Anyone living in a bustling metro can attest to rapidly rising rents. Strong demand and inflated pricing is disadvantageous to leaseholders in populated cities. For instance, to afford the median rent in Boston lessees must earn at least $50 per hour – assuming they avoid spending more than 30 percent of pre-tax income, and they take two weeks unpaid vacation each year. Of course, many renters in Boston opt to pay the median rent without a $50 per hour paycheck. Leaseholders likely struggle to pay down debts, save for future home purchases or afford their desired lifestyles when renting at the median price point.
How can renters minimize leasing costs and remain financially responsible? Here are four alternatives to overpaying rent in large metros.
1. Find a Roommate
More than one-third of working adults are renting in pairs, which can immensely reduce prices single renters face each month. Half the price of a two-bedroom rental is typically less expensive than a one-bedroom rental in the same building. Tenants have their own personal bedrooms, but share kitchens and common spaces to minimize living expenses. Almost half of Los Angeles renters share their homes with at least one other person, which isn’t surprising considering the $2,300 median rent price each month.
2. Search Outlying Neighborhoods
While considered less desirable due to longer commute times and compromised accessibility, neighborhoods located just outside city centers are prime locations for budget rentals. For Chicago apartments, the median rent price is $1,660 per month. Rogers Park, a Northside neighborhood within Chicago proper that borders nearby suburb Evanston, is significantly more budget-friendly with a median rent of $1,050 per month. Rogers Park is home to Loyola University, Chicago’s main campus, which allows for a large student population, lively nightlife and easy access to downtown via the L train. Although it lacks skyscrapers, Rogers Park is located on Lake Michigan, within Chicago proper and acts as a viable alternative for those who can’t afford downtown living.
3. Research the Market
Review local data on desired cities and neighborhoods before sifting through listings to determine market value. Compare prices of specific listings to the median price points of same size units. Even if renters are not ready to move, they can set up email alerts to determine demand for their desired homes. Once ready to apply, contact landlords within a timely manner from the initial posting. Renters who hire leasing agents don’t incur extra charges and have the benefit of working with professionals that are knowledgeable within their markets. Agents might even have close ties with building management to help negotiate pricing if necessary.
Word-of-mouth deals, including sublets, are often difficult to find using standard search techniques. However, many people rent out spare bedrooms in their own homes. Due to the nature of a side-income, these live-in landlords typically aren’t as strict on pricing. Sublets are best found through friends or online classifieds. Always remain cautious when renting with a stranger, no matter how good the deal may seem.
Renters can drastically reduce their rent overhead by moving cities altogether, but due to job commitments, family and friends, relocating isn’t always an option. Therefore, think outside of the box rather than target the buildings, units and amenities that every other renter considers.
This has been a guest post. I hope you enjoyed it! Since I am a bit removed from the world of renting, I asked my friend Jennifer, from Zillow, to write a piece for me. Be sure to thank her in your comments below!
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.