Finding an apartment or single-family rental is a stressful process, especially since renting is largely unaffordable in major cities like Los Angeles, San Francisco and New York. For first-time renters, the leasing process is even more intimidating. However, taking a few preliminary steps before you start your search can help make finding housing easier.
Before you lock down your next rental, review the following steps:
1. SET A BUDGET
Financial advisors recommend lessees pay no more than 30 percent of their income on rent. But that doesn’t necessarily mean you should spend up to 30 percent, especially if you’re trying to save for a down payment or an upcoming retirement. If you’re not a mathematician, using a rental affordability calculator makes estimating a monthly rental budget simple.
According to Zillow, LA rents cost a median monthly price of $2,490, which represents a 5.3 percent increase from last year. Compared to the U.S. as a whole, where the median rent price is $1,362 per month – up 3.7 percent in the last year – finding an apartment in LA is costly.
The breakeven horizon, or the typical time it takes for the costs of renting a home in a given area to exceed the costs of having purchased the very same home, is 5 years in Los Angeles. Five years makes it one of the longest breakeven horizons across the top U.S. metros. Unfortunately, renters in LA currently pay 48.2 percent of their income on rent, which is significantly higher than the national average of 30.1 percent.
2. MAKE A MUST-HAVE LIST
Once you set a budget, it’s time to determine your optimal location, property type, amenities and interior preferences. For example, wood floors in a prime neighborhood are likely to cost more than carpeting in a less desirable area. If you’re trying to save money, think about what you really need versus the small upgrades you want. After all, renters are probably only planning to live in a property for one or two years. If you save money now, you might have a bigger budget to rent a larger, upgraded apartment in the future.
There may be amenities you just can’t forgo, such as parking, in-unit washer and dryer and elevator access. For these cases, make sure to narrow your search using those terms or ask your leasing agent to filter listings.
3. FIND OUT YOUR UTILITY COSTS
Many new leaseholders forget about utility costs when estimating their rental budgets. Electricity, for example, costs about $30 to $50 a month – but can get higher if you tend to leave the lights on all the time. During the summer, apartments with air conditioning become even costlier, but you can limit your usage or keep A/C turned off if the air is cool enough. On average, air conditioning costs renters around $250 to $300 per year, but varies a lot depending on where you live. Renters in the south might spend more for a longer period of time due to higher temperatures, but then again, higher temperatures mean less money spent on heating costs.
Don’t forget about Internet and cable, either. Internet usually costs about $45 per month per household, but could be split up among roommates or shared with adjacent apartments. Cable is optional, and might be unnecessary if you have Internet and a Netflix account. If you do need cable, deals run constantly, so ask your provider about their latest offerings.
4. TRY NEGOTIATING
Most people don’t realize you can negotiate the price of a rental. Landlords are actually pretty flexible, especially during the slow move season. In colder climates, the winter is pretty inactive in the rental housing industry. If a landlord is offering a deal on rent, don’t try to push the envelope and ask for a bigger discount. Low-balling might make your landlord weary of whether you can afford the monthly costs. When application time comes, he or she could deny you based on this assumption.
Finding an apartment for the first time is overwhelming, but preparing yourself for the road ahead helps alleviate potential complications. Since The Rental Girl is a small boutique agency, rather than a big leasing cooperation, we take the time to offer rental advice and guide our renters through the application process to make things as stress-free as possible. If you’re a first time home renter and looking to work with a company who cares about your individual taste and needs, search our rentals by neighborhood, and get in contact with one of The Rental Girl agents!
The Rental Girl invites Guest Bloggers with unique perspectives and helpful housing-related advice to post on our blog. Jennifer Riner, author of this blog post, is a Marketing Content Coordinator at Zillow. Zillow is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help.
Happy Hunting,
The Rental Girl
It was interesting to learn that it is possible to negotiate the price of a rental. My sister is about to graduate from college, and she needs to find an apartment she can move into. I’ll tell her that she should be able to negotiate when looking for the right apartment.