The Cost to Rent an Apartment as a New Graduate
You're done with school and ready to move into your first post-grad apartment – a new place to go with your new life. But what does it cost to rent an apartment these days? How can you figure out if an apartment is really affordable?
According to Apartment List, rents are on the rise. Even a small rent increase makes an impact on your housing costs and, therefore, your overall budget.
As you head out on your own and need to decide how much you can spend each month on rent, here are some factors to take into consideration.
Your Financial Obligations
Before you begin searching for a place, gain a complete understanding of both your current and upcoming financial obligations. Your monthly living costs will include expenses like utilities (electricity, gas, internet, etc.), transportation (car expenses or public transit passes) and food (grocery shopping and meals out). With your time as a student coming to an end, you may have to start paying back your student loans in the not-so-distant future, too.
These day-to-day and monthly living expenses matter a great deal when deciding your rental budget. If you're new to living on your own, a simple way to find out costs like utilities is to ask friends who are already renting. This way, you'll know all the moving parts of your financial situation.
Key takeaway: Get a firm idea of what you'll be spending on everything but rent each month, so you know what you'll have left, both to pay rent and to put into savings.
When you begin looking for a place to rent, location will play a large role in your decision-making process. You may find that the cost to rent an apartment is less if you choose to live 30 minutes away from work as opposed to 10, or that the suburbs are more affordable than the city.
However, there's a trade off. Your longer commute could come with additional expenses for parking, gas and vehicle maintenance. Then there's the quality of life question. Time spent commuting is time you could spend doing other things. Also, consider how important it is for you to be close to public transportation, grocery stores, restaurants, dry cleaners and other businesses that make your life a little bit easier.
Key takeaway: Where you live can affect not only what you pay for rent but also your quality of life. Know what your deal breakers are for both commuting and creature comforts before signing a lease.
Your Living Preferences
Now that you know your monthly obligations outside of rent and have a good idea of what rent will cost where you're interested in living, you can make your next decision: live solo or find roommates?
When you look at the price differences between one- and two-bedroom apartments, the rates for two-bedroom units are rarely double the cost of one-bedroom units. This means that if you're not averse to sharing your living space, having a roommate might help you afford not just a bigger apartment but one in a part of town you wouldn't be able to afford on your own.
When considering roommate situations, two- and three-bedroom apartments can come with one or two bathrooms, so this is something to discuss with potential roommates. While an extra bathroom could mean a slight increase in rent, it just might save you some frustration if you and your roommate(s) work similar schedules.
If your choice is to go solo, you can potentially save money by exploring studios or junior one-bedroom apartments.
Key takeaway: A roommate could help you afford either a larger apartment or an apartment in a location you couldn't afford on your own.