Setting a Realistic Rent Price Range: What to Include in Your Apartment Search Budget

By Danni White on November 14, 2016

When you are seriously considering becoming a renter for the first time especially as a college student, there are many things to think about before you can actually settle into your new apartment.

Among many other things, the main factor to consider revolves around budgeting for your apartment ahead of time. If you expect to have roommates, an extended budget will be needed for them as well.

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Budgeting, kind of like paying taxes, isn’t going to be the fun part of moving into your new place, but it is necessary as it relieves a lot of headaches surrounding this new venture. Being on top of your budget can also give you a leg up over other applicants who may not be as budget-conscious.

There are a number of ways to create your budget. If you’re a paper and pen type of person, a simple offline spreadsheet might work for you. If you prefer to crunch numbers online, a program like Mint, You Need a Budget (YNAB), or PearBudget may work better. Detail all of your expenses, analyze where you can cut spending, and save money.

With that said, here are some pointers to assist you in setting a realistic budget before settling in to your new place:

AFFORDABILITY

Mary Schwartz and Ellen Wilson of the U.S. Census Bureau seem to suggest based on history and previous data that rent costs should not exceed 20 percent of one’s monthly income. In today’s economy, 30 percent might be acceptable. So if your income hovers around $5,000 a month, look for an apartment that has rent costs of $1,500 or less.

RENT

This is going to be your primary and probably the largest expense on your budget. Pay on time and you will avoid late fees and penalties and also stay in good favor with your landlord. Get behind and an extra fee or two will be the result. To keep your budget tight, take care of this expense on time.

LOCATION

Location is key. Your rent will be determined by the area you’re living in. Across the country, rent is highly competitive especially in big cities like Los Angeles, Austin, San Francisco, and New York. When competition is the big elephant in the room, it is highly important to have a solid budget.

Living in the city might sound like fun, but it’ll be more of a burden if you can’t afford it. Do deep research and check out all apartments in livable areas surrounding your school or work or at least in comfortable commutable distance to both.

TRANSPORTATION

Of course, if you are near your school or place of work, transportation costs will be low or to a minimum. However, you still need to factor in costs of possible trips out of the city or state, bus or subway passes, and of course, if you choose to live away from the city, include gas costs for the daily back and forth commute.

UTILITIES

You should generally expect to pay for electricity, water, cable, internet, A/C, and heating and gas separate from your rent. Some apartment complexes will cover some of the utilities like water and electricity, but you will need to check with the landlord first before you settle so you can know what to expect. The landlord will give you information about utility providers before move-in.

ALL UPFRONT

Renting might be cheaper than buying a place outright, but you can expect to hand over some serious cash before putting your key in the door. Most landlords require a security deposit. Keep in mind that the deposit will vary in cost and the higher the rent, the higher the deposit will be.

You may also be asked to make a first month’s rent payment and a last month’s rent payment as well as a pet deposit (if you have one) and a broker’s fee. It is important to know ahead of time what will be required so you can put it in your budget.

FURNITURE

If your apartment is fully furnished then you are good to go. If you already possess furniture or have furniture passed down to you then good luck. If you don’t have much furniture yet, you will need at least basic things starting out.

Keep in mind that furniture is a commodity that you can negotiate prices for depending on the vendor and/or seller. Visit some thrift stores or odds and ends stores to get what you need and then as you settle in and budget well, you can make purchases for bigger or more expensive furniture if you so desire.

FUN

A night on the town or a weekend at the movies with friends is always fun, but it can get very expensive pretty quickly. To keep this under control, put a certain amount into your budget to cover these expenses. Also, if you’re the type who seems to always be paying, hold onto your money and get your friends to pitch in. Besides that, there are dozens of cheap ways to have fun.

While it may seem like a lot of work at first, if you take one step at a time, you will soon get a good grasp of knowing what you can and cannot afford. Once you establish a budget, you will put your mind at ease and be able to spend and save like an adult.

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