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Even though the real estate market regarding home sales has seen an upside lately, rental prices remain high also. It seems like there’s no reprieve to be found in terms of pricing of homes, whether you’re renting or buying. This is particularly true in the world’s most expensive cities, where many renters and buyers have been priced out altogether.
So, what do you do if you need to find an affordable apartment in an expensive location? For example, how can you find nice, affordable apartments for rent in Toronto, New York, London, San Francisco, or any of these other pricey hotspots?
It is possible, but it also requires some work.
Set Your Budget
Before you can rent within your budget, you need to know your budget. A lot of renters will go out and start looking and ultimately get pulled into a rental that is difficult for them to afford because they really didn’t know what they could spend ahead of time.
The rule is that rent should be about 30 percent of your income, although, in some of the world’s most expensive cities, it may be more like 50 percent of your income. The U.S. Census Bureau has an even more modest estimate, suggesting rent should cost no more than 20 percent of your monthly income.
Regardless, you need to sit down and take a long, hard look at your income and your other expenses and see what you can make work without feeling like your entire paycheck is going to your rent every month.
If you’re worried about the cost of rent, one of the best ways to get the most bang for your buck is to go outside the city center. If you live in a city with public transportation, this is even better. If not, you need to think about transportation costs and balance that with what you’ll save by living further outside of the metro area.
It’s also important if price is your primary concern that you don’t limit yourself to one neighborhood. To find the best deals, you need to be flexible with your location.
People often see new construction buildings going up in their area and think they could never afford them, but this is actually where the prices tend to be lower. A new building’s primary objective is to fill up units as quickly as possible, so they’ll often offer discounts and more negotiation options for the newest renters.
You might think that a building with amenities is out of your budget, but look at what you could save by taking advantage of the said amenities. For example, if you find an apartment in a building with a gym, you could save on the monthly cost of your gym membership. Would that be worth it to you? Or is the cost too minimal to make a difference?
Maybe a building offers free Wi-Fi or cable, and that could be an incentive to go that route and save money in other areas.
It is possible to find a rental you can afford, even in an expensive city, but you need to know what’s within your budget and give yourself enough time to do a full search.