Remember Jimmy McMillan III, the NYC resident who founded the “Rent Is Too Damn High Party”? Well, Jimmy, you might want to come out of retirement. Chances are a lot of Americans will get behind your message this election season!
Yes, the news on nationwide rents is grim. In fact, the latest report from Harvard reveals that due to a shockingly pricey rental market, the number of cost-burdened Americans is the highest it’s ever been. Half of U.S. renters spend 30 percent of their income on rent, and almost 3 in 10 spend more than 50 percent. To put these costs into context, Dwellsy CEO and cofounder Jonas Bordo says in December the nationwide median asking rent for a two-bedroom apartment was $1,450. For a three-bedroom single-family home rental, that number rose to $1,855.
“Rental prices have been driven upward by a perfect storm of factors, including increased demand (especially during the pandemic), lack of inventory, inflation, and even sky-high interest rates, which have kept many would-be homebuyers in the rental space,” says Bordo, coauthor along with Hannah Hildebolt of Everything You Need to Know About Renting But Didn’t Know to Ask: All the Insider Dirt to Help You Get the Best Deal and Avoid Disaster (Matt Holt, August 2023, ISBN: 978-1-6377439-2-8, $21.95).
“Even though rent increases have been much lower than usual over the past year, stable doesn’t mean that prices are low…or even moderate,” he continues. “To renters who are still shell-shocked from previous years’ increases—many of whose wages haven’t kept up with inflation—the current price feels burdensome indeed.”
That’s the bad news. The good news is consumers have more control than they think. In other words, don’t go into your rental search believing you’re powerless—because you’re not.
With several decades’ experience as a renter, landlord, property manager, and current CEO of the largest U.S. rental marketplace, Bordo is a trusted authority on all things rent-related. As its title suggests, his book is a comprehensive guide to help people “win” at renting. It covers the entire process, from preparing for the rental search to getting your security deposit back after your lease is up—and contains lots of advice to help you minimize costs along the way.
Here, Bordo shares nine tips to help renters keep costs down (even if just a little):
Make sure your rental search is broad enough. Many well-known rental sites charge landlords to list properties. From a scam-avoidance perspective, this makes them safer bets than sites like Craigslist and Facebook Marketplace, but since they do charge, the variety of listings can be limited. In particular, you’re less likely to find individually owned rentals on pay-to-play sites. (And, as we’ll discuss later, “mom-and-pop” landlords are often more willing to negotiate.)
“At Dwellsy, we take a different approach,” says Bordo. “We don’t charge landlords to list properties, so we have a pool of over 14 million diverse listings—most of which you won’t find on pay-to-play sites. Also, Dwellsy works to be a fraud-free space by verifying each listing. Before posting a property, landlords must go through a multi-step authentication process.”
Be ready to inquire, tour, and apply at a moment’s notice. Here’s the most important rule of searching for an apartment: You must be first. First to inquire. First to apply. First to sign a lease and pay the deposit after the application is approved. This is especially true for more affordable rentals in a pricey market—they’re more highly sought-after than Taylor Swift tickets.
“Most landlords process inquiries and applications in the order they’re received,” says Bordo. “If you’re second in line to see a place, your odds of getting it aren’t as high as they would be if you were first. If you’re fifth in line, your odds are 5 percent or less. And here’s the thing: In a really hot market, the difference between first and fifth place can be just a few minutes.”
Tools like Dwellsy Edge ($29.99 per year) can help. You’ll receive a text alert the moment a new property that meets your criteria becomes available, so the burden won’t be on you to constantly monitor new listings.
Think beyond rent. Will the utility bills kill you? Like everything else these days, utility prices are going up. A seemingly affordable rent can quickly be offset by pricey utility bills. When you tour the property, ask the landlord what the average monthly utility costs are.
“You can also watch for signs that the rental isn’t energy efficient during your tour,” says Bordo. “Be aware of things like single- versus double-paned windows, drafts, high-ceilinged rooms that will be harder to heat, older appliances, and lackluster insulation. If you can easily hear noise from outside or the unit next door, chances are your heat and AC will have to work harder.”
Scour the lease for hidden fees before signing. Too many renters lease what they think is an affordable place, only to be hit with a pile of unexpected fees that can total up to 20 percent of the cost of rent. They can range from background and credit check fees to move-in fees to pet fees. Some may be a one-time expense, while others are recurring. NOTE to EDITOR: See attached tipsheet for a list of common hidden fees to watch out for.
Look for ways to negotiate your lease. Nothing is set in stone until you sign, and many landlords are more willing to work with renters than you might think. This is especially true for individual “mom-and-pop” landlords who don’t have to operate within the regulations laid out by a property management company or corporate owner. While you can ask for a price break, most landlords have more wiggle room in other areas: waived fees, a reduced security deposit, etc.
“Consider offering your landlord something in return for better lease terms,” advises Bordo. “You might promise to help with maintenance or yard work, commit to a longer lease, etc. Get creative! I know of a former Division 1 tennis player who offered to run free tennis clinics for her apartment complex’s residents in exchange for reduced rent…and management said yes. Whatever you and your landlord agree on, make sure it’s spelled out in the lease before signing.” NOTE to EDITOR: See attached tipsheet for information on negotiating a lease.
Consider finding a roommate. Maybe you’ve just never thought of having a roommate…or maybe you fall into the “strongly opposed” category. Nevertheless, it’s worth some thought.
“It can be tough to go from enjoying your own space to sharing it,” admits Bordo. “However, a carefully screened roommate can lower your expenses while allowing you to rent a larger, more upscale, or more conveniently located property. If you go this route, be sure to carefully consider each person’s needs, preferences, and ‘house rules’ before bunking up together, ranging from how much social interaction you want to who’ll clean what to how you’ll divide up the bills.”
Don’t underestimate the impact of timing. Asking rents tend to follow a (fairly) predictable yearly cycle, which means that some months are better than others when it comes to finding an affordable lease. Summer and early fall tend to be the most expensive seasons, and prices typically fall to their lowest points during January and February.
“This is one of the best-kept secrets in the rental industry,” says Bordo. “An apartment that’s $1,500 in August might go for $1,350 in January. That’s a 10 percent price difference that will save you $1,800 over the course of a year. Not everyone is able to choose when they move, but if you can wait for a favorable time, you can materially lower your expenses.”
Be aware of move-in specials and other incentives. If you’re actively looking for a new place, you’re probably on the alert for these—but established renters can take advantage of them, too.
“I advised one renter in a particularly expensive market whose apartment complex was offering a move-in special for a 13-month lease at $2,500 per month,” says Bordo. “Meanwhile, she was paying $2,900 and had been offered a 12-month renewal at $3,100. I urged her to ask for the move-in special! If the answer was no, she could then decide if saving $600 a month was worth moving out of her current unit and into a new one.”
Finally, ask yourself the big question: Should you move out of your pricey market? If you are a remote worker or have flexibility regarding where you live, you could potentially save hundreds of dollars each month by moving to a more affordable market. Alternatively, you could spend the same amount of money but score a much bigger rental.
“For instance, a monthly rental budget of $2,030 would secure you a three-bedroom house in Nashville,” says Bordo. “A similar budget of $2,017 would cover only a one-bedroom apartment in Washington, D.C. Dwellsy tracks and publishes this data monthly, and maintains an interactive map that can tell you which areas of the country are most affordable.”
“If you’re stuck in a lease you can barely afford, remember that renting is temporary,” concludes Bordo. “When your lease ends, you can find another rental. People who are locked into expensive mortgages aren’t so lucky! While I can’t promise drastically lower rents anytime soon, all signs point to a continued flat rent forecast (and maybe even a slight decline) due to continued inflation, new rental inventory, and slowing household formation.”
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