How to Save for Your First Apartment (and Escape Your Parents’ Basement)

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Living on your own is blissful. Paying to live on your own? Not so much.

Renting your first place is a huge step on the path toward adulting, but if you don’t know how to save for an apartment, it can also drain your bank account and cause a bunch of headaches.

If you’re ready to make that leap to become a first-time renter, here are all the factors you need to consider so you’re financially prepared when you go apartment hunting.

What Can You Afford to Spend?

Your rent will very likely be your largest single expense each month. But you don’t want to spend more than your annual income can support.

A good rule of thumb is that your rent should be no more than a quarter to one-third of your take-home pay. For example, if you bring in $3,000 per month, you should be looking for apartments in the price range of $750 to $1,000.

If you find a great place for even less — awesome. But trying to get a place that exceeds that price threshold could put you in a financial crunch.

Potential landlords will want to verify you’re making enough money to afford rent, so you’ll typically be asked to provide pay stubs as proof of income. If you’re just starting a new job, you may be asked to provide the offer letter from your new employer that includes the salary you’ll be making.

Property managers may also look for renters who have good credit scores. A good credit score shows you have a history of paying bills on time and aren’t carrying a high debt load.  

Defaulting on your student loans, letting your cell phone bill go into collections or maxing out all your credit cards are actions that could cause a landlord to deny your rental application. Your apartment manager wants to see you’d be able to handle the financial responsibilities of renting a place on your own.

If your income isn’t high enough or your credit is less than stellar, that doesn’t mean it’s impossible to rent an apartment.

Some property managers will allow you to get someone to co-sign your lease. This would be someone, like a parent, who wouldn’t live in the unit but would be able to meet the income or credit requirements and would be on the hook for paying your rent if you aren’t able to.

Alternatively, the rental owner might ask you to provide a larger security deposit, pay an extra month’s rent upfront or pay higher rent than someone with better financial standing.

The Upfront Costs of Renting an Apartment

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Finding an apartment you can afford is only one step toward getting a place of your own. You’ll also need to save a significant sum of money upfront.

Make sure to consider these costs when searching for your new home:

Application Fee

This is the cost property managers charge you to have your rental application processed. You can expect to pay between $25 and $50, but it could be more depending on where you live.

This fee is usually nonrefundable, meaning you won’t get it back if you choose not to live there or if your rental application is denied. Make sure you tour the unit — or a model unit — before submitting an application.

Security Deposit

This is the money the landlord keeps in reserve in case you don’t pay rent or leave your apartment in an unsatisfactory condition at the end of your lease.

Your security deposit could be as low as a couple hundred dollars, or it could be the equivalent of one month’s rent. Generally, if your apartment is in good condition at the end of your lease, this deposit will be refunded back to you.

If the landlord has to fix significant damage, you might get a partial refund or none at all.

First Month’s Rent (and Possibly Last Month’s Rent)

You’ll need to have your first month’s rent upfront when you move in. Some rental property owners will also ask you to provide money to cover your last month’s rent.

If your move-in date isn’t at the beginning of the month, it’s possible your rent will be prorated for that first month, meaning you’ll only be responsible for paying a portion of that month’s rent.

Pet Fee/Deposit

If your furry friend will be living with you in your new place, you could be asked to pay an additional couple hundred dollars upfront. Some landlords will charge a flat fee, while others will have you pay a refundable deposit that you will get back at the end of your lease, provided your pet has caused no damage.

How to Calculate the Cost to Move

Moving can be an absolute pain — and we’re not just talking about the logistics of packing up your belongings or the physical labor of moving heavy boxes and furniture.

Moving comes with its own set of expenses that need to be factored into the cost of renting a new apartment.

Moving costs will vary widely depending on your situation. For instance, you may want to hire professional movers if your new apartment is a third-floor walk-up.

When asking yourself if you can afford to move, consider the following expenses:

  • Boxes and moving supplies: If you don’t have any boxes of your own or can’t borrow any, you could purchase them from businesses like U-Haul or Home Depot for $1 or $2 per box. They also sell extras like packing tape and cushioning material.
  • Moving truck: A local move with a small truck might cost you $20 to $40 plus mileage and fees. Or you could end up paying several hundred dollars for a one-way drop-off if you relocate across state lines.
  • Professional movers: You could pay as little as $25 per hour per mover for help with a local move. Or you could pay a company a couple thousand dollars to ship your belongings cross-country.

Making Your Place Feel Like Home on the Cheap

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If you’re moving into your first place, you probably don’t have a bunch of furniture. That’ll save you on moving costs (win!), but it also means you’ll face the expense of decking out your new home.

If you’re itching to fill up your apartment like a perfectly staged HGTV home, take a deep breath and practice some restraint. You’ll be dealing with enough costs as it is.

First, focus on move-in expenses like toilet paper, cleaning supplies and a shower curtain — plus pizza and beer. Then turn your attention to the basic necessities like a bed, pots, pans and maybe a table and chairs to have meals. Get the rest of what you need over time as your budget allows.

You may be able to score free (or super cheap) furniture from friends, family or sites like Craigslist or Facebook Marketplace.

Check garage sales, thrift stores, Goodwill or pawn shops for low-priced items for your new home. Retailers like Walmart, IKEA, HomeGoods and Big Lots are known for low prices, as well as online sites like Wayfair and Overstock.

Budgeting for Living Expenses

Your rent won’t be the only monthly expense you’ll face after moving into your new apartment. If you weren’t previously responsible for paying household bills, you’ll have a great deal of recurring costs to get used to.

Here are some common monthly expenses to expect:

  • Electricity
  • Gas
  • Water and sewer
  • Trash removal
  • Cable
  • Internet
  • Renter’s insurance
  • Parking

The cost of your monthly living expenses will vary, but you should plan to budget at least $200 to $300 for the above expenses. Ask your landlord if any of these costs are included as part of your rent. For example, some apartment complexes will fold water, sewer and trash services into the cost of rent.

When it comes to utilities like water and electricity, some providers may ask you to put down a deposit before services get turned on. Usually, that money is refundable.

You can also expect to pay an installation fee to set up services like cable or internet. That expense is generally nonrefundable.

If you opt for any extras — like outdoor storage or washer and dryer rental for your apartment — you’ll be paying more each month.

And in addition to that pet deposit we mentioned earlier, some landlords will charge renters as much as an extra $50 to $100 each month per pet.

When you create your budgeting worksheet, don’t forget to include a line item for an emergency fund. It’s good to set money aside each month, because the bills won’t stop if you lose your job or can’t work temporarily due to an illness or injury. Financial experts recommend having between three and six months’ living expenses in an emergency fund.

If you can’t find room in your budget for savings, you need to evaluate your income and expenses. You’ll either need to increase your income or reduce your expenses.

6 Tips for Saving Money on Renting an Apartment

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All the costs involved with renting an apartment may have you wanting to renounce the entire idea of living on your own. But don’t be discouraged. The sweet freedom of having your own space can be so worth it.

As you financially prepare yourself for your next big step, here are some money-saving apartment tips to keep in mind.

  1. Look for rental specials. Some apartment managers run specials, such as free rent for your first month.
  2. Factor in all the amenities of the apartment complex and neighboring area when choosing a place to live. Let’s say one apartment option is $900 per month and includes access to an on-site gym and is in walking distance to work and a grocery store. Another apartment costs $800 but requires you to have a car and keep paying for your gym membership. You may find the more expensive apartment to be a better deal when you look at the entire picture.
  3. Talk to your potential landlord in advance if you think you have an issue, like a poor credit score, that would cause your rental application to be denied. The landlord may show leniency. And if not, you can get confirmation that your application will be denied before wasting money on an application fee.
  1. Rent the apartment with a roommate. You can save significantly by splitting costs with a roommate (or several, in a growing trend known as coliving). Just make sure you discuss in advance who is responsible for what and establish some ground rules to maintain the peace.
  2. Do a thorough walk-through before moving into your apartment unit. Bring any existing damages or other issues you notice to the property manager’s attention. Though it may not help you save on the apartment upfront, you’re more likely to get all of your security deposit back when you move out if it’s noted that those scratches on the hardwood floor existed before you moved in.
  1. Look into public assistance options if your income can’t cover the average cost of housing. The U.S. Department of Housing and Urban Development provides resources for rental assistance programs — such as Section 8, public and privately owned subsidized housing — to make housing affordable to low-income people.

Nicole Dow is a senior writer at The Penny Hoarder. She’s lived in five different rentals over the last 10 years.