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Whether it’s for the long term or just temporary,
you’ve made the decision to rent. The first step
is to get your financial house in order. Evaluate your
income and spending priorities to determine what percentage
of your monthly income will be spent on housing. This will
indicate a price range for you so you’ll know where
to look when you begin apartment hunting. It is important
to set up your budget and establish good spending habits
before you start the moving process. You will need to save
at least three month’s rent in order to pay your
total move-in cost, which will include your first month’s
rent, deposit, and so on. It’s not a bad idea to
save an additional month’s rent so you have something
to fall back on if you go over your budget one month.
How much apartment can I afford?
You want what every apartment renter wants: the most comfortable
surroundings you can get for the lowest possible monthly
rent. Some of today's newly constructed apartment communities
have taken luxury to an entirely new level. Some complexes
have gas fireplaces, TV monitors by the front door, drive-through
mail service, and office equipment for their tenants, among
other creature comforts.
- Priorities:
Every renter has to consider the importance of
amenities like these and others. Are they important
enough to you
to merit a rent increase of perhaps $200 more than
the rent you would pay at a more modest complex?
While some
of us consider an apartment as just a place to
hang one's hat, others place a premium on home surroundings.
Perhaps
location is the key for you; rentals in prime locations
can also be more costly. Set your priorities to
determine whether you want to spend more of your
hard-earned dollar
living in comfort, luxury and convenience, or whether
you’d rather save it for other pursuits.
- Earnings:
One of the key factors of how much rent you can afford
has to do with your monthly income. One suggestion, provided
by Metropolitan Life Insurance Company, is to spend no
more than 25 percent of your monthly gross income on
your rent. For example, if your annual salary is $30,000
per year, or $2,500 per month, you shouldn't plan to
spend more than $625 per month on rent. It is important
to remember that the extra money you allocate for rent
in a slightly more upscale complex means less money for
your other expenses -- utilities, loan payments, entertainment,
food, and most important, savings.
Annual
Salary |
Monthly
Income |
Reasonable
Rent |
Splurge
on Rent |
$20,000 |
$1667 |
$417 |
$500 |
$40,000 |
$3333 |
$833 |
$1000 |
$60,000 |
$5000 |
$1250 |
$1500 |
Moving Expenses
First-time apartment renters share one thing in common:
surprise at just how many hidden expenses they encounter.
Even veteran
renters can be caught off guard by the costs associated
with moving. In order to be well-prepared and financially
ready
for your move, review this brief run down of some
of the moving costs you may come across:
- Application
and Credit Check Fees - These can range from $10 to $35.
To check your credit before your landlord does, refer
to our credit
report section.
- Total
Move-in Cost - This is what you’ll pay to your
new landlord. The expense generally includes first month’s
rent, Security Deposit, Pet Deposit, other deposits,
and sometimes last month’s rent. Refer to
the Lease
Section for more on how to determine the total move-in
cost.
- Moving
and Truck Rental – How will you move
your household items? Will you hire professional
movers, move yourself,
or something in between? You can estimate your
expenses and even set up a move using a mover or
rental truck
by visiting our moving
section.
- Moving
Supplies – Consider that you will need
items such as moving boxes, crates, packing tape,
packing supplies,
moving blankets, and so on to protect your things
during their transport. Moving
supplies and boxes are available
at a discount through ApartmentStores.com.
- Long
Distance Moves – There’s a whole
different set of costs associated with these types
of moves. Consider
storage costs, vehicle shipping costs, gas mileage,
lodging costs for members of the household and
so on. You can
get an estimate for a long distance move, for storage
or explore other moving solutions by visiting our moving
section.
- Utilities -
Your rent will often include sewer, water, trash,
and pest control. Gas and electricity are almost
always paid
separately by the tenant. Don’t forget about
telephone, cable and high speed internet charges.
How do I continue to be able to afford
my apartment?
Once you've moved in, you should continue
to follow your budget. If you feel you
need to
save even more
money, there
are other ways to cut back. Consider
spending less on food, transportation,
and entertainment.
This
doesn't mean you
have to starve while you sit at home
doing nothing, but there are easy ways
to save money.
Consider the
following
options:
- Pay
yourself first: request regular paycheck deductions to
go directly into your savings account.
- Find
out where it goes: keep a money diary for a few days
and look for opportunities to cut back.
- Read
your supermarket’s sales flyer to determine
which buys will allow you to save the most.
- Pack
a lunch instead of eating out every day.
- Look
for free events and activities in your area to substitute
more costly forms of entertainment.
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