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10 Surprisingly Easy Ways To Save Money While Renting

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Deal Score+89

With inflation jacking up the price of groceries, gasoline and other items, almost everything has become more expensive today – and rent is no exception.

According to the latest Realtor Rental Report, the median rent in the 50 largest U.S. cities has hit a new high for 17 consecutive months and is currently hovering at $1,879.

With numbers like that, finding ways to save money while renting – buying a house, paying for a vacation or funding other life goals – can seem like a daunting exercise in self-deprivation. But experts insist that today’s renters can still build up some cash reserves without feeling overwhelmed. It all comes down to setting your priorities and letting go of the rest.

Renters only need to focus their search on what they need, and perhaps just as importantly, what they can live without,” says Danielle Hale, chief economist for Realtors.

If you’re facing high rents but still want to build wealth, try these smart strategies. You might be surprised at how quickly you can build up the nest egg you need.

1. Pay your rent with a cash-back credit card

Ever heard of renters “just throwing money away on rent”? One way to start earning some money back is to pay your rent with a credit card so you can earn cash back or rewards that can be converted to available benefits.

“Many of my rental clients pay their rent automatically with their cards to accumulate rewards points,” says Nicole Beauchamp, an associate broker with Engels & Völkers.

But be careful. There are some caveats, Beauchamp says. Some rental systems charge extra fees for paying rent with credit and debit cards, so you’ll want to read the terms. Also, you must commit to paying your credit card balance in full each month. Otherwise, it defeats the purpose because you won’t save anything if you carry a balance and get charged interest on the rent.

2. Ask if you can use an alternative security deposit

In addition to paying the first and last month’s rent, most tenants are required to pay a deposit – this is to cover any repairs the landlord may need to make in case the tenant leaves the place in a mess when they move out. But there is another (less expensive) option: deposit insurance, for which you pay a monthly premium to protect the rent from any damage.

See if your landlord offers security deposit alternatives like Rhino, as these services allow you to pay a low monthly fee to avoid paying a potentially large non-refundable security deposit up front. This keeps more cash in your pocket so you can save money when expenses like weddings or home purchases come up.

3. Try hosting or house hacking

Do you have extra space in your rental property, even a basement or garage? Then this is an untapped opportunity to earn cash.

“Renters can save money on rent by house hacking, which includes short-term rentals of extra bedrooms or storage space in a cab garage or basement, for example,” says Denise Supplee, co-founder of SparkRental.” While the term is more commonly used when buying a home, it can be done when renting as well, as long as the proper permits are in place.”

However, Sparks stresses that the most important task is to first make sure that renting your space complies with the lease and any local regulations.

If the idea appeals to you, you might also want to look into a “landlord-to-landlord” rental program like Loftium. How it works. Loftium allows renters to save up for a down payment on the home they are in by hosting guests in a separate area or suite. Over time, these renters may save up enough money to buy the home they are renting.

4. Shop around for a more affordable rental

If your rent is high, it may just be time to see if you can find a cheaper rent elsewhere that works for you. This is especially true if your rental has amenities that you don’t really use and that may make your current rent higher than it has to be.

“Ask yourself. Do you need to rent the newest apartment on the best floor with the best view?” says Michael Leary, head of advisory and planning for Wells Fargo Wealth and Investment Management.” Renting an older apartment without a view on a less desirable floor may save you a small fortune.”

While giving up a luxury condo with all the amenities and whistles may feel like a sacrifice, tightening up a bit now can pay off big later.

“By giving up your dream apartment, you can save and invest the extra money,” explains Liersch.

5. Work remotely? Move to where rents are cheap

The rise of remote working may allow many of us to move further away from the office, and if you can relocate from the trendy downtown area, you can save a significant amount of money on rent.

How much can you save? In the year leading up to the pandemic, urban rentals were on average 12% more expensive than suburban rentals, with the gap even greater in some large cities. During the pandemic, prices for living in the “hottest” areas dropped to 4 percent, but have now rebounded to 5.8 percent and are steadily climbing.

“If you can’t stand the thought of leaving downtown, it won’t cost you as much to stay here as it used to,” Hale said.” But moving to the suburbs can still save you a lot of money.”

If you’re more flexible, consider moving to a less affordable city altogether.

“The five most expensive markets in the top 50 have rents that are 2.5 times higher than the five most affordable markets, highlighting the impact of location on the cost of renting,” Hale said.

6. Find a roommate

Living alone can really take its toll on you. An example of this. According to the Realtor.com rental report, rents for studio units continue to grow at a faster rate than one- and two-bedroom rents, especially in large urban areas.

“Getting a roommate is another way to save because sharing a two-bedroom isn’t as expensive as renting two separate one-bedrooms or even a studio,” Hale said.

Having a roommate means you’ll also benefit from sharing utilities, Internet, cable and other costs.

7. Think small

While having extra space or rooms can feel luxurious, it can also stretch your budget. Do you really need a lot of space, or is it a necessity?

“Not only do smaller apartments or homes typically have lower rents, they also have lower furniture, heating and cooling costs,” Liersch says.

Also consider downsizing from what you have as a way to save money.

“Even though studio rents are now growing faster than one- and two-bedroom rents, they’re still cheaper than larger units,” Hale says.” So giving up a bedroom that you won’t use all the time can help you save.”

8. Keep an eye on your utility usage

No, we’re not saying you need to sweat in the summer and freeze in the winter. However, turning the temperature up or down a few degrees can actually be beneficial, especially since the Bureau of Labor Statistics found that the average American household spent $4,158 on utilities in 2020.

“Be mindful of your utilities,” says Nate Smith, vice president of marketing for Homie Loans.” Being where you can save on air conditioning or heating goes a long way toward helping your budget and helps you get a good sense of what a bigger place might look like.”

This is also true if you’re renting a house rather than an apartment.

“If you’re renting a single-family home, utilities can be quite expensive and a shock for people moving from an apartment,” says Yifan Zhang, CEO of Loftium.” Some cities allow renters to choose lower-cost, smaller packages for things like trash, composting and recycling, and you can also invest in smart sensors to keep your utility bills low.”

9. Eliminate debt with free financial counseling

If you have a high balance on your credit card, that means you’re paying interest that can really eat into your savings. But help is out there, and it’s often free. For example, the National Foundation for Credit Counseling offers free counseling to help reduce debt, and counselors will develop a game plan to help you take control of your finances.

10. Enter a rental sweepstakes

There are now sweepstakes where you can enter and win almost anything – free sports tickets, a free full vacation, and yes, even free rentals! It’s a great opportunity. In fact, Realtors just launched their first rental sweepstakes where one person (chosen at random) will receive a free month of rent (up to $2,500 cash value) anywhere in the U.S. All you have to do is submit your name and email to enter. Who knows? You might get lucky and win! (No purchase required. (See official rules).

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