There are many ways homeowners can save money, but what about if you’re a renter?
If you are graduating from college and getting your first apartment or renting an apartment during a lifestyle transition, here are some tips to save you money.
1. Location, location, location
As a newly minted college graduate, I made the mistake of renting an apartment in the big city of Atlanta without even having a job lined up.
I got very lucky – my first job ended up being just a few miles from my apartment.
What I should have done
This one is a bit tough because I didn’t have any family or friends in Atlanta when I moved there. I guess I could have lived in a hotel while I interviewed and found a job.
Jordan – one of the listener’s to my show – is sleeping on his cousin’s couch in NYC while he searches for work. That’s the way to do it if you can.
I should have waited to sign a lease until I knew which part the city I would be working.
Long commutes are a drain on your time and finances.
2. Balance wants and needs
I also made the mistake of renting a luxury apartment (Post Properties) without having any income! The only reason I was able to because my roommate (a guy from my fraternity) had a big enough income at his first job to cover the entire lease.
Six months after I signed the lease, the student loan bills started rolling in. Then I went out and financed a new vehicle. I lived the paycheck-to-paycheck lifestyle for years because I didn’t know any better and wasn’t looking towards my future.
What I should have done
- Set a budget to see what I could afford.
- Limited my apartment search to prices in the budget.
- Never bought that brand new Jeep.
3. Get a long-term lease
- A two-year lease is cheaper than an 18-month lease.
- An 18-month lease is cheaper than a 12-month lease.
- A 12-month lease is cheaper than a 6-month lease.
- A 6-month lease is cheaper than a month-to-month lease.
The longer the lease, usually the less it costs. You’re saving the landlord money because they don’t have to clean/replace the carpet and paint the place as frequently.
4. Always negotiate on lease renewals
Once your lease is up for renewal, the landlord usually wants to increase your rent. You have a bit of an advantage in negotiating the increase down or to zero.
If you move, the landlord has to have the place cleaned. Additionally, the apartment will be unoccupied during that time. And in their worst case scenario – they have nobody lined up to move in. Every week and month the place remains vacant the owner loses money.
If you like the place, try to negotiate for a lower increase or to keep your rent the same. You have power if you’re willing to move out.
But if there are more renters than space or you’re in a hot rental market, the landlord might be willing to let you walk so they can jack up the rent price for the next tenant.
It never hurts to ask for a discount.
5. Move close to public transportation
Our new rental house is within walking distance of the Dallas rail line. You can save a lot of money if you choose a location that doesn’t require you to own a car or to own a cheap old car you don’t drive much.
When looking for apartments consider:
- Access to public transportation
- Grocery stores
The less you have to drive or take the train, the more you can save.
6. Shop around for deals
The best deal on an apartment requires considering all the options. Look outside the apartment finder magazines at the grocery store. The kind senior citizen with the basement or apartment above the garage for rent may be just what you’re looking for.
- Asking co-workers and friends
7. Save energy
Homeowners have lots of ways to save money on their homes. Don’t feel left out as a renter! There are also many ways for renters to save money on energy.
The lights installed in your apartment may be inefficient. You can use energy-efficient light bulbs such as LEDs to save money.
How to know if LEDs are worth the cost
- Use this test to see if LED light bulbs can save you money.
- Keep any lights you replace in a drawer.
- When you move out take your pricier LED lights with you!
According to MarketWatch vampire appliances may waste $250+ a year
In total, standby energy consumption is about 10 percent of a typical electric bill.
A good way to make sure electronics are not sucking up energy (even when the T.V. is supposed to be off) is to plug things into a smart power strip.
For example, turning off the T.V. turns off the DVD player, Apple TV, surround sound speakers, etc.
Turn off the lights
Yep, seems simple enough but people still forget to turn off the lights when they leave for work.
Not having to heat/cool the place while you’re away is an easy way to save money if there is a programmable thermostat.
Air dry your laundry
Nothing beats a clothes rack instead of using a dryer for saving money. As a side benefit, you never have to worry about clothes shrinking.
8. Get a roommate
Splitting the rent with someone will always be cheaper than paying for a place of your own. In my first apartment, I paid $450/month with a roommate. A couple of years later I was dumping $1,000/month for a one-bedroom apartment.
I can’t fault anyone for wanting to pay more to live alone. There’s nothing quite like coming home and being the king or queen of the castle.
If it fits your budget and you’re ok with spending the extra to live alone, your happiness may be more important than saving money.
9. Buy cheap stuff
If this is your first time furnishing an apartment here’s something nobody selling furniture is going to tell you – over the next five years you will sell or throw away everything you’re buying today.
- Bed – sold it
- Couch – sold it
- T.V. – sold it
- Kitchen table sold it
Because at some point your meager earnings will grow. Or you might get married. Someday you might buy a house. Or you might move in with someone else.
And all that stuff you’ve bought already or want to buy – it’s going away. Which means it’s just temporary in your life.
Ask anyone who’s been out of college for five or more years.
So if you know the couch you want today will no longer be with you in five years, does that change your mind on how much you should spend on it?
Hopefully, it does. You can use your hard earned more for much more fun things (like travel!)
Shop these places for great deals on used furniture:
10. Forget cable
The average cable bill is $100/month – $1,200 a year!. If you’re making $24,000/year out of college, 5% of your pay is going towards the evil cable companies.
Check out these [free and low-cost alternatives to cable].
11. Buy combo appliances to save money
I’m a huge fan of the Instapot. I picked mine up from Walmart (shop around for the best price!), and it’s replaced our rice cooker and two crock pots.
Cooking at home once in a while can save you hundreds of dollars a month over eating out. What are the basics in home appliances?
If you have those kitchen appliances, you can handle enough recipes to feed you for the next five years.
Buy the best quality you can afford.
For example, if you buy a great chef’s knife, you’ll never have to buy another one again in your life. I’ve had my $200 Kitchen Aid mixer (because I like to bake) for fifteen years.
Buy renters insurance
Renter’s insurance is the one expense on this list that has the lowest payback – until you need it.
Renter’s insurance will protect your purchases from theft, fire, and flood damage (depending on the policy). It’s dirt cheap to get.