How to Save Money on Rent – Lower Your Costs of Living
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Housing expenses are the largest monthly expense most of us pay each month. Whether you own a home or rent, paying for housing can take a considerable amount of your budget. The cost of housing is up 5.7% year over year (according to the Consumer Price Index), and a recent survey from Freddie Mac shows that 60% of renters have seen their housing costs go up over the past year — yet only 38% saw their wages increase over the same period.
To make matters worse for renters, roughly 20% are likely to miss a rent payment due to the steep rent costs.
The rising rent crisis is causing further economic instability in America when inflation remains at record-high levels, making everything a little less affordable for Americans, from the milk you buy at the store to the gas you put in your car.
With rent prices rising and more Americans locked out of buying a home as home prices and mortgage rates remain high, many are looking for ways to reduce their rent bill. While there’s not a one-size-fits-all solution that will work for every renter, there are some options you can consider to lower the amount you pay for rent each month.
Here’s everything you need to know about why rent prices are climbing so high and what you can do to save money and make renting a little more affordable right now.
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Why is rent so high?
Rent gradually increases each year and has done so since the real estate market crash of 2008. With more renters on the market, the rush to build more rental housing has increased steadily. The pandemic only increased the need for rental properties in 2020, with many Americans out of work and unable to pay mortgages or rent.
As a result, rent prices began rising as the demand for more rentals rose. With many Americans unable to buy housing, commercial landlords and property managers began buying buildings to charge higher rent prices. Once quarantines ended and people were allowed to return to work, the need for more rentals increased, especially this year, as mortgage rates and new housing prices skyrocketed.
Unfortunately, wages haven’t been keeping up with the increase in rental prices, making it harder for Americans to afford shelter. Inflation only adds to the mix, keeping housing costs and other essentials high. As the Fed raises rates to help tamp down on inflation, the cost of borrowing has also been raised, making it harder for Americans to access financing and locking many out of buying a home.
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How the pandemic has impacted rental prices varies widely across cities and states. Still, in general, rental rates have continued growing faster than new housing prices and wage increases.
For context, Rent.com shows that a 1-bedroom in an average US city costs 39% more than a year ago. Two-bedroom unit rent is up 38% year-over-year. Yet the wage increase remains in the single digits, improving only slightly, but not at a rate high enough to keep pace with inflation and rising rent and housing costs.
With high prices and no signs of cooling, saving money on rent is more important than ever. While there’s not much an individual can do to solve this crisis overall, there are small steps you can take to lower your rental bill (hopefully) — or other expenses — enough to provide more breathing room in your budget.
10 ways to lower your rent costs
1. Get a roommate
With the rising rent prices, if you can’t afford to live comfortably, finding a roommate may make sense. Maybe you have a sibling struggling to pay rent or a friend looking to live independently for the first time. Consult your network to see if you know anyone looking for a shared place to live.
If you don’t know anyone looking for housing, you can post your room to rent online through social media. Make sure you talk to your landlord about adding a second renter to your lease agreement — you don’t want to move someone in without your landlord’s knowledge since this could break your lease.
2. Consider signing an extended lease
If you like where you live, you may be able to negotiate a slightly lower monthly rent price by locking in a longer-term lease. Many landlords, especially private landlords, are looking for tenants who will stay in their spaces for several years.
Landlords don’t want to search for a new tenant at the end of every lease. This process is expensive and cumbersome. Because of this, you may get your landlord or property manager to agree to reduce your rent in exchange for signing a longer-term lease. This saves them the trouble of cleaning, upgrading, and relisting a home, then finding a new tenant while possibly going months without rental income.
By agreeing to a longer-term lease, say 18 to 36 months, you’re showing your landlord that you’re committed to this space and are agreeing to pay rent for several years. Your landlord may be willing to negotiate a price break for a longer lease. And even if they aren’t, you can lock in your rent price and avoid rent hikes for the duration of your term.
3. Pay more upfront, if possible
When searching for a new apartment, condo, or house to rent, you may be able to whittle down the cost of your rent by putting down a larger sum upfront. When you sign a rental lease, you typically have to provide an upfront security deposit — you get this deposit back when you leave if you keep the unit clean and in good condition — and the first month’s rent. If you choose to offer more upfront, you might be able to lower your monthly payments.
For example, let’s say your rent costs $1,500 per month, and you must put down $1,500 for your security deposit and $1,500 for your first month’s rent. If you put down an extra two months’ rent (another $3,000), this larger down payment might get your landlord to agree to reduce your rent to $1,400 or lower monthly.
This isn’t a guarantee, but even if your landlord doesn’t lower your rent rates if you can put more down up front, you’ll give yourself more wiggle room to come up with rent money.
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4. Try renter’s rewards programs and apps
Many credit cards offer rewards that can be quite lucrative when you make big purchases. While rent payments are typically the largest expense renters make each month, there’s usually no great way to earn credit card rewards when paying your rent. That’s because many private landlords do not accept credit card payments, and companies with payment portals typically charge credit card processing fees that negate earning these rewards entirely.
A couple of new rewards cards make this process a little easier — and will even send payments to your landlord in their preferred format while still helping you rack up rewards. Bilt Rewards is the most notable of these programs, which lets you earn 1x points on rent, waives transaction fees, and even sends the landlord a check if preferred while still letting you collect points on your rent. You can also boost your credit score when you pay your rent on time.
If you happen to live in a property that partners with Bilt, there are other features you can take advantage of through the program’s loyalty program. But if not, the above advantages still apply and can help you earn a little extra every time you pay your rent.
While this card touts many benefits and is marketed as a safe card designed to keep you out of debt, remember it is still a credit card. You need to be careful not to get into credit card debt with this card, or it’ll defeat the purpose of saving money on your monthly rent. This means utilizing it as a debit card (a handy option for those afraid of accumulating debt) or paying your balance in full and on-time every month.
5. Trade in your parking space or other perks
When you live in an apartment complex or condo, sometimes you pay for added perks like a close parking spot, garage, covered space, prime parking space, or other amenities. If you don’t really need these perks — or can learn to live without them easily — consider eliminating them to drop your rent price.
If you live in a city and need to secure a parking spot, you may be able to negotiate a spot that’s not quite as close or downgrade from garage to street parking to save extra money each month. Or, you may be able to find public parking nearby that’s more affordable than the parking space at your rental unit.
6. Look for a less expensive/smaller unit
Not all units are the same for anyone living in an apartment with other units. Even if you have a studio, some units in your complex may be cheaper if they have slightly less square footage, a less impressive view, or are further away from parking. Units may also be priced differently depending on which floor they’re on.
Going apartment hunting and finding a cheaper unit in a complex you like may be an option, even during your lease. If your lease is up soon, don’t be afraid to shop around and look for a unit or house that’s less expensive but comparable to your current rent.
Related: Best U.S. Cities for Renters in 2023
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7. Move to a new location
With more people working remotely than ever, where you live doesn’t have to dictate where you work. Suppose you’re one of the millions of Americans enjoying a remote working lifestyle. In that case, you may be able to get more creative with where you live, leaving an expensive city for a slightly more affordable one or opting for a more suburban or rural lifestyle in favor of lower rent and cost of living.
Of course, not everyone can just move across the country and keep their job. If you work for a company with multiple locations, research and find out if living in another spot where your job has branches is cheaper. Then talk to your manager and HR to find out about relocating and exploring what your options are.
Depending on where you decide to move, you may get a larger rental for less money.
8. Offer to work for your landlord
Living in a rental means calling your landlord when things go wrong — the washer stops working, your heating goes out, or you need basic repairs or fixes. However, if you’re handy, you may be able to use this to your advantage to negotiate rent breaks.
If you’re a plumber, handyman, electrician, or just have a lot of knowledge, you may be able to offer to fix certain problems for your landlord in exchange for rent credit. And, if you live in a complex or apartment unit, you can even offer your servicer for other rents for a further rent break. There’s no guarantee your landlord will take you up on this offer, but it never hurts to ask.
Even if you’re not particularly handy, you may be able to negotiate lower rent in exchange for providing your lawn care or maintaining the upkeep of your unit, so your landlord doesn’t have to worry about these things.
9. Talk to your property manager about reduced rent options
If your rent recently went up or you’ve experienced a loss of income, sometimes talking to your property manager or landlord is the best step. If you let them know you’re struggling to make rent but working on getting back on track, they may be more likely to work out a new payment agreement, temporarily lower your rent, or extend your rent due date.
Your landlord doesn’t have to work with you, but many will be more inclined to provide assistance to keep you in the unit — especially if your financial circumstances are just temporary and you’re in-between jobs.
10. See if you qualify for rental assistance
While there aren’t great options for rental assistance for the millions experiencing higher rent prices, many states, counties, and cities have rental assistance programs you can turn to.
These programs can often help provide you with funding temporarily or work out agreements with your landlord on your behalf. To qualify, you typically must meet strict income requirements, and every program has different eligibility guidelines.
A quick google search on rental assistance programs in your area or browsing your city’s official website can help you get started. You might also ask your landlord about rental assistance programs in your area.
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Other ways to reduce your monthly expenses
If you can’t reduce your rent, there may be other ways to help lower some of your monthly expenses. To determine your best course of action, you should look at the money you have coming in versus the money you have going out each month.
Once you know where your money is being spent, you can trim back any expenses you no longer need. For example, if most of your money goes towards food after rent, consider paring back your spending at restaurants and takeout establishments (if you eat out often). Instead, cook at home when possible.
Maybe gas is the main culprit in your spending, which is no surprise as gas prices have led to some of the highest inflation increases over the past year. Consider carpooling to work, riding your bike, or taking public transportation when possible. If you live with a spouse or roommate, it could also make sense to take one car to work, dropping the other person off on the way.
Eliminating non-essential expenses, like unwanted subscriptions (that gym membership you still pay for but never use), can also help squeeze some extra wiggle room into your budget. You can also call your utility companies and ask to be put on a budget plan for more predictable pricing — and you can try to negotiate your utility bills. You may also be able to negotiate lower rates on your cable, internet, or cell phone by switching providers or talking to your current provider.
How to boost your income to make rent more affordable
Working more may not sound appealing, but it might be your best option if you cannot lower your rent and can’t significantly reduce your expenses. Finding a side hustle with a low commitment that you can work at when needed, like driving for Uber Eats or tutoring online in your spare time, may help you better afford your rent until you can come up with a better solution.
A side hustle doesn’t have to be permanent; you may even dabble in a new industry you love. For many, side hustles turn into long-term passions. You might even make more at your side hustle than at your primary job.
Check out our options for The Best Side Hustles That Can Help You Stash Away Extra Cash.
Is it better to buy a house if you can’t afford to rent?
Whether or not now is the right time to buy a house depends largely on your financial situation and money goals. Although housing prices are higher than last year and mortgage rates have shot up significantly, buying a home rather than renting could be more affordable, depending on where you live.
In some cities, paying for a mortgage each month over rent may be less expensive. If you’re a first-time home buyer, you may also have programs to make buying a home more affordable, such as down payment or closing cost assistance.
Still, buying a home is an important decision you should weigh carefully. Consider your job security, ability to afford regular mortgage payments and surprise home repairs and expenses, and the upfront costs of buying a home — like your down payment, home inspection, agent fees, insurance, and closing costs. According to the Mortgage Reports, the average upfront costs of buying a $300,000 home can range between $15,000 and $75,000 for prospective homeowners (though this will vary by lender, location, and home loan type).
The tradeoff? If you have a fixed-rate mortgage, you’ll have a more predictable monthly payment, may save money each month, and won’t have to worry about rental evictions or price changes.
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The bottom line
Rent prices are high, and many Americans are struggling with their personal finances as inflation remains high. For many, it’s even impacting their quality of life.
Although the rent price is largely out of your control, there are some steps you can take to reduce how much you’re paying for housing each month. The best step is to talk to your landlord and find a better price or payment plan or maybe sign a longer lease for a reduced rate.
If none of these tips help, consider trimming back expenses (if possible) or temporarily taking on a side hustle to boost your income. And, if buying a home is feasible, and in line with your financial goals, it could also help you save money while providing better housing security.
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Writer
Courtney Johnston is a freelance writer, specializing in finance, travel, and health. She has written for The Chicago Tribune, Benzinga, BestReviews, Mashvisor, Fundera, MoneyGeek, and The Culture Trip. She also teaches writing instruction at the University of Indianapolis. Courtney currently resides in Indianapolis.
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