Nevertheless, buying a home is an even more unaffordable option in these expensive locations, so tenants need to get creative and find out ways to make ends meet. In this article, we’ve put together five tips on how to make renting an apartment more affordable in major cities.
Have a Look at Different Neighborhoods
Not only property prices but also rental rates vary significantly from one neighborhood to another within the same city. Let’s have a look at the San Francisco real estate market as an example. According to Mashvisor, a real estate data analytics company, the average monthly rent in the North Beach area equals “only” $3,187, while it reaches as much as $6,230 in the Noe Valley neighborhood.
This is a difference of over $3,000 a month and about double in terms of rate. This means that you can make your experience in San Francisco – as well as any other large expensive city – significantly more affordable by exploring renting options in different parts. While different neighborhoods offer widely varying conditions, lifestyles, and amenities, it is possible to find a location with reasonable rental rates that matches one’s way of living, preferences, and expectations.
Consider Locations Close to Work and Amenities
Once you have analyzed the local real estate market and located the neighborhoods with the most affordable rental rates, it is time to consider how close they are to your workplace as well as to stores, schools (if you have children), and other amenities.
Similar to rent, transportation is another considerable expense in major cities which amounts to several hundred dollars a month. By choosing a neighborhood that is within a walking distance from your job, your children’s school, grocery stores, bakeries, dry cleaners, and others, you will be able to save money from gas or public transportation each and every month. Actually how much money you will be able to save by choosing a more accessible area close to your office might make renting in a slightly more expensive neighborhood worth it.
Choose a Smaller, Less Luxurious Apartment
Rental rates in a real estate market vary not only by location but also by property type, property size, number of bedrooms, and property features and characteristics. This means that another way to make renting more affordable in an expensive location like the New York real estate market, for instance, is to go for a smaller and simpler while still comfortable apartment. After all, renting a property is just a temporary solution – unlike buying a home which tends to be a more long-term commitment. You can always try living in a cheaper rental first and switch to a more lavish one once your financial situation improves or you start a family.
Live with Roommates
Yet another way to decrease your rental cost in an expensive city without sacrificing the location or the comfort of living in a larger apartment is to look for people with whom to share the space and thus the monthly rent. If you are single or even married but don’t have children, it is worth considering the option of living with roommates. Keep in mind that this will be a very different experience from sharing a room in college, so you should not allow your college memories to prevent you from finding adult roommates to share rent early in your career. One possible place to look for reasonable, reliable roommates is your office. Chances are that at least some of your colleagues are also renting and are finding rental expenses to be ridiculously unaffordable.
The final tip on how to afford rent in expensive cities is not related to decreasing your rental expenses but actually generating more income to afford a nice rental apartment. Subleasing is how millennials – as well as other tenants – afford renting in such markets as Los Angeles, San Diego, and Boston. However, you should make sure that your lease agreement allows subletting before you start letting other tenants in your rental.
As long as it is permitted, you have two main options to choose from. First, if you have enough space that you don’t need, you can look for a long-term renter to sublet this space to. This is very similar to having a roommate except for the fact that you are fully responsible for the actions of your sublessee and for keeping the rental in a good shape.
Second, if you prefer to try this strategy for a bit without committing to a long-term contract, you can list a room on Airbnb or another short-term rental platform when you are on site or even the entire property when you go on vacation.
In this case, you will become an Airbnb host rather than a landlord. Depending on your location and local demand from tourists, you can easily make a few hundred dollars a night in this way. According to real estate market analysis, the average daily rate for a short-term rental in San Francisco equals $228, while the Airbnb occupancy rate is close to 70%. This means that renting out a room for just a few days a month can make living in expensive locations significantly more affordable.
If your education, your career, or simply your life choices are taking you to an expensive city for the next few years, you should not worry about how you will be able to afford rent. With the 5 simple tips listed above, you can make living even in the most highly-priced location affordable and enjoyable.