You’re renting an apartment instead of buying a house to save on living expenses. Unlike home ownership, being a renter does not require you to pay for a humongous down payment for the property, or become a slave to your work as you struggle to pay the monthly mortgage.
If you’re a mere renter, all you have to do is put down a security deposit and come up with money for the monthly rent and utilities. You don’t even have to worry about maintenance costs because your landlord will take care of that for you.
But even if you are renting in order to save money, you still need to get a grip on your expenses. Despite the fact that being a homeowner is more expensive than being a renter, there are still the monthly bills and unexpected expenses that you should be financially prepared for. Let’s say that you have been living in the same apartment for a number of years now.
There’s suddenly a boom in construction in your area so your rent is likely to go up. In fact, according to the National Association of Realtors, the average apartment rates will rise by more than 4% for the year 2014 up to next year.
If you’re billed with a higher rent by your landlord and the expenses that you have increased due to inflation yet your salary remains the same – you will definitely find it more difficult to manage your budget. That is exactly what we will try to help you out with.
In our ultimate renter’s guide, we will be dishing out tips on how you can save money by being a renter.
Ways for Renters to Save Money
Take a look at the following ways on how renters can save money, not just on rent, but other expenses as well:
Try to negotiate your lease with the landlord
If it’s your first time to go apartment hunting and you already found a prospective place, take the time to negotiate the rates with your landlord. Usually, you will be given a better deal if you’re willing to sign a longer lease. If you’re not willing to tie yourself up to a longer contract, you can still negotiate by including utilities, parking or other perks that you would usually pay for separately as a renter.
Learn about the Terms and Conditions of your lease
Before affixing your signature on the contract, read the fine print first. Are the Terms and Conditions of the lease favorable to you as a renter? Are there any restrictions that you would like to learn more about? Are there additional fees indicated on the contract? What about the lease termination policies?
Or maybe there are community rules that you need to follow which is part of the neighborhood. Make sure that the landlord has answered all your questions about the Terms and Conditions of the lease before signing it so you won’t have any unpleasant surprises.
What about renter’s insurance?
As a tenant, you do not have to worry about expenses regarding the maintenance of the place because this will all be handled by your landlord. But there are other aspects of being a tenant that you should protect yourself against such as theft, vandalism, fire, storms or water damage.
This is where renter’s insurance proves to be handy. Although there are some rental agreements which already include payment for renter’s insurance – this only provides coverage for natural disasters.
If you’d like to take the extra precaution in protecting your personal belongings in case there’s a theft, vandalism, fire or similar incidents in your apartment, you can invest in renter’s insurance.
When buying renter’s insurance, consider raising your deductible. Pay as high a deductible as you can so that you can minimize the amount of monthly premiums that you will be required to pay.
Find out if your landlord will give you a rent reduction if you refer a new tenant
If you know that an apartment unit in your building is being vacated and you have a friend or an office colleague who wants to move, ask your landlord if you can be given an incentive for tenant referrals. This can come in the form of a rental rate reduction for the next month, or similar perks.
Go DIY when redecorating
When renting an apartment, you’d want to stamp your personality on the place. But just because you want to go all-out in personalization does not mean that you should spend an arm and a leg for it.
From painting to refurbishing furniture pieces bought from antique stores, there are plenty of do-it-yourself solutions that you can go for when redecorating your apartment so you won’t have to spend so much.
Save money on utilities
Even if utilities is already part of your rent, you still need to do your share in helping conserve water and electricity. To save on electricity, use a power strip so that you can turn everything off when you leave instead of putting them on standby mode. This adds 10 to 15% of your electrical consumption.
Conserve water by cutting your shower time in half, turning the tap off when brushing your teeth, etc. These are the water and electricity-saving measures that your mother would ask you to do when you were still living at home.
Monitor the ins and outs of your expenses
As a renter, you don’t know when financial emergencies will strike. You might fall ill and have to file for leave at work for a couple of weeks with no income. If you’re married, one of the kids might have a trip to the emergency room.
These will require extra money from you and if you don’t have a separate savings account for such emergencies, what will you use? By monitoring the ins and outs of your expenses, you can make sure that there is a certain percentage of your income which is set aside every month for saving.
Save money on food
If you’re living alone, it might be tempting to always eat out. There is absolutely nothing wrong with ordering in or eating out but if you do it often or almost everyday, your food bills will add up. Learn how to prepare simple, cheap yet healthy meals at home.
Instead of going out to the movies, invite friends over for DVD night and microwave some popcorn. Brew your own coffee instead of always buying from chain stores. If you do love to cook, grow potted herbs or even small fruits and veggies by the windowsill.
De-clutter and make money from all the extra stuff that you have
When you’re living in a small apartment, it would not do to accumulate clutter and become a pack rat. To make sure that you only have the stuff that you need in your rental area, de-clutter. Sell or donate items which you have not used or touched for the past year or so.
If you bought a dress or a pair of shoes a year ago and it still has a tag on it, it is more likely that you will not wear it ever again – so it makes more sense to sell. Once you’re finished with the de-cluttering, you will be hesitant to add new clutter to your already pristine apartment, so you can save money on buying additional knickknacks.
Take full advantage of the apartment’s facilities for renters
If your apartment unit has a gym or a swimming pool, ditch your gym membership and simply use the facilities in the building. Check out the local public library in your area which you can go to in case you want to borrow DVDs, books or even download e-books or use the Internet for free.
On the other hand, if your landlord offers certain amenities for a fee, you can simply choose the ones which will be worth your money based on your lifestyle and personal preferences. Cancel or downgrade all the other extra amenities that you can easily live without.
If you’re moving, consider areas with the highest vacancy rates
If you are considering a move, choose areas which have high vacancy rates. For areas which have vacancy rates which are below 5%, the landlords can actually demand a higher rent. If you are willing to move somewhere where the rent is cheaper, you can save a lot on rent money.
According to ApartmentGuide.com, the top five areas with the highest vacancy rates or percentage of availability as of November 2013 are:
- Memphis, Tennessee = 7.9%
- Columbia, South Carolina = 6.6%
- Jacksonville, Florida = 6.6%
- Little Rock, Arkansas = 6.6%
- Houston, Texas = 6.4%
The areas which have the lowest multi-family vacancy rates for the same period are New Haven, Connecticut; Syracuse, New York; Minneapolis, Minnesota; San Diego, California; and New York City, New York.
In case you decide to move on from being a renter to a homeowner, following these tips on how to save money will allow you to boost your savings account. The funds that you can save can go towards the down payment for your dream home, which you can buy once your finances are in better shape.
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