How to be a street-smart renter

Street smart renter hero

Finding an apartment can be exciting, stressful ... and expensive. The median monthly rent is $872, according to Zillow, and is often much higher in big cities. By combining technology (like apps), with good old-fashioned pavement-pounding, you can find the right place, with minimal stress.

1

Set a realistic budget

Ideally, you want to find an apartment that doesn’t require you to eat ramen noodles every night. The general rule is to spend less than 30 percent of your total income on housing. That’s not possible for everyone, though, since factors like student loans and the cost of living in your area will affect how much of your income is available for rent. The key is to figure out an amount that works for you. The Better Money Habits Spending Analysis Tool can help you figure out how housing fits into your overall budget. 

“51% of millennials overspend on rent.”

Source: Rent.com, 2015

2

Narrow your search

Now that you know your budget, think about your priorities. This can help you with important decisions, like choosing a neighborhood. It can also help you make the most of websites and apps, since most allow you to search by apartment size, price, location and more. Weigh your must-haves and nice-to-haves. You’re probably not getting rid of your dog, but you may be able to live without a dishwasher. 

“76% of millennials look for rentals on their mobile devices.”

Source: Zillow, 2016

Tip: If you’ve got first-class taste but a coach budget, roommates are a great option. Social media can help you connect, and in some areas, websites dedicated to roommate matching are gaining traction. 

3

Choose a neighborhood

At some point, someone has probably told you the importance of “location, location, location.” But it’s true: Location is a primary factor in rent price, as well as your daily quality of life once you move in. So it’s important you pick the right one. Try to focus your search on a few areas—this will let you dig deeper into what’s available. Remember: 

  • Virtual reality and 360º cameras have made it possible to view apartments from your phone or computer. But there’s no substitute for an in-person visit. What if your dream apartment is next to a noisy construction site? 
  • You may get extra space or cheaper rent in more remote areas, but consider factors like transportation and safety. A long commute or stolen smartphone might offset any discount in rent. 
4

Prepare for extra costs

In addition to rent, you’ll need to budget for extra costs. You probably know about utilities (heat, electric, water), plus your internet and cable bills. But there are monthly costs you may not have considered—for instance, pay-to-use laundry machines (or a laundromat), parking fees, pet fees or renters insurance. 

Be sure to think about any upfront costs you’ll run into, too. These might include an application fee, a building move-in fee, movers if you need them, a security deposit, and the first- and last-month’s rent. 

Tip: Ask if any of the monthly expenses are included in your rent and see if the landlord is willing to wave any of the upfront costs. These perks can help you decide between two similar apartments. 

5

Consider negotiating

Often, you can negotiate your lease. Start by positioning yourself as a dream tenant: Bring proper documentation, such as a recent credit report, letter(s) of reference from your landlord(s), pet information and proof of employment. Then, back up your asks. For instance: 

  • Can you get a better deal if you sign a two-year lease? The landlord won’t have turnover costs next year. 
  • Can you get a discount for using automatic payments? They give your landlord a predictable payment schedule. 
  • Is the building new construction? Property managers hoping to fill new buildings may be more likely to offer incentives in exchange for guaranteed occupants. 

You may also be able to negotiate one-offs, such as one month free when you sign, or a new coat of paint and updated fixtures. 

6

Read the lease—all of it

Once you’ve found a place, the paperwork can feel like a formality. But reading the entire lease is crucial. No matter what kind of deal you discussed with a landlord or agent, it’s worthless unless it’s in writing. Before signing the lease, look for: 

  • Length of lease, renewal details, and policies for rent, due dates and late fees. 
  • Who’s responsible for repairs and maintenance. 
  • House rules (referred to, generally, as “acceptable use of property”) on items such as guests, smoking, eviction and subletting. 
  • Anything the landlord or agent verbally promised you. 

Tip: Do a final walk-through before you move in, and use your phone to take photos. This documents the condition prior to your residency. 

Close Disclaimer
The material provided on this website is for informational use only and is not intended for financial or investment advice. Bank of America and/or its affiliates, and Khan Academy, assume no liability for any loss or damage resulting from one’s reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional when making decisions regarding your financial or investment options.

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