Are you living with your family but considering a move into your first apartment? According to U.S. Census Bureau data from 2021, one of every three adults ages 18 to 34 resides in their parents’ home. Before moving, do your research and ensure your finances are in order.
Key Takeaways
- Renters usually require savings upfront to cover an initial payment for the first month’s rent, the last month’s rent, and a security deposit.
- The 30% rule is a guideline where renters spend a maximum of 30% of their gross monthly income on rent.
- A lease details the rental cost, timeline, utility cost, and payment due date.
Can You Afford to Move?
Although you may feel ready to get out on your own, put your finances in order first. Real estate websites and rental listings show how much you’ll pay in the areas you’d like to live.
Housing guidelines suggest you shouldn’t pay more than 30% of your gross salary for rent. If you earn $60,000 per year, you should look for apartments that cost about $1,500 per month. Finding a roommate can help reduce your cost. Besides rent, calculate your other monthly expenses like:
- Car loan payments and insurance
- Credit card payments
- Student loans
- Gas or public transportation costs
- Rental insurance
- Cell phone
- Online subscriptions
- Utilities such as electricity or water
- Groceries
Finding a Home
Once you have set some parameters for what you can afford, it’s time to start looking for a place. Search real estate websites, visit neighborhoods, and consider working with a local realtor. Many rental properties and landlords require renters to have a first, last, and security deposit equal to one month’s rent to sign a lease. There may be additional fees for connecting your utilities or wifi.
Reviewing a Lease
Whether you decide to rent month-to-month or sign a year-long lease, be sure to read what you are agreeing to carefully. The lease should include:
- Monthly rent
- Due date
- Lease terms
- Whether the renter or landlord pays utilities
- Pet rules
A lease should be provided in writing with a signed copy for your records. Some rentals may use tenancy-at-will, a property tenure that can be terminated by either the tenant or the owner/landlord. It exists without a contract or lease and usually does not specify the duration of a tenant’s rental or the exchange of payment.
Moving Day
Your first apartment will not likely have all the amenities you may be used to, and you’ll probably have to be resourceful and use what you have. Family and friends may be able to provide used furniture and even help you move. Planning to keep your kitchen well stocked with things you like and learning to cook will help you stay within your budget.
How Can I Prepare a Budget?
Are your monthly expenses higher than your income? Is there anything in there you could live without or pay less for? Usually, the answer is “yes,” and if you look critically at how you spend your money, you will likely be able to trim your expenses so that they match up with your income, or better yet, so that you have some money left over each month to save in case of an emergency.
Why Do I Need Renters Insurance?
Some rental properties will even make you purchase it as part of the lease agreement. Rental insurance is relatively affordable and covers damage from fire or theft. It will also protect you from liability if you cause the damage yourself.
What Resources Will Help Me Locate an Apartment or Rental Property?
Exploring real estate and apartment complex websites will help narrow your search. Brokers and real estate agents that know the local market can be knowledgeable and helpful resources but may require a fee.
The Bottom Line
The rule of thumb for affording a rental is the 30% rule, a guideline where renters spend a maximum of 30% of their monthly income before taxes on rent. Additionally, landlords commonly require an initial payment for the first month’s rent, the last month’s rent, and a security deposit. Before signing a lease, renters should ensure the paperwork details the rental cost, terms or timeline, utility cost, and payment due date.