How to Budget for Your First Apartment
There could be a number of reasons why you’re looking at renting your first apartment. You may have just graduated from college. Perhaps got your first real job. Whatever the reason, setting out on your own can be a scary experience, especially if you’re not used to managing your finances. Before you take such a big step, it is best to think about budgeting, because moving out and living on your own can be expensive. Knowing how far your money is going to go is important. You don’t want to find yourself in a situation where you can’t afford the rent. Here are some tips to make the process easier.
First, ask yourself a few questions.
Have I got enough savings to rent an apartment?
How much rent can I realistically afford?
What are going to be my regular expenses?
What is the cost of moving in?
Can You Use Your Savings?
Before you move into your own apartment, it will be a good idea if you’ve got some savings on hand. If you haven’t got any savings, you’ll need to think about personal finance. This company may have the answer. If you’ve got the time, saving will mean you’re in a better position to pay for any upfront costs. To cover your security deposit, you’ll need to have the equivalent of three months rent. You’ll also need to pay a month’s rent in advance as well as have some extra put aside for unexpected expenses.
What Can You Afford?
You might have some fancy ideas about the apartment you want to live in but are these realistic? A top of the range luxury apartment with all the bells and whistles is not going to be cheap. A rule of thumb would be to look for an apartment that costs no more than one-third of your monthly income. That way you’ll have plenty left over for all your other expenses. It’s all well and good having a gorgeous apartment, but if you can’t afford to eat or pay the utility bills, it’s not such an attractive proposition.
Living Expenses You May Have to Pay
It is possible to find apartments that include a range of different expenses in the rent. It makes things so much easier if you can find one. If you’re not lucky enough to find such an apartment, you’ll need to factor in the following living expenses:
To start with, you’ll only be able to include estimates, but once you’re up and running, you’ll be able to add more accurate figures to your budget. It is always good to try and keep utility costs to a minimum, especially if the apartment you are going for is going to push your budget to the maximum. Even if you are already renting a property with your gas, electricity, and energy already set up, you may still benefit from visiting a comparison site like https://www.simplyswitch.com/ to ensure you are getting the best deal for your budget.
When you take a tour of any prospective apartments, take a moment to ask about the bills. It’s highly likely they’ll be able to give you a better idea of cost. It could also be that the person who rents the apartment offers packages for certain things such as cable, internet and the running cost of the home security camera for apartment complexes in that area to ensure you and your belongings are always safe. It will save you the trouble of contacting the utility companies yourself. There are a number of other common fees you might find your landlord charges. For example:
Not every apartment you look at will have these additional charges, so it is worth asking about them when you view it.
When you look at different apartments, you might be confident in being able to afford the monthly rent. However, upfront costs when first moving in will significantly add to the bill in the beginning. Moving-in costs you can expect to pay include:
Security deposit: Generally, this is one month’s rent. However, if you’re using a broker a further month’s rent, sometimes even two, may be required. This is in addition to the first month’s rent you have to pay. If your monthly rent is $1,000 for example, be prepared to pay as much as $4,000 in advance. Quite an expense before you get your foot over the threshold. Also, remember that this deposit will be kept by the landlord if any damage is found when your lease is up.
Pet Deposit: If you can’t bear to leave Fido at home, or you decide you want some four-legged company, you may be charged a deposit for them as well. It won’t be as much as your monthly rent, but you will need to budget for it.
Renters Insurance: Before you move into your lovely new apartment you may be required to provide proof of your insurance. Even if this isn’t the case, it would be a wise move to make sure your belongings are insured. It won’t be a huge expense, somewhere around $10-$20 per month.
Utility deposit: If you’ve never had utilities in your name before, you may be required to pay a deposit. It’s usually around $70-$150. As long as you pay your utilities on time, it will be refunded.
Administration fees: The management company that owns the apartment block will need to run security and credit checks on you before you can be accepted as a tenant. There is usually an administration fee of around $100 associated with this. A private landlord may charge less in administration fees, or you may not be charged them at all.
How to Save Money When First Renting an Apartment
If you’ve done your sums and it doesn’t look like you’re going to be able to afford to move, there are a few things you can do to save money. The first is to think about where you want to live and what type of accommodation is going to suit you. A studio or basement apartment will be cheaper than one with one or two bedrooms. Renting a whole house is going to be more expensive again. A city center location is going to be costlier than somewhere in the suburbs. If you choose somewhere far out of town, you’ll then have to figure transport costs into your budget. Can you pare down any of your expenses? Is cable really necessary? Can you do without your Netflix fix?
When you first look at moving into a new apartment, there are many things you have to consider. Do your numbers right and ask all the important questions and before you know it, you’ll be living the life in your very own home. Once you’ve moved in, make sure you make a list of local contractors in case of emergencies, for example, if you’re in Toronto visit absolutedp.com.