Owning a home has always been a big dream for many Americans. But rising home prices coupled with tough economic times have made it more difficult to achieve. According to a recent study, although 88% of American consumers prefer to own rather than rent, close to 50% of renters worry they'll never afford to own a home. And one of their biggest barriers is down payments.
This is unfortunate since the majority of us depend on home equity as a source of wealth as compared to wealthy families who own other assets like bonds and stocks. But all is not lost.
If you're one of them, here is what you can do to save for a down payment while renting.
Get A Roommate
Many of us had roommates in college for a good reason. Apart from offering good company, roommates help save on rent.
If you want to save more money for a down payment, it may be wise to borrow a leaf from students. And this is why.
The average cost of renting a one-bedroom apartment is about $1,600 and a two-bedroom apartment is about $1,900. Getting a roommate and sharing a two-bedroom apartment can save you about $700 a month.
That's a lot of savings excluding shared expenses like groceries, toiletries, utilities, and kitchen supplies.
Negotiate When Renewing Your Lease
All landlords want to keep good tenants. This is because it costs hundreds to thousands of dollars to move you out, market, and get a new tenant.
So you might have some leverage when renewing your lease. For instance, look for similar apartments in your area and come up with a reasonable number. Inform your landlord that you may be forced to move elsewhere if they don't budge.
If you have been a good tenant, chances are they will want to keep you. While at it, know who you're dealing with.
Many renters say independent landlords are easier to negotiate with than property management companies.
Sign An Extended Lease
Apart from good tenants, landlords also want stability. Therefore, when renewing your lease, offer to sign for a year or two instead of six months at a reduced cost.
Property managers acknowledge that the longer the lease, the lower the landlord may be willing to go. They want to see a stable income.
Find An Apartment To Rent In The Winter
If you want to change apartments, it's wise to do so in winter. Landlords find it challenging to find renters at this time of the year and vacancies can last for several months. This is because many people hesitate to leave their cozy homes when it's cold and landlords with vacancies lose money.
In summer, on the other hand, the demand for houses increases. So look for apartments to rent in the winter and sweeten the deal by offering to sign an extended lease that ends in summer. This ensures the house hits the market when the demand is high.
Since the landlord enjoys some stability when the market is slow, they may be willing to reduce your rent.
Give Up Or Rent Out Your Parking Space
Don't have a car? You don't need that parking space. But you can use it to make or save some money.
First, offer to give up your parking space for discounted rent. Property managers or landlords may be able to sell it to another tenant who needs extra parking space.
If that doesn't work, consider renting it out. Fortunately, there are many platforms, such as SpotHero, Parking Cupid, and CurbFlip, which can help you do just that.
Offer To Work For Your Landlord
Each time something breaks down, landlords have to hire someone to fix it. So if you're handy, you can offer to do repairs in exchange for a reduction on rent.
If you don't know your way around things, don't be discouraged. You don't need to be a certified plumber to trim hedges or mow a lawn. Good luck!