It is common knowledge that real estate is one of the best investment platforms one can venture into. However, a fallout of this is the fact that rental rates are skyrocketing. The rental price for an apartment complex has moved gradually upwards over the years so that the average earner finds it difficult to pay their rates without running into credit card debt.
To cure this disadvantage that disproportionately affects the poor, there has to be top to bottom re-evaluation of the real estate systems in most countries. However, that could take a while to happen. If you are renting an apartment, waiting for the institutional changes might not be in your best interest. The path to financial freedom requires you to take active steps to cut down on how much you pay for rent. It might be as simple as saving a few dollars. You might even get lucky and save yourself a few hundred dollars in the process.
This article looks at the strategies you can implement to ensure your rent payment isn’t excessive. The ideas here are commonsensical, practical, and gives you a lot more wiggle room to save money while also accessing comfortable housing in the process. Of course, it is perfectly fine if you have already paid your rent. You can implement these strategies for the next apartment that you get into or your next payment cycle.
So, ready to learn how to save money on rent? Let’s jump in!
Financial Tips To Pay Attention To When Moving
Before we dive into ways to save money on rent, here are some money-saving tips you may want to take note of. They will come in handy before you start paying your monthly rent. However, beyond that, you will be financially prudent when you stick to them.
Choose Location Wisely
Location is everything. It is the primary consideration you should have when renting an apartment. Being intentional about the location of your apartment can be a way to save money. For instance, buildings close to a city center are often quite expensive. You will most likely get a better deal if you consider options that are a few miles out.
However, if you intend not to take public transportation to work, then your house should be within walking distance. Eventually, the decision should come down to housing options that help you save on rent without costing you so much in transportation. None should weigh heavily over the other. Your ideal living space should be one where the two considerations are evenly matched. Before you make a down payment, ensure you have the question of location sorted out.
Understand Your Security Deposit
Security deposit is the sum of money tenants are required to give to their landlords before renting an apartment complex. It is a lump sum that serves as a security for the landlord. Hence, if the tenant damages the property or breaks the agreement before the arranged date, the landlord can recoup some of their losses with the money.
You need to understand how the security deposit works in the place you are getting an apartment. Ideally, it should be refundable. Thus, when your rent expires, your landlord should hand over the sum to you. However, some homeowners try to play a fast one on their tenants and refuse to part with the security deposits. Sort this out before signing any deal. Students getting apartments in college towns can get their school authorities involved at this stage.
Furthermore, you must understand that the money is usually refundable if the property is in pristine conditions when you are leaving. Thus, when you get into the apartment, take pictures of the repairs needed in the apartment. Inform the manager about them and have them sign a waiver. This is to prevent disputes later on and help you easily recover your security deposit.
Finally, the security deposit makes it appear as though you’ll be paying more money than you ordinarily would when renting a space. Thus, it is a great idea to start saving for it on time. Factor it into the cost of what you will eventually be paying for.
Sort Out Utility Payments
Utility costs can significantly add to what you eventually get to pay when moving into a new home. Thus, always be on the lookout for that when considering housing options. Different landlords have the utilities they allow tenants and what they take on themselves. For instance, when you get into some apartments, you do not have to pay water bills; the landlord takes care of that. However, that is not applicable in all cases. So, you have to make sure you and your prospective landlord are on the same page regarding your utility bills. Note that you will most likely have to pay a higher rent for apartments where the landlord settles a huge part of the utility bills.
Beyond that, it is also important to make sure that you can pay the bills and pay them when they come up. This is because most service providers charge late fees for the late payment of bills. If the bills are more than you can reasonably afford, you may want to pass on the building. You can also consider ways to save on utilities like internet and tv as well for more savings.
Steps To Saving Money When You Pay Rent
Apartment hunting can be a tedious enterprise. It doesn’t help that rental prices seem to be on a steady rise, with everyone benefiting except the low-income or high-income earner. Here are some of the things to do to save money on rent
Get a One Bedroom Apartment
If you are single or are a student, you should be looking to get a one-bedroom apartment. This is because you would hardly have any need for a big space.
However, if you would rather, you can get a two-bedroom apartment. That could significantly cost more. To mitigate the cost of that, you could get a roommate to share the new apartment with you. As a new tenant, you would have a couple of bills to sort out at the beginning of your tenancy. This ranges from the down payment to the utility bills and even the security deposit. It helps to have someone who can split these bills with you.
Admittedly, it can be difficult finding the ideal roommate. Here, you should put in the same effort you put into market research to find the right partner. Some sites help you find roommates who share your interests. You’ll have to input your personal data as well as the data of your preferred roommate. The site will then match you with a compatible partner. Alternatively, you can employ the help of family and friends. In the vast majority of cases, sharing boardings with someone you already know is a terrific hit.
Sign a Long Term Lease
Most landlords need stability. They want a good tenant that can assure them of a steady flow of income over a particular period. You can take advantage of this. A longer lease usually comes with the bonus of discounted rent. This way, you can put away enough savings into your emergency fund to take care of unforeseen circumstances that could arise in the future. You may even have enough to buy your dream home. Hence, while considering new apartments, ask your landlord if you can get discounts if you pay for a longer period. In any case, how long you stay could depend on what you intend to do while in the apartment. For example, if your work requires that you get transferred often, it would hardly make sense to get an extended lease.
Sublet the Apartment
One of the ways to save money on rent, especially during the holidays or during the summer, is by subletting. If you will be traveling for a long period, you may want to sublet your apartment instead of leaving it empty.
There are several benefits of taking this path. The first is that it saves you money. You will be collecting rent from the sublessee, money that will come in handy in many situations. It will also reduce the monthly expenses you have to deal with each month. The sublessee will be in charge of paying for any monthly bill for as long as they stay in your house. Finally, it is one way to preserve your properties. With someone in your living space, your properties are better secured.
However, you will need to confirm that you can sublease your apartment before going ahead to do so. This is because some tenancy agreements forbid subleasing. Hence, going against this can put you in legal trouble.
Forget About Furniture
Apartments that come with furniture seem like a good bargain till you consider them closely. Leasing an apartment with furniture, especially expensive furniture, can be a fantastic way to waste money. If you are looking to save on your rent, then you have no business paying more than necessary for furniture. Furthermore, homes without furniture allow you have more space. You can then fill up the apartment with the things that you need and that you can afford. In fact, you may not even like the properties in the house. Thus, it could be a bad bargain still. Furnishing the space yourself also allows you to decide how much space you want to keep for yourself. Most agreements do not let you leave the apartment with the furniture when the lease expires. Additionally, if an accident happens, you could be required to pay for the furniture.
Consider Getting Insurance
In addition, you may want to consider getting a renters insurance policy coverage. The coverage usually includes the personal effects you have on the rented property. Hence, if a fire or accident happens in the building and your apartment is deemed uninhabitable, the insurance company covers it and pays you back. Furthermore, the coverage typically covers situations where a person gets injured in your apartment and sues you. Getting insurance coverage is a smart personal finance decision to take. However, beyond that, renters insurance is a great way to save money on rent.
Always Insert a Break Clause
A lease agreement is an enforceable contract that binds you and the landlord. This means that you cannot unilaterally decide to end the contract. If you do, you will forfeit the rest of the rent, the security deposit and can even be sued by the landlord. To forestall this challenge, you can ask the landlord to insert a break clause in the entire lease agreement.
A break clause gives either party to the contract (i.e., you or the landlord) the right to end the contract before the expiry date. Usually, you will have to give one month’s notice or so to the landlord. However, you will not have to suffer any penalties that usually arise if you break the contract early.
Do understand that it is up to the landlord to either agree or refuse the arrangement. Thus, you may want to take the arrangement to the landlord before you sign the agreement. Likewise, if you are using real estate agents, you will need to make sure they take the proposition to the landlord too.
Conclusion: Saving Money on Rent
Even with how competitive and cutthroat the real estate scene has become, you can still break even. This discussion has been about ways you can save money while looking to rent an apartment. First, you must understand that saving money on rent keeps you out of debt, which helps your credit score. You will find this indispensable if you eventually need to obtain loans for your businesses.
Finally, the suggestions here work the best for good tenants. Private landlords, especially, prefer not to have rowdy or difficult tenants. Thus, before you sign a lease, commit to being the model tenant. This will save you so much more than money in the future.