Rent is many people’s biggest expense and biggest opportunity to save money. If you are able to lower this expense by a significant amount you will be able to pay off your debt fast and ultimately have more money to invest. When it comes to investing this is very important because over time each dollar that you save now is worth more in the future. Each $1 saved today invested at a compounded interest rate of 7% a year is worth $7.61 in 30 years. So just by saving a simple $300 per month on rent per month ($3600 per year) invested at 7% per year compounded annually could be an extra $24,404 in your bank account 30 years from now. Figure out how much you can save by using this compound interest calculator. Now hopefully I have caught your attention.
With more than one-third of Americans renting their residences, and with some spending half of their salaries on rent, finding ways to save money in this area is a hot topic. As my income has gone up over the years I have always made sure to keep my rent the same per month. This has required many of the tactics that I will talk about in this post. For a lot of people the more money they make they start to upgrade their lifestyle in the same way. Move to a more expensive apartment, buy a more expensive car, eat at more expensive restaurants and buy more expensive clothes you get where I’m going with this. I choose to do the opposite and actually have fun doing it. If you are not able to live with mom and dad until you have paid off all your student loans & debt I highly recommend the following on how to save on rent.
How to Save on Rent
1. Get a roommate
This one is pretty obvious, and it will save by far the most money. The average cost of a one-bedroom apartment in 2017 is $1,166. The average cost of a two-bedroom apartment in 2017 is $1,332. Divide that second number by two and it’s $500 cheaper per month and $6,000 cheaper per year to share costs with a roommate than live alone. And that doesn’t include shared expenses like utilities, kitchen supplies, toiletries and groceries.
2. Negotiate when you re-sign a lease
Landlords want to keep good tenants. It costs them money to move you out and bring someone else in. That means you have a little bit of leverage. Research similar apartments in your area and come in with a number in mind. If the landlord won’t budge, tell them you’re going to look elsewhere. If you’ve been a good tenant, they’ll want to keep you. Word of caution: Know who you are dealing with. Independent landlords have a lot more wiggle room than a property management companies. Maybe they have multiple renters in the complex and aren’t willing to make concessions, so try to sweeten the deal by offering something in return. Oftentimes if you are willing to sign a longer lease, your landlord may be willing to reduce your monthly rent. If he or she doesn’t seem receptive to lowering your monthly rent, try getting him or her to include utilities or parking in your rent.
3. Look for apartments in the winter months
This of course will not apply to everyone but landlords have a tough time finding renters in winter. It’s cold outside and people aren’t willing to leave their cozy homes. Vacancies can go on for months, and with each month landlords are losing money and getting more desperate. Prices get expensive in the summer months. Some of that has to do with the weather, and a lot of it has to do with the school schedule. College graduates flood the market during this time of year, and high school graduates enter the market in college towns. Families with children in elementary school will wait until the school year is over to make a move to ease their children’s transition to a new school. All that makes for an increase in demand which equals higher prices in the summer. Look for apartments in the winter, and offer to sign an extended lease that ends in the summer. That ensures the apartment hits the market at a good time for the landlord when you move out, and the landlord gets some stability in the meantime. They’ll be willing to work with you for those tradeoffs.
4. Take on Some of the Maintenance
When renting, things in the home are just as likely to break or need replacing as if you were to own your home. The difference is these responsibilities lie with the homeowner, not with the renter.
Are you able to maintain the home yourself and pay for basic upkeep, such as changing the light bulbs, changing the AC filter, or replacing a broken screen? If so, consider asking for a discount on rent in return for you maintaining the home
5. Don’t Be Picky About Location
When you buy a home, location is everything and people are willing to spend more money to be closer to their job, their children’s school, or entertainment in the city. Unless you plan on renting for five years or more, consider sacrificing location now so you can save more money to purchase a house in your desired location. Living “in the city” can cost significantly more than living in the suburbs. The extra money you save on rent can be used to put towards paying off debt, investing or towards a down payment on a house.
Note: Before signing a lease in the suburbs, make sure to factor in the cost of gas (and your time) when commuting to and from work. The savings may not be worth it if your commute triples in length.
6. Buy used furniture
Another easy way to save money when you’re renting is by purchasing used furniture and keeping your home décor simple. The layout of the home you’re renting will probably be different than when you purchase a home, so keep the your décor simple and cheap for an additional way to save money. Take advantage of sites such as Freecycle or Craigslist to find free or cheap furniture. Also, reach out to family and friends who may be trying to get rid of their unwanted furniture. There is no reason to buy new furniture for your place when you can save money by taking advantage of other people’s unwanted couches, chairs, tables, or whatever else you may need.
7. Take Advantage of Apartment Facilities
This is one of my favorites because I use my apartment gym and it save me the hassle and money of having to pay for one. Does your apartment have a gym onsite? If so, cancel your monthly gym membership! There is no need to spend money on outside facilities when you can use onsite facilities included in your rent.
If you’re willing to make compromises on the less important things and you’re willing to invest the time to read lots of ads and look at numerous places, you’re likely to find the perfect apartment for you at the perfect price. The extra time and effort spent finding the right place will pale in comparison to the amount of time you can spend regretting rambunctious neighbors, a shoddy unit that’s always needing repairs or a huge rent check that forces you to sacrifice other goals like taking a vacation, paying off debt or saving for a down payment on a house.