How to Avoid Paying High Rent
Summer is peak season for relocating because of the nice weather and the fact that people tend to have more free time on their hands. Many people looking to move might not be ready to buy a home, and instead need a place to rent.
If you're already a renter, you know it can be a challenge to find an apartment you can afford that also suits your needs. The price of an apartment can depend on location, amenities, demand and many other factors.
To avoid paying too much upfront, as well as getting stuck in a lease you really can't afford, consider the following before signing on the dotted line:
Figure out what you need versus what you want.
Before you even start to look at apartments and get distracted by granite countertops and hardwood floors, make two lists: first, a list of what you feel you need in a living space. For instance, if you have a cat or dog, then you need an apartment that accepts animals, or if you commute to work, then you need to be within walking distance to public transportation. You should also make note of how much square footage you feel you will need to live comfortably.
The second list should be what you want in an apartment. This is where nice but unnecessary amenities come in, such as laundry services, a nice view or a dishwasher. When you are looking at prospective apartments, check off what appears on this list to see just how desirable a location might be.
It's up to you what goes onto these two lists, but remember the more amenities you require, the higher the price.
Be prepared to spend money upfront.
Next, make sure you have enough funds available for the initial costs necessary in signing a lease for an apartment. Most apartments will require a security deposit, first and last month's rent and various application fees.
If you think it is likely you will use a broker to find an apartment, take a broker's fee into consideration as well. This can be as much as the amount of one month's rent or 15 percent of the total cost, and is typical in cities or major metro areas. Do some background research into both rental brokers and management companies before working with either type.
Aside from these costs, there are other expenses that come up when you move into a new place. Renter's insurance is a smart investment to protect yourself from any damage out of your control, so look into average costs in your living area and factor that into what you will pay. You'll also need to spend a bit on groceries and household items to get your apartment up and running.
Research your area's average rent prices.
Before you even look at your own finances to see what you can afford, take a look at the area where you live and find out the most recent average rent prices. Know what to expect and how the cost of living varies in each neighborhood. This will be helpful to have on hand as you look at specific apartments.
Calculate your budget.
Finally, calculate your own budget to get an idea of what price range you can afford. The common rule of thumb is to bookmark 30 percent of your income for monthly rental costs. To leave yourself some breathing room and account for unexpected taxes, base this number off your take home pay. Then, divide this by 12 to find out what you should pay each month.
You might consider including an approximate amount for utilities and renter's insurance into your overall rental cost each month as well. Ask prospective landlords for average costs from previous tenants to help with your calculations.
This is also a good time to consider your other expenses. The 30 percent rule is only a starting place; if you have a lot of other monthly payments to make, you should adjust accordingly.
As you plan out your budget, make sure you leave enough to allow for saving and putting money into an emergency fund -- and of course, some money left over each month so you can enjoy yourself and have fun.
Consider a roommate.
If you weren't pleasantly surprised at the amount left in your budget, there is one very smart economical decision you can make when searching for an apartment, and that's to get a roommate (or two). This can solve a lot of financial problems by splitting the cost of rent, utilities and insurance, especially when you are starting out in your career.
Jon Lal is the founder and CEO of coupons and cash back website BeFrugal.com, which saves shoppers an average of $27 per order thanks to coupons plus an average of 7 percent cash back at more than 4,000 stores.
More From US News & World Report
