While waiting to save up
for their first home, most young workers will have to rent housing as they leave
school and begin their careers. In order for young people to save enough of
their salary to eventually buy a home, it is important that renters not overpay
for their housing. The standard rule is that renters should spend no more than
30 percent of their gross salary on rent. However, keeping to this standard is
becoming increasingly difficult for the majority of American renters.
Economic changes have
noticeably increased the cost of renting a home. Following the collapse of the
housing market in 2008, many former homeowners were forced to become renters. Fewer
new homes and apartment buildings are being built, and there are fewer spaces
available for people to live. Thus, the past few years have seen an increase in
the demand for rental properties. The rise in demand has increased the median
cost of rent throughout the nation. Now half of renters spend over 30 percent
of their gross salary on housing, and over a quarter of renters spend more than
50 percent of gross income on this expense. This can be a distressing problem
for those who need every penny in order to save up for their future goals.
While there may be
little that individuals can do to reduce the median rent in their area, renters
can take steps to reduce the impact of high rent:
1)
Roommates
– Sharing a rental property with someone who is trustworthy can lead to
significant savings as expenses can be split. Before you rent with another
person, try to find a roommate you already know and trust, agree upon how
expenses will be shared, and investigate how a roommate will affect your lease agreement.
2)
Rent
a smaller space – Rent often varies based on the property’s square footage. By
renting an apartment that provides just enough space for your needs, you can
spend less per month. Smaller apartments are also more energy efficient, so you
spend less on heating and air conditioning.
3)
Rent
in a money-saving location – If you must spend more on a place to live, try to
find an apartment that offers many nearby resources. For example, an apartment
near public transportation will save you the cost of always needing a car.
Renting near a library provides convenient and free entertainment.
4)
Be
a good tenant and negotiate rent increases – If you wish to avoid a rent
increase or a move at the end of your lease, negotiate with your landlord for a
price that is within your budget. This is easier to do if you are a good, quiet
tenant. The landlord will avoid losing money while trying to find a new renter,
and you get to avoid the cost of moving.
5)
Opt
to live with relatives – Living with relatives can save you a lot of money, even
if you still have to pay rent to the family member. Agree upon terms and
expectations in advance so there are no unpleasant surprises.
READERS,
what do you think?
Which of these
recommendations is the most appealing?
What other spending
sacrifices could you make in order to afford
an apartment?
References:
Fottrell, Q. (2013,
December 11). Why your rent is so damn high. Marketwatch, Wall Street Journal. Retrieved January 10, 2014, from http://www.marketwatch.com/story/more-americans-pay-50-of-their-income-in-rent-2013-12-10.
Aho, K. (n.d., 2011). July
rental advice: As rents rise, what’s a renter to do? MSN Real Estate. Retrieved January 10, 2014, from http://realestate.msn.com/july-rental-advice-as-rents-rise-whats-a-renter-to-do.
