A lot of people are trying to look for ways to save on rent especially as the health crisis drags on. One of the many concerns people have now is trying to keep a roof over their head. This is one of the most basic needs people need to secure in times of a pandemic. Food and utilities are part of this and your housing situation should rank high in your priority list.
Taking out a mortgage loan versus renting is another discussion all on its own. But between the two, the people who are renting are finding it a lot more difficult. This is true especially for the ones who lost their jobs or asked to put in less hours at work. This results in lower income people bring home every month which might not be enough to pay for rent and every other need they have.
Census shares that in the third quarter of 2020, median asking for rent was at $1,160 a month. This starts to become a difficult amount to put together especially when you lose your job. It is difficult to lose your home during the health crisis. This is one of the reasons why you need to be smart with how you choose your place to rent.
How to Save On Rent
When you decide to rent, there are a few things to keep in mind to help you save money. Here are a few things to look out for. These might just mean the difference between making rent and falling behind on your monthly payment.
Select an Affordable Location
This is one of the very first considerations you need to look into when renting a place to rent. Rental depends not only on the actual unit but its location as well. There are instances where a 3-bedroom unit and a studio unit would cost the same every month. The biggest difference would be the location of the property.
The close you are to the city, there is a good chance that the unit becomes a lot more expensive. This is because a lot of people want to rent the same property to be near their place of work and other establishments in the city. When demand is high, so will the price be. This is why you need to consider the location of the property you want to rent.
You need to balance the location with your daily activities such as work or even family. If there is one thing that the health crisis proved, it is that remote work and even learning is possible. This means that you do not have to choose expensive city locations if you can work in the convenience of your own home. Before choosing a place to rent or if you are looking for a new place, look for less-expensive locations to save on rent.
Sacrifice a few Amenities
It is true that when choosing a place to rent, you also consider the amenities that go with the place. More than just being located near places you need to be close to, there are also other locations you look at. How far are you from the grocery, hospital, park, or even the train? More than these, there are also amenities you need to weigh in on when looking for a place to rent.
You might be looking for an in-unit laundry, AC, and even a fitness center in your building where you are renting. Having secure parking and even an online rent payment facility might be important for you. Having a pet friendly location could also be important for you. But remember that these amenities can increase the rent as explained by CNBC.
This is why to save on rent, you need to look at the amenities you can do away without or sacrifice. If there is a nearby park, maybe you can skip that gym in the building. If you have a small family or just starting out, washing your dishes by hand could make more sense than looking for a place with a dishwasher. All these small sacrifices could end up saving you a good amount of money every month in rent payment.
Negotiate the rate
You should also try negotiating your rate to save on rent at the very beginning with your landlord. You need to make a case and convince your landlord that you deserve a lower rent. To start off, you should always ask if the rent is open to negotiation. This is your first step in trying to assess if you can have a lower monthly payment.
One of the most effective strategies in lowering your rate down is signing a longer-term lease. When your landlord is assured of a long contract, they could be more open to a lower rate. If you do not have a car of your own, you can give up an assigned parking spot for a lower rent. You can also offer to tell people about the place if there are a lot of vacant rooms. In turn, you get a rent discount for every successful referral. The important thing is to work with your potential landlord and agree on a lower rent.
Benefits of saving money on rent
Now that you have a few tips to save on rent, it could motivate you further if you also keep in mind the benefits it can bring you. Here are some of them to look into.
Save more to buy own house
Homeownership is still the end goal for a lot of people and renting is just a step towards that direction. If you are able to save on how much you pay on rent, you can set aside a bigger amount for your plans of getting a house of your own. The first step is to save up enough for a down payment on a house. Ideally, you need to put a down payment of not less than 20% of the total price for a house. This saves you from having to pay Private Mortgage Insurance (PMI).
Strengthen your reserve fund
The health crisis highlighted the need to have a robust emergency fund. If you are able to save on rent, it can give you the chance to strengthen your reserve fund. As you do this, you increase the chances of being able to financially manage another crisis in the future. Of course, your finances are just part of it but it can lessen the things you worry about.
For one, it allows you to lower your risk of getting into debt while going through a financial crisis. Rather than maxing out your credit cards or taking out high-interest loans, you have a fund you can dip into to cover your expenses and basic needs. This gives you the chance to look for a way to get your income back up without having to worry too much about your finances.
There are a number of things you can do to try and save on rent so you can put the extra money towards your financial goals. You can also use the money to aggressively pay down debt obligations or pull your retirement date much closer. Remember that as you put in a lot of effort to lower your rent, you need to do the same to make sure you make the most of your savings.