Renting in itself is a great solution against spending a lot of money on a mortgage, but there are also many ways in which you end up losing money while renting. However, there are plenty of tips and tricks to use if you want to reduce your costs, so if you come up with a plan and stick with it, you’re most likely going to save up some pretty cash.
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A very important thing to focus on is the rent burden and how to avoid it. According to the Department of Housing and Urban Development, a household becomes rent-burdened when more than 30% of the income is spent on rent. Depending on where you live and how much you make, you can figure out how many square feet you can actually afford to rent. If you manage to keep your rent under 30% of your salary, you’ve already taken an important step in minimizing your costs. But how could you reduce even further?
Proper and thorough research is essential; if you don’t take the time to look around and compare prices, sizes, and benefits, you might end up spending too much on something that is not even suited for your lifestyle. Use apartment search websites and customize your search with filters, both for prices and space, but also for specific amenities.
A great way to cut down on living costs is to get a roommate so you can split the rent and utilities. If you can’t find someone among your acquaintances, there are plenty of reliable apps for you to find a roommate.
When you want to save money, there are some uncomfortable, but necessary compromises to make. Prioritize needs over wants. There will be a lot of things that catch your eye and would be nice to have, but think about what’s necessary and say ‘no’ to costly options that are not useful to you in the long run. You will find many apartments with different amenities and features, but first of all you should decide on what you can afford and set up a price range.
Then, a very important aspect of renting is location. How much you are willing to compromise here should be decided ahead of time. Do you have the option of renting somewhere further away from your prime location and walk or use public transport to cover the distance? Does your lifestyle require little commute and does living closer to your work pay off more than you would spend on the location prime? These are all aspects to be decided on a case by case basis.
Another large spending area is furniture. If you don’t have any and consider buying furniture for your rental apartment, think critically about how often and how far you are going to move in the near future. Furniture is an investment for middle to long term, so if you’re not sure about your power to commit to it (and to moving it around), think about the benefits of renting a furnished apartment and see if they fit you.
You’ve found the perfect apartment and now it’s time to sign the lease. Always read the contract very carefully and ask questions about anything that is unclear. Both you and your landlord need to understand your obligations. Before you sign anything, take a tour of the apartment with your landlord and assess the situation. If there are flaws to the apartment, make a list and use them to convince your landlord to lower the rent. If there are issues which can be fixed, convince your landlord to reduce the rent by offering to fix them yourself. Of course, make sure that’s manageable ahead of time.
This part is about your behavior once you’ve signed the lease. If you want to save money, the best way to do it is to cut various costs you don’t notice throughout the month. Little changes in your daily behavior—like plugging out electronics when you leave the house or investing in smart tech to reduce your energy and water consumption—could stack up and result in a significant decrease on your bill.
Another trap one can easily fall into is eating out or ordering food on a daily basis. As much of a temptation as it is, eating out is only a costly, temporary pleasure. If you’re renting in a busy city, it’s likely that you’ll end up running from one place to another quite often, so invest some time in cooking as this will definitely prove to be both time- and cost-efficient.
About the author: Mihaela is a passionate reader and writer, with an affinity for language and linguistics, as well as the latest technological developments. She discovered her passion for real estate at RENTCafé, and you can read more of her articles on their blog.