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Renter’s Guide to Saving Money

Renter’s Guide to Saving Money
Written by Irina Vasilescu

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.

You may also like: How to Raise Money for Your Dream House in Record Time

About the author

Irina Vasilescu

Irina Vasilescu is our crafty designer. She joined the team three years ago and is also involved in the writing process.

14 Comments

  • There are a lot of useful points here, also relevant for homeowners. I guess one of the main areas that renters benefit from is the flexibility. That’s where the opportunities arise – playing the freedom and flexibility.

    • I agree, there are lots of very useful points here that can actually be applied to homeowners as well. Even though these tips are not relevant to me at the current moment, they will be in a couple month, and I am very glad I ran into this list.

  • As I renter I really appreciate these tips. When my lease is up I will see if I can negotiate with my landlord. It never really crossed my mind to do so. I’ll also vouch for renter’s insurance. It can cover a whole range of issues and has come in handy for me.

    • In regards to negotiating, a lot of times if you’re a solid tenant with good references and head on your shoulders simply asking for a discount is all it takes. I have a spotless history with my ex landlords and between their gleaming reviews and my general disposition, my latest landlord was thrilled to cut the rent by $200/mo because she has had such poor luck with her prior tenants.

      Definitely agree with the renter’s insurance. It’s one of those costs that you just need to absorb because the day you actually need it, you’ll be very happy to have it.

  • Great Info. I rent a small apartment that I live in with my fiance and newborn daughter. We are living off of one income and money is always tight — people do not always realize all of the unexpected expenses that come with renting. We really have to watch our money so that we can be prepared for expenses that occasionally pop up out of the blue. Thanks for the tips — I definitely will be putting some of them to good use !

    • That’s a tough life, living off a tight budget specially when you have to sustain more people other than yourself. I’ve had that similar situation when my brother got broke and he went to live with me for almost 5 months just enough to get him jump started with his life again.

  • Good tips in this article. I rent my place and I really love where I live, but it is hard for me to save money sometimes. Renting can be expensive. I really like that you included how some people can become a slave to their mortgages. I want to purchase a house, but I will have to be much more financially stable than I currently am.

    • You might want to check out a rent vs mortgage calculator to see just how much better or worse you’re doing by renting. There are many situations where renting is actually the more financially stable option of the two depending on your locale and living arrangements.

      A lot of people view renting as “throwing away” your money, but in reality it can often times go much further than the equivalent payment towards a mortgage, even when adjusted for lack of equity.

    • Yes I completely agree that the tips in this article are very useful. I currently don’t have much use for these tips, but like you, I will be renting a place on my own soon as I will be living alone out of state. I have heard how expensive rent can be and can’t wait to apply these tips.

  • Thanks for the tips. I’ve been renting out a small apartment for while and I’m actually planning on taking up a roommate just to be able to split the bill and be a bit loose but I never really liked the idea of having another person share a room with me, even if it’s somebody close to me.

  • One are that you can squeeze out a discount is to provide 1/2 or full term of your tenancy’s rent in post-dated checks. This makes things more convenient for both you and your landlord as well as giving some faith to the landlord that rent will be paid on time (assuming your checks don’t bounce, which should be covered by their credit check).

  • I would like to add that it is always worth keeping a rented home in tip-top condition. Most properties require a deposit to be paid before moving in and the landlord reserves the right to withold part, or all of it if the property is left in a worse condition than when you moved in.

  • Saving money on rent can make a big impact on your budget. If you think about it, you’re rent money is one of the most important and biggest sources of where your money goes. At least for me it would be, and these tips can be useful to anyone who is looking to save money.

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