How to Save Money on Your Rent When Signing a Lease
Tips to Help You Reduce the Cost of Your Next Apartment
Renting an apartment gives you the flexibility to move each year to get better rent prices that work for your budget. It also gives you a place to call home until you can save up enough for a down payment on a house (if that’s your goal). This flexibility could come at a price, though.
According to Apartment Guide’s 2020 Mid-Year Rent Report, the average monthly rent for a one-bedroom apartment is $1,621. This figure increases to $1,878 if you opt for a second bedroom, and can be much higher in some rental markets. Plus, it does not account for utilities or other expenses you may be responsible for when renting.
However, there are ways to save money on your rent when signing a lease. Here are some ideas to consider before you commit.
Choose an Affordable Location
Do you need a posh pad downtown, or will a cozy rental in the suburbs work?
“You will generally get more bang for your buck when living in the outskirts,” Florida real estate agent Michael Cox told The Balance via phone.
Renting in a prime and safe location will cost you more, and you may have to pay for parking if spaces are not available for the rental unit. However, moving to the suburbs may double your commute and increase your fuel costs if public transportation is not an option.
For example, the average rent for a one-bedroom apartment in New York City could cost $2,476.63. That same type of apartment could cost less in Jersey City, New Jersey, though your commute just might be a little longer. And if you work remotely, consider the most affordable states to rent since you can do your job from just about anywhere. The cheapest states to rent a one-bedroom apartment include Alaska and Wyoming.
Weigh the benefits and costs of choosing a particular location before you make the decision that is best for your budget.
Negotiate Your Rent
The advertised rental rate may not be set in stone. Ask for a discount if you are considering an apartment complex with empty units or a townhome that has been vacant for a while. Landlords often want apartments occupied at all times, so they could cut you a deal on the rent.
“It never hurts to ask for a reduced rate,” Cox said. “You never really know what the landlord is willing to accept until you ask.”
You can also use the nearby competition and the building’s downfalls as leverage for negotiating. If a landlord thinks you might end up going with a different apartment that has slightly lower rent, they may match it or give you a better price.
No luck negotiating the rent? Ask the landlord if they will waive your application fee or deposit. It is not uncommon for apartment companies managed by rental companies to advertise move-in specials or discounted rental rates.
Rent From an Individual or a Small Rental Company
Many large apartment complexes and rental companies offer amenities, such as pools, gyms, or storage areas, to their residents. However, these perks may come at a cost and increase the monthly rent.
You can skip the amenities and save money by renting with a private landlord—an individual who rents out their property. According to Cox, a private landlord may also be a better fit if you have credit challenges and are worried about getting approved.
Explore local listings online and in the newspaper or ask around to find these rental opportunities.
Weigh Your Needs vs. Wants
Are you willing to give up the one-bedroom apartment for a studio? Will you avoid parking fees if you choose to live in the suburbs instead of downtown? Is there a premium on rental units that are near a public transportation hub?
These are just a few questions to ponder as you weigh your needs and wants. Decide which items are essential and those you can part with to cut costs.
If you are only planning to rent for a short period, you may want to pare down your wish list to the bare necessities.
“Find a property that is comfortable, safe, and meets your basic needs to save money until you move into your dream apartment or buy a home,” Florida real estate agent Jennifer Joseph Green told The Balance via phone.
Consider Living With Roommates
Find a roommate or two, move into a larger unit, and split the rent to curb costs. If you are willing to make this sacrifice, connect with your potential roommates to make sure everyone is on the same page about the arrangement and expenses. It’s also ideal to come up with a list of house rules that work for everyone who will occupy the space.
“Ask the landlord or apartment complex about separate leases,” Green said. “This will prevent you from being penalized and charged steep fees if your roommate breaks the lease.”
Sign a Longer Lease
Some rental companies and private landlords reward long-term tenants with a discounted rental rate. If you are comfortable with the property and it meets all your needs, consider signing an extended lease to save money each month on rental costs until you buy your first home.
While it may seem like a long time, consider a 24-month lease to potentially lower your rent payment and keep it from increasing for a full two years.
The Bottom Line
Before you commit to an apartment, spend some time researching your options and finding ways to keep more money in your pocket. Be mindful of the location and try negotiating the rental rate with the property manager or landlord. You can also rent with a private landlord, consider living with roommates, or sign an extended lease to curb costs.
The money you save on rent can be put toward your emergency fund, credit card debt, or student loans. You can also use the funds to increase contributions to your 401(k) or individual retirement account (IRA) and boost your nest egg.
Apartment Guide. "2020 Mid-Year Rent Report." Accessed Aug. 18, 2020.