Getting an apartment is usually a costly affair. This does not only depend on the luxury levels of the apartment you plan to rent but also on a lot of other factors. Since paying rent is a recurrent expense, it is something you can plan for and get ahead of, thus keeping your finances in check.
If a large percentage of your income is channeled to your rent, you are likely to come into some financial trouble both soon and in the long run.
Keep reading to find out some of the reasons why living in an apartment can be considered expensive together with a couple of ways that you can cut these costs.
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Expenses that come with living in an apartment
Here are some of the bills you will need to pay if you decide that apartment life is for you:
Once you settle on an apartment that you like, there are a few costs you have to pay before you move in:
- Security deposit. This is the amount you pay your building manager to protect the unit. If your lease ends and you decide to move out, the landlord will perform an inspection of the unit and if there are any damages or changes made that violated the lease agreement, the deposit will be used to cover the cost of repairs. If you leave the unit in good condition then this amount is refunded to you. If a tenant fails to pay their rent, this amount can be used to pay for it. The security deposit is usually around one and a half times the amount you pay for rent. In some buildings, you have the option of paying a non-refundable security deposit which will be lower than a refundable one. However, if your unit has some damages whose repairs cost more than your deposit, you might have to cover them out of pocket.
- First and last months’ rent. In most apartments, your lease will require you to pay the rent of the first month and the month that your lease expires. If you choose to renew your lease after the said period, the last month’s rent is carried forward to the last month of your new agreement. If there is an increase in the rent amount, you will have to top up the rent in the last month of your lease. For example, if at the time of the agreement the rent was $1,500 and it increases to $1,700, you will owe $200 in the last month.
For most people living in rented units, this amount takes up the largest portion of their income. Here are some of the factors that influence how much the rent in your building is going to cost:
1. Location of the unit
Apartments that are located near schools, recreation centers, and transport means will cost more than those found in the outskirts of towns.
Identify the area that you want to move to and note down rent prices around there. If there are plenty of vacant apartments, you are likely to get a house at a more affordable rate. Also, if the area you like is too expensive for you, consider looking at houses that are close to where you want.
2. Size of the apartment
A two-bedroom unit will cost more than a one-bedroom unit in the same market. Also, if the house has added amenities like bathrooms and a balcony, you can be sure that it will cost more.
An apartment in good condition has more demand and will cost more than one that has not been well maintained.
The average cost of renting apartments has increased over the years, and here are a couple of reasons why housing is becoming more inaccessible:
- The population is growing. Many people are looking for opportunities and moving to cities and urban areas. Most of these people are looking for individual units so the demand is higher.
- There is no space. In major cities and growing business areas, the land is in high demand and this makes it worth more. For the owners and developers, this means they invest more into putting up an apartment building. To meet building costs and make a profit, they put as many units as they can into one building and charge an arm and a leg.
For many people, rent takes up up to 50% of their rent and this might affect your future and present plans. If your rent makes you unable to set aside an emergency fund in case of unexpected unemployment or a bad investment, it might be time to go back to the drawing board. Paying a lot in rent also makes it harder to save up to become a homeowner in the future. Take a look at some of the things you can do to spend less on rent:
4. Storage fees
Sometimes, the apartment that you can afford is too small and cannot fit all of your belongings, furniture, and appliances. This might need you to get a storage unit. These usually also require some fees, which can be monthly. This, in addition to rent, will take a chunk out of your paycheck.
5. Renter’s insurance
Aside from rent, you will be required to pay for insurance. If you move into a furnished apartment, this value corresponds to the worth of the items in the house. The whole building is already insured but this amount is necessary because, in case of any accidents, the policy covering the entire apartment will not protect your belongings.
This amount is usually cheap, at least compared to homeowner’s insurance. If you want to cut down this amount, you can combine this insurance with your car insurance.
6. Pet rent
Owning a pet in some apartments can attract extra costs in addition to the feeding, grooming, and veterinary expenses that your pet already comes with. Your landlord may ask that you pay a one-time pet deposit when moving into the unit or you may be required to pay a small amount every month.
This money accounts for any damages that the pet might cause to the unit and in some cases, it is financial compensation for any disturbances such as barking in the middle of the night.
Aside from paying your rent, there are other essentials that you will need to pay for. To keep yourself from running short of cash well before payday, you should budget your income to cater for these costs in addition to rent. Check your lease to see what costs are covered in the rent. Charges lie water, trash, and recycling are usually covered.
- Electricity. This is usually the highest and most essential bill. How expensive it is depends on the size of your house and how many roommates you have. If you live in a one-bedroom apartment and you have no heater and air conditioning, your electricity bill will rack up to around $50.
- Air conditioning. This bill is dependent on the area where you live, what season it is, and your preferences. If you are in the colder parts of the country, you might not even need this utility. Your usage will also depend on how large your apartment is and whether or not the house is efficiently containing the air.
- Internet and cable. Having an internet connection in your house has now become essential. An average user will need speeds of around 10 Mbps. This will cost anywhere between $30 and $60 monthly. Cable is an expense you can do without, especially if you don’t watch a lot of TV. Instead, you can opt for streaming services like Netflix which are more affordable.
Negotiate the rent
Once you have found an apartment, while discussing lease agreements, you can talk to your landlord about a discount. Sometimes you can get your rent reduced if you sign a longer lease. You can also come up with arrangements like if you always pay early, or bi-weekly, you get a reduction and if you delay, the deal is off.
Another option is to offer to pay in bulk in exchange for a reduced rate. If the building needs urgent renovations, this might sway the landlord in your favor.
1. Offer your services
If you have some maintenance skills, you can offer to get some of the load off your landlord’s hands in exchange for a reduction. Although it’s not glamorous, it might save you some coin.
2. Don’t pay the rent alone
If your rent is too high for you and your place has room for one more, consider getting a roommate. Ensure you agree with the landlord about the arrangement though. Also, get a roommate you can trust and if you’re living with someone new, ensure you get to know them well.
You could also outsource a room on Airbnb or the whole unit if you travel. If you choose this option, check your lease to see if it allows subletting and your local laws as well.
There are a lot of charges that come with living in an apartment. With proper planning and budgeting, you can manage all these expenses and stay on top of your finances.