Calculating Your Actual Living Costs

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When you’re looking for an apartment or any other type of rental property, you are probably focused on all of the things you consider “must haves.” Price may be another consideration, as it should be. What many renters fail to think about, however, is something that will have serious financial implications once you get settled in. You can prevent that from happening if you know what to look for and how to spot red flags that should be warning signs for you.

What Your Rent Includes

Before you sign on the dotted line and lock yourself into a lease, be sure you know what you’re paying for and what is included in your rent. If the rent is very low, there may be a reason for that. The landlord may be able to make a profit by charging less for rent if they place the burden of paying for utilities on you – the tenant. Depending on where you live, some things may or may not be included. Water, for example, is often included in rent. Heat may not be, however.

Look carefully at the unit. If you have your own heating and air conditioning unit, and your own hot water heater, it’s probably safe to conclude that you’ll be responsible for all of your utilities. So when you see a place that is advertised at a rent that looks really cheap, assume you’re going to have to pay for at least some of your own utilities.

If you live in a place where everything from your oven and hot water heater to your heat and air conditioning are electric, you’ll probably have to add another $150 to $200 to your rent every month to come up with more realistic dollar amount that you should use when budgeting for your necessary living costs. That will depend on how well constructed and how well insulated the property is.

Location is Everything

Real estate experts teach their clients about the importance of location. It is just as important to renters as it is to property owners. Depending on where you live, location – or specific neighborhoods may come with a hefty price tag. Some people may insist on living in a certain location without considering budget, whether they can afford rent and other living expenses, or practicality. A great location may cost you more in base rent, but if you look at every other important consideration, you may wind up saving money.

  • Will the location allow you to walk to work or take public transportation?
  • Will you be able to live without a car, or need it on an occasional basis?
  • Are there conveniences around the area or in the rental property that may save you money in other ways? If there is a fitness center on the property, can or will you cancel a gym membership? Are there grocery stores or other markets you’d shop at in the area? Would the convenience of nearby shopping help you lessen the frequency of eating out, grabbing fast food or ordering take-out?
  • Does the property have 24-hour attendants or gated security with an alarm system? If it does, these benefits may prove beneficial to you on your rental insurance rates.

How Much Do You Value Amenities and Bonus Features?

If you’re going to pay more for location, are you willing to make other sacrifices? Unless the higher rent you’d pay for a better location is going to help you save money in other ways, you need to decide what you’re willing to give up so you can afford a pricier location. Are there conveniences like in-unit laundry that are very important to you?

Would you have to spend several hours taking your laundry to a laundromat or running back and forth between your rental and a shared laundry room? How much would you have to pay to do your laundry in a coin-operated laundry facility? If you have to drive to a laundromat, and then pay to do your laundry, how much are you spending, just for laundry (including the transportation,) each month? Having convenient laundry, especially if you’re not locked into a schedule or forced to spend several hours doing laundry when you could be doing something else, may be important enough to justify the added rent.

Make Sure You Read the Small Print

Do you take the time to read the fine print on your lease or other agreements with the landlord or property management company? What are the policies about sub-leasing or breaking a lease? Will you wind up having to pay a large fee? What d

Does the landlord charge for damages, and what do they consider damage beyond normal wear and tear?

Don’t forget that you’ll have to pay a security deposit, and some landlords require the deposit plus first and last month’s rent upfront. If you are moving to a different city, town or state, you may have to pay set up fees for gas, electric, cable, Internet, and phone. Those fees are probably not refundable, and probably don’t get deducted from your bill.

While you may not be able know for certain what some of your living costs as a renter will be, you can predict things like utility costs, rental insurance, transportation, and other fixed monthly bills. Those are all costs that need to be factored into your total cost of living.

 

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