these hidden costs can pile up!
Even, the costs to put blinds up at your new place! A room darkening shade can easily set you back $50; I know, I like my sleep.
So, be sure to consider them when saving for your move.
Setting Up a Personal Budget
A budget plays a crucial role in being financially stable. Period.
Call it adulting if you want to, but you cannot spend more money than you make. That is a recipe for a disaster and way too much debt.
By adhering to a well-planned budget, one can prevent financial stress to ensure financial security and start your journey to financial independence.
How to start a personal budget
Starting a personal budget is simple.
List your income and expenditures. Include rent, groceries, utilities, subscriptions, and yes, even luxuries.
The goal is to spend less than you earn.
Then, you can save and plan for your future.
That means you may not be able to afford everything you want. And using credit cards to fill the gap isn’t smart.
The 50/30/20 budget rule explained
For many, the 50/30/20 rule serves as a rough guide for managing your finances.
It suggests allocating 50% of your income to necessities, 30% to wants, and 20% to savings.
This is a beginner-friendly method to manage spending without feeling overwhelmed.
Starting to use a budget app is extremely helpful.
YNAB
Enjoy guilt-free spending and effortless saving with a friendly, flexible method for managing your finances.
Pros:
Comprehensive approach to budgeting, helping you plan monthly budgets based on your income.
Offers expert advice, making it suitable for those who require an in-depth, forward-thinking budgeting strategy.
Superior synchronization skills make it the winner in this area.
YNAB has extra features like goal setting for budgeting, shared budgeting tools for partners.
Option to manually add and upload transactions from accounts each month.
YNAB prioritizes user privacy.
Avoid These Budget Downfall
The most common expenses that are forgotten are irregular expenses such as vacations, weddings, or holiday spending. These variable expenses do not occur on a consistent schedule.
To manage these, note these big-ticket events on a calendar, estimate their cost, divide by 12, and contribute that amount to a high-yield savings account each month, offering you a guilt-free way to cover these costs without stressing over money.
Make sure you remember all of your expenses by checking out this full list of personal budget categories.
Creating and Managing an Emergency Fund
Why an emergency fund? It provides you with a safety cushion.
This fund prevents unexpected expenses from ruining your plans or sending you spiraling into debt. It acts as your financial parachute when you need it the most.
Around here at Money Bliss, we consider it a staple in financial wisdom.
Ideal size of an emergency fund
As a rule of thumb, your emergency fund should cover at least $1000-2000 in savings. This will provide money to cover a car breakdown or new car tires. Honestly, the goal is never to use your emergency fund.
However, you may look at a bigger rainy day fund that will cover 3-6 months of living expenses. This will provide you with a comfortable safety net against unexpected events like job loss or medical emergencies.
But remember: start small. Even $1,000 can buffer you from financial shocks. Check out these mini savings challenges.
Enough Money for One Year
A year’s worth of savings may sound excessive.
However, it provides unmatched stress relief and financial stability that can be life-changing, especially for young adults.
This tip will change your financial landscape immensely and provide you with more opportunities than you can imagine.
You can handle life’s ups and downs more easily when you have an entire year’s expenses sitting in your bank account.
Raisin
Simply select one of the high-yield savings products offered by their network of federally insured banks and credit unions to begin your savings journey.
You can open a free Raisin account in just a few minutes!
Compare Rates
Better Planning for Potential Bills and Fees
When preparing to live independently, don’t forget to plan for unanticipated costs.
Rental fees and deposits explained
When you rent, you’re likely to encounter a range of fees.
First off, you’ll have to foot a security deposit – typically equal to one and a half month’s rent. This upfront cost acts as insurance for landlords against damages. If you leave the place in top shape, you’ll get your full deposit back!
Additional fees could include application fees or non-refundable move-in fees like background checks. Know what you’re paying for before you sign the lease.
Utilities and recurring expenses
Electricity, gas, water, and internet – these utilities fall on your shoulders when you’re living solo.
These costs can eat a hole in your wallet if unchecked!
To avoid surprises, ask for estimates before signing a lease or find a place that includes utilities.
Other recurring expenses? Consider subscriptions. Gym, Netflix, Spotify – they all add up!
Trim
Perfect for the person who hates to hassle with canceling subscriptions and checking spending.
Trim adds value in such ways as canceling old subscriptions, setting spending alerts, checking how much users spent on ride-sharing apps the previous month, and automatically fighting fees.
Learn More
Go for a Trial Run Before Moving Out
Adopt the practice of “paying rent” beforehand by setting aside a third of your income into a dedicated savings account which can test your financial readiness for the move. See if you can move out and afford it before you actually move.
Remember, being savvy with money while planning to move out involves carefully auditing your spending over the last 3-6 months and developing a budget that accounts for future expenses, savings, and essential purchases.
This may save you headaches in the future.
Smart Moves: Making Rent Like a Boss
You need to understand how you are starting to make financial decisions.
In fact, reading this financial advice for young adults would be helpful.
Understanding rent payments.
Rent payments can be daunting as prices for a single bedroom apartment are $1700/month. 2
Many landlords may tenants to earn at least three times their rent.
Payments are usually due on the first day of the month. Late payments can lead to hefty fees!
Stay organized by setting reminders or setting up auto-pay.
Considering a roommate.
On the fence about getting a roommate? It’s worth considering!
A roommate can drastically cut your living expenses. Half the rent, half the utility costs… that sounds like a sweet deal.
On the flip side, you may have less privacy and there can be disputes.
However, with clear communication and shared responsibilities, it can be a great experience. It’s a great option if your income is tight. Choose wisely!
Opting for second-hand furniture
Furniture expenses can add up quickly, but there’s a savvy solution: opt for second-hand furniture! Yes, it’s cool to be frugal.
In fact, vintage pieces can add character to your home. Perhaps snag a few items from your parent’s home, Buy Nothing Group, or thrift stores. It’s not about being cheap, but about being smart!
You can always upgrade later.
Key Takeaways Before Taking That Leap
Moving out with roommates not only gave me a firsthand experience of independent living but also exposed me to the nuances of financial management. These initial steps helped me understand budgeting and the importance of balancing expenditures with earnings.
Then transitioning into renting my own place, I was armed with the knowledge I gained and was better prepared to face the challenges, creating a smooth transition to living completely on my own.
Checklist before getting your own place
Before making the big move, have you:
Saved enough to cover deposit, rent, moving, and utility hook-up fees?
Started a personal budget, tracking income and expenses?
Drafted a rough spending plan using the 50/30/20 budget rule.
Built an emergency fund?
Discussed potential apartment rental fees and deposits?
Considered recurring expenses and variable expenses?
Weighed the pros and cons of having a roommate.
Looked into second-hand furniture?
Can you comfortably cover living expenses with your income?
Have you accounted for all possible costs? Think of moving costs, utilities, groceries, health insurance, and more.
Have you considered the cost of living in your preferred location?
How stable is your income? Can it sustain your independence long-term?
Check out this first apartment checklist.
Frequently Asked Questions (FAQs)
Before moving out of your parents’ house, aim to save at least $5,000. But, you want to start off financially sound, so aim higher like $10,000. This amount would ideally cover your moving costs, early rent payments, and the setting up of utilities.
Remember, the real magic figure depends on your cost of living and your current income.
Put simply, saving $1,000 a month is excellent!
As an expert, Money Bliss often recommends saving at least 20% of your income each month. If you can stash away $1,000, you’re well above this bar.
Remember, every little helps when working towards financial independence. Check out our 52 week money saving challenge to get started.
Start Saving for How Much Money I Need to Move Out
Taking the leap into independent living can feel daunting. But with careful planning, budgeting, and saving, it’s an exhilarating journey.
The best advice I can give someone who is looking to move out is to plan ahead for the journey in front of you.
Remember, having anything between $6000 and $10,000 saved up is an excellent starting point.
As you navigate your financial freedom, adopt the 50/30/20 rule for managing expenses. Around here we call it the Cents Plan Formula.
Most importantly, stay prepared for life’s unexpected twists with an emergency fund. And don’t be shy to make some smart moves like considering a roommate or opting for second-hand furniture.
The journey towards independence is rewarding and fun – as long as you’re financially prepared. So pop that calculator, get budgeting, and start saving for your own place!
Source
Moving.com. “Moving Cost Calculator for Moving Estimates.” https://www.moving.com/movers/moving-cost-calculator.asp. Accessed October 25, 2023.
Rent Cafe. “Average Rent in the U.S.” https://www.rentcafe.com/average-rent-market-trends/us/. Accessed October 25, 2023.
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Did the post resonate with you?
More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
And why isn’t the amount the same at every community?
There are a few variables that determine that number.
What is the average security deposit for an apartment?
On average, the security deposit is equal to one month’s rent. So, you want to keep this number in mind when calculating how much money you’ll need to give your landlord at move-in. Many landlords require the security deposit and first month’s rent (and sometimes last month’s rent too) before they’ll give you keys.
Landlords set security deposits to protect them from damage and non-payment. Security deposits are set based on four important factors: State law, cost of monthly rent, included amenities (elevator, W/D in unit, private parking, furnished vs. unfurnished, doorman on site, new renovations) and market competition. When anticipating how much a security deposit might be, consider those factors when making an estimate. State law may limit how much a landlord can set a security deposit for, so it is always a good idea to check into your local legislation if you feel the security deposit set was too high.
Coming up with this amount of money may seem overwhelming. But, remember that if you’re in an apartment now, and you haven’t damaged it, you might a security deposit coming back to you. You should receive it within 30 days after you move out. (If you’ve earned its return, but you don’t receive it within 30 days, contact the office).
Where can I find the security deposit amount for a unit?
The amount owed for security deposit should be on the application, and must be on the lease. Before deciding on an apartment, make sure you have the dollar amount of the security deposit in writing.
See also: What you could need for the application process
How much can a landlord charge for a security deposit?
That’s up to the landlord. The average is one month’s rent, but some will charge up to three month’s rent. Most states have a limit to what can be charged, but there are some states that have no maximum.
If everyone else in the area is charging one month’s rent for security deposit, the landlord may want to do the same, to lease the unit. If you’ve seen evidence of that, take it with you in order to negotiate.
Why would a landlord charge more than one month rent for the security deposit?
Some property management companies have a policy that the deposit is 1.5 or two times the monthly rent. However, another reason your deposit may be quoted as higher is due to your less-than-perfect credit history. The landlord may want to rent to you but must offset the risk by charging you a higher security deposit.
Can my security deposit be used as rent?
Your security deposit is not meant to be used to pay your last month’s rent. When the time comes for you to move, you cannot ask your landlord to use your deposit to cover full or prorated rent. However, if you paid first and last month’s rent in lieu of – or in addition to – a security deposit, then you have, in fact, already paid for your last month, and shouldn’t be required to pay for your final month at the time, since you already did so up front.
Pet deposits
If your landlord allows your pet to move in, there will be an additional pet deposit due before the landlord gives you the keys. If your dog or cat is a service or therapy animal, the pet deposit should be waived with a doctor’s note. Bear in mind, you are still financially responsible for any damage your service or therapy animal does to the apartment.
Pet deposits are either refundable or non-refundable. If your landlord doesn’t charge a pet deposit, it may be because they charge monthly pet rent. This can be anywhere from $10 – $30 depending on the type of property and location. Some landlords will charge pet rent in addition to a security deposit, so make sure you ask about the pet charges up front.
When is the security deposit less than one month’s rent?
Some low-income tax credit properties have lower security deposits for those with good credit. In a market-rate complex, a lower security deposit might be offered to incentivize more people to move in.
Paying the security deposit and the first (and sometimes last) month’s rent can be tough, but it’s part of moving. Just remember, you do get your deposit back if you leave your unit in good condition when you move out. It’s part of the business. Once you get that part out of way you can focus on making your new apartment feel like home.
How do I get my security deposit back?
Getting a security deposit back can be difficult when dealing with some leasing companies. Here’s the best way to ensure you will get most – or all – of your security deposit back:
Take pictures and make notes during initial walk-through. Make sure you agree to everything that is listed on the walk-through sheet before you sign it.
Repair any and all damage that is your responsibility before you move out.
Read your lease carefully and make sure to follow all of the stipulations for moving out. This may include having carpets professionally cleaned and providing a receipt upon your move-out. Make sure you don’t miss these little, and often hidden, stipulations. It could end up costing you a lot more money in the end, as landlords often up-charge for these services if they have to do it themselves.
Follow your move-out process to a tee, including writing and delivering a proper Notice of Intent to Vacate.
Replace any broken blinds yourself.
Before filling any nail holes, make sure that your landlord intends to repaint after you leave. Landlords are supposed to do this, but some don’t. Those filled nail holes could cost you in the end.
Take pictures and document everything you do. Keep receipts to prove that you left your old place in tip-top shape, minus regular wear and tear.
Bekah Steenbock is a freelance writer with a background in real estate and business growth. She is a native Austinite, but has called Seattle, Mankato,
Milwaukee, Las Vegas and Atlanta home. Bekah, her husband and their three children love exploring the outdoors in their spare time.
Before putting your stuff into storage and begging for a guest bed or couch from a friend, choose the vastly easier option and send your landlord a lease extension letter. There’s no guarantee that you’ll get one, but your landlord may agree to extend your lease end date if they haven’t rented your apartment to someone else yet.
What is a lease extension?
A lot of rental concepts are pretty complicated, but fortunately, this isn’t one of them. A lease extension is exactly what it sounds like — an extension on the length of time you’re allowed to stay in your rental. This can range from a few days to a few months, depending on what you work out with your landlord. You can expect to pay a prorated amount on your monthly rental rate for the additional time you occupy the space.
Asking for an extension
If you have a good relationship with your current landlord and you’ve been a model tenant, your chances are probably pretty good for getting an extension. It also helps if there isn’t a new tenant waiting to get into your apartment. It doesn’t benefit the landlord if the place sits empty, so you may get a lease extension so he or she isn’t out as much money.
The important thing to know when asking is to be professional and reasonable in your lease extension letter. If the landlord agrees to the extension, he or she is doing you a favor, so be polite, courteous and willing to negotiate.
Put it in writing
A lease is a legal document, so a lease extension letter request should be treated with the same level of importance. To request a lease extension, submit a formal letter containing all the pertinent details your landlord needs to make a decision. The letter should include:
Your name, current address and contact information
Date the lease extension request is submitted
Length of the lease extension, including the proposed end date
Reasons for extension
Date by which you need a decision, usually 10 days to two weeks
Putting your request in writing also keeps a record should any issues arise during the extension period.
Timing is everything
If possible, submit your lease extension letter 30-60 days before your lease end date. This gives your landlord enough notice so that when they find the next tenant, they can set their move-in date for when you’ve already left.
Give your landlord something in return
Be proactive in letting your landlord know that you’re willing and expecting to pay for this extended time. Calculate the daily rate of rent you pay based on a 30-day cycle, then offer a prorated rent based on the total days of your extension. So, if your monthly rent is $1,000 and you need to stay an extra week, the rent for the extension period would be $250.
This is a great place to start, and certainly a reasonable offer, but don’t be surprised if your landlord hikes up the cost of occupying the apartment during the extension — it’s a pretty common practice. Think of it as a convenience charge. The alternative to paying a little more is not having a place to stay, moving your things multiple times and wasting money on temporary storage space, so it’s worth it for just a short period.
Sample lease extension letter
Not sure what to say in a lease extension letter? Check out our downloadable example!
[Your Name] [Address] [City, State Zip Code]
[Date]
[Landlord’s Name] [Landlord’s Address] [City, State, Zip Code]
Lease Extension Request for [Rental Address]
Dear [Landlord’s Name],
Please accept this letter as a formal request for an extension to the lease for [Property Address]. Currently, the lease is set to expire on [date]. I would like to amend that date to end on [new date]. I propose to pay you the prorated amount of [extension rent amount] for the additional days that I will occupy the property.
I am asking for this extension because [insert reason here, for example: I am moving out of state, I am getting married, etc.] Your flexibility with my lease end date will make this transition time much more seamless.
I appreciate your careful consideration of this matter. Please respond to this letter with an answer in writing within two weeks [by date]. Feel free to contact me with any questions or to discuss this matter.
Sincerely,
[Tenant Signature] [Tenant’s Name] [Tenant’s Unit Number]
Prepare in advance
To avoid the potentially awkward situation of asking for a lease extension toward the end of your time in the apartment, consider adding a clause to your lease when you sign it that addresses this situation.
Often, the addition of this clause will include the length of time you can extend, a deadline to ask for the extension, as well as any change in rent that may occur. If it’s in the lease to begin with, the landlord is obligated to honor your request.
Regardless of how you word it in your lease, it’s important to read through the entire document carefully to ensure you’re protected as the tenant during the term of occupancy.
Nothing to lose, everything to gain
There’s no guarantee that your move-out date from your current place and your move-in date for your new apartment will be the same. Working with your landlord to negotiate a lease extension is one of the best options to keep your stress levels in check during your move, so don’t be afraid to ask. The worst thing your landlord will say is no!
A freelance writer based out of the Atlanta area, Alia has penned articles during her decade+ career for such sites as HowStuffWorks, TLC, Animal Planet, Zillow and many more. Her favorite things to write about include fitness, nutrition, travel, healthcare and general lifestyle topics. A graduate of the University of Georgia, Alia’s an avid Dawg, but she also loves reading, sewing, eating all things chocolate and playing sports with her husband, three boys and beloved border collie, Flash.