From tuition, book costs, and dining, the cost of being a college student is not cheap. With rising housing costs, renting an apartment for the first time adds to this list of challenging finances.
The U.S housing shortage has caused the demand for rental apartments to soar, and the cost of living to increase as well. According to a national rent report by Zumper, the cost of a one-bedroom apartment has increased by 2.5% in 2022 alone, averaging at $1,200 for rent. For college students, these increasing rents make it difficult to find housing on top of managing all their other financial responsibilities.
In a 2021 survey by Hope Center for College, out of 195,000 students, 43% of respondents attending a four-year university reported experiencing housing insecurity, and 53% of students at a two-year university. The most common factors contributing to these numbers were the inability to pay rent, mortgage, or utility bills. On top of struggling to pay rent, the housing search has become more challenging as well. According to USA Today, 30% of students struggled to find housing weeks before classes in 2021.
Though the search might be daunting, there are steps you can take to make the rental process for your first college apartment easier. Here is a guide to renting your first apartment, with tips from real estate experts on everything from budgeting and negotiating to reading the fine print on your lease.
Establishing a budget
Before starting the search for your first apartment, it is important to understand how much you can afford. To establish a budget, you must take into account the other fees you are paying outside of rent, such as tuition or a dining plan. Your budget should also account for costs associated with a lease, such as the added expense of utility fees not included in your rent.
Additionally, when signing a lease, more often than not, you’ll have to pay an application fee and a security deposit. Application fees are a one-time payment that allows the landlord to run background checks, credit checks, and other fees. On average, an application fee is between $40 to $100. A security deposit is an additional fee, usually equal to one month’s rent, that acts as insurance if you damage the apartment or miss a monthly payment. They are often refundable if you didn’t violate any premises in a lease contract.
Taking all of these factors into consideration can be overwhelming, but there are applications out there to help you, such as RentCafe, which takes your income, location, and debts to give you an amount that you can afford. There are also tricks that make navigating your expenses easier, such as the 50-30-20 rule. This rule allocates money based on different categories: 50% being needs, such as rent and utilities, 30% being wants like eating out, and 20% being savings.
Once you have narrowed down a budget for rent, search for apartments in the area that fit your financial needs. Vicky Noufal, an associate broker at Platinum Group Real Estate, tells Her Campus, “You can’t go beyond that budget at any cost. When you notice that the rent in your area exceeds the monthly budget, you should think of other solutions which may include living farther away from the campus, finding a roommate, etc.”
Finding a guarantor
Most college students cannot take on all the expenses on their own, so a family member or friend will often help pay for their rent as a guarantor. The cost of renting has increasingly been overpowering student loan allowance, according to the Guardian, so the influx of a mandatory guarantor is becoming a reality. Guarantors are responsible for any payments that a tenant, aka you, cannot pay. They are a way for landlords to ensure rent is being paid and assist college students who don’t have the financial means to pay it.
Typically, guarantors must make an income of 80 to 100 times the monthly rent to guarantee they meet the financial requirements of the apartment, but this differs from city to city. If you do not have a family member or friend that can fulfill the position of a guarantor, there are third-party guarantor services that can assist you, such as The Guarantors and The Insurent.
Negotiating a rental price
Depending on whether you’re living close to campus or farther away, or with roommates or by yourself, the rent varies. Negotiating helps get more bang for your buck in those crowded college cities. To make a negotiation appealing to a landlord, consider what you would be able to provide for them. For example, if you can pay multiple months’ rent upfront, the landlord might be willing to give you a discount in lieu of no late payments.
Cristina Cason, a real estate investor, tells Her Campus, “If you find an apartment that best suits your needs, you can pay upfront without negotiating a lot. As a result, the landlord may also believe you’re the best applicant because you are paying on the spot.” Also, you could ask them to drop the rent by offering to sign for a longer lease, such as an 18-month rather than a 12-month.
Before negotiating, do your research. Look at other apartments in the area and see how their rent compares to the desired apartment you are considering. Negotiating will not always work, so it’s important to have backup apartment options that do fit your budget.
Asking the right questions
Signing a lease is a big commitment, so before signing, make sure to ask questions to avoid any pitfalls. Important questions to ask include:
- Are utilities included? Furthermore, what amenities are included in the rent?
- How long is the lease and how much will I pay each month?
- What are the penalties for a late payment?
- What is the guest policy?
- Can I paint the apartment?
- How much is the security deposit and is it refundable?
Little questions like these ensure you understand what you’re getting out of the apartment and what the landlord expects of you. It can also be helpful to ask past residents what their experience was like living in the apartment or apartment complex.
Reading over the lease
Important questions can be answered by reading carefully over the lease. CNBC recommends reading over a lease at least twice. Often, the lease will tell you what happens if you pay your rent late, and include clauses that prevent you from subletting, or clauses that explain the guest policy. Understanding the lease prevents any scams in the future, and as a first-time apartment renter, it helps you understand the rental process for future apartments.
In an Apartment List Survey, researchers found that renters aged 18-24 were more likely to experience rental fraud, and out of 1,000 renters, 7.2% of young renters signed a scam lease. Two of the most common types of rental fraud are missing amenities that were outlined in the lease, and a landlord attempting to collect application fees once a lease was already signed. If a scam were to arise, knowing what was outlined in your lease, such as amenities and fees, can help you avoid suffering the consequences of fraud.
The shift from living at home or in a dorm to living in your first apartment can be daunting, but these steps will help you navigate the ever-changing rental market. Renting your first apartment is an important time in your life, so don’t let the process take away from that. Prepare yourself through budgeting, reading leases, finding a guarantor, and asking questions, so you can focus on the more exciting parts of being an apartment resident, such as meeting your roommates or binge-shopping apartment decor.