When I got ready to rent my first apartment with my then-fiance, I had absolutely no idea what to expect or what to look for in a first apartment. Things with the first apartment turned out fairly well, which is surprising considering my lack of knowledge and the disaster that was going on in my personal life as I got married and then divorced in less than a year while still living in that first apartment.
Despite all that, or maybe because of it, I learned a lot about life, love, and apartment hunting that year and I was able to do much better when I got ready to pick out my next apartment at the end of my lease.
Here are a few things I learned the hard way, but you should know before you go hunting for your first apartment.
Your Realistic Budget and The Market
When my fiance and I started looking for our first apartment, we had a budget of $600/month in mind for a 1-2 bedroom apartment. (Where we came up with that I have no idea as neither of us actually had a written monthly budget.) After viewing nearly 30 properties and making calls all over town, we realized that this was definitely on the low end for an apartment in our college town.
Luckily, after looking for a few weeks we were able to find an apartment with utilities included for $620/month.
If I could do this over again, I would have a better idea of what I could reasonably afford because I would have a written monthly budget for all of my money, much like I do now. I would also do some research to find out what the going-rate for apartments is in the community.
Check Up on Property Management Company
The property management company I ended up renting that first apartment from was a nightmare to deal with. They managed a lot of property in the town and it was clear that they had more than they could adequately manage. When I moved in I was told the apartment had already been cleaned, and yet it was disgusting! I ended up cleaning it myself and then when I left at the end of the lease I cleaned it very well and still had to forfeit most of my deposit as it wasn't up to their "standards." ...continue reading
This guest post is written by Jennifer Riner of Zillow.
Most first-time homebuyers often debate whether they are ready to invest in their first properties and transition from renting to buying. Hesitation on such large purchases is inherent.
However, rent prices are more expensive than ever, prompting many lessees to dip into their savings and apply for mortgages without second thought. After all, owning an affordable home is a long-term investment that hopefully presents returns at resale, whereas renting only helps the landlord build equity.
The American dream of buying a home and make the transition from renting to buying starts with sensible financials, but homeownership isn’t for everyone. Ask the following questions before breaking a lease and moving money around to support a down payment.
Is a mortgage affordable?
Generally, putting down at least 20 percent of a home’s purchase price with a loan covering no more than 80 percent is recommended when making the transition from renting to buying. Loans of more than 80 percent of the home price often require homeowners to pay additional insurance to protect their lenders’ investments, called private mortgage insurance.
Credit scores significantly impact interest rates offered to borrowers, even when buyers provide heftier down payments. Typically, credit scores under 680 are red flags to bankers. They might agree to financing, but usually with increased interest rates or less favorable terms. ...continue reading
Sometimes I miss the good 'old days, back when I wasn't a "homeowner" and I got by with living in a two bedroom apartment. Life was simpler back then. I had fewer (and smaller) bills to worry about and I never had to make repairs or upgrades to my living space. While home-ownership certainly has its benefits over apartment living, living in an apartment can really save you some money if you go about it in the right way. Here are just a few ways I saved money while I was living in an apartment.
Not Getting a Roommate
While deciding to live alone in a two bedroom apartment might not seem like the best use of space or money, in the long run this decision saved me a ton of money and my sanity. Lots of my college classmates decided to share an apartment with people they went to high school with, or people they met during their college classes. For most of these people the classic advice "don't room with someone you're friends with" turned out to be very true. Most of these people are no longer speaking to each other and they certainly aren't still living together. In fact, many of them didn't even make it through their one year lease term. This resulted in them having to look for a new place to live mid-school year and pay a large amount in fees to get out of their rental contract early.
Having a roommate might save you some money on rent and utilities, but it doesn't usually save you any money on groceries. The grocery situation is always a tricky one, no matter if you decide to share groceries and split the bill or have each individual provide their own food without any sharing. Groceries and splitting apartment chores always seem to be the big factors that split roommates up.
Live Modestly in an Apartment
By not seeking the most glamorous apartment in the most luxurious neighborhood, I was able to rent my apartments by myself in college and still have them remain affordable. When you are a full-time college student working a part-time job, you don't need to have all of life's luxuries in your apartment. Your main focus should be on your education (and having a little fun), not on having the best apartment out of everyone you know.
Part of living modestly also means keeping your other living expenses and bills in check too. Simple things like choosing Netflix over cable TV and setting your thermostat a little lower than you'd prefer during the winter will go a long way in helping you keep your living expenses low. Luckily, the utility bills associated with apartment living are usually much lower than that of a house to begin with. When I lived in an apartment, my monthly utility bills ranged from $30-50 each month (for all my utilities combined)!
There's something to be said for truly "living like a broke college student," this is a great way to keep your living expenses low and build wealth quickly if you are no longer a student. I made the mistake of taking on too big a mortgage after college and now I'm almost "house poor". There are certainly days that I miss the cheaper lifestyle that comes with apartment living.
How else do you think apartment living can save you money?
Photo courtesy of: Matthew Trentacoste