Renters pay more these days – and many are breaking budgets just to meet housing costs.
No matter where you live, there’s a good chance rent is one of your biggest monthly expenses. And if your lease is about to expire, you may need to prepare for increased housing costs.
CoreLogic reports that in September, US rents were up 10.2% nationally from the previous year. So, if your lease expires in the next few months, your landlord can try to increase your rent. If you’re worried about this happening, here are some essential steps you can take.
1. See how much increase you can afford
Maybe you are currently spending $ 1,000 a month on rent, and you are confident that your landlord will increase that amount to $ 1,100 once your lease expires. If this is an amount you can afford to spend, you might not need to panic (even if you don’t. to want to see your rent go up.)
Take a look at your budget to see how much leeway you have. If you get a raise in the new year but your lease expires in February, your higher salary may take effect before your housing costs go up, making a rent increase manageable.
It also wouldn’t hurt to see what your savings account looks like. If you can’t really afford a rent increase to match your income, but you like where you live and don’t want to move, then dipping into your savings a little bit might not be unreasonable. .
Generally, your income should cover your living expenses. But if staying in your home after a rent increase likely means maximizing your paycheck and ending up running out of $ 20 or $ 30 each month, you can save money if you have several thousand dollars in reserve.
Right now, rents are going up everywhere, but they could go down in the future. So if you have to dip into your savings to spend, say, next year, it’s not a terrible thing if the money is there and you have plenty of it left for emergencies.
2. Talk to your landlord before getting a new lease
Your landlord may intend to increase your rent. But if you make it clear that this is something you really can’t afford, your landlord might reconsider their decision, especially if you’re a respectful tenant who has been paying rent on time on a regular basis for a year or more.
Your landlord may also be willing to negotiate the amount of your rent increase. Suppose your landlord’s plan is to increase your rent by $ 60 per month. If you explain that your salary just can’t cover this, your landlord can agree to a $ 30 raise instead.
3. Examine your moving options
If you’re confident that your rent will go up in the short term to the point that you can’t afford it, it’s time to start looking for other rentals. Moving to another neighborhood may help you land an affordable lease. Or you may need to consider downsizing to a smaller living space.
However, moving comes at a cost – or at least there may be some – so you’ll need to factor that into your plans as well. If your rent goes up by $ 50 per month, you will spend $ 600 to stay in your house for 12 months. If the movers charge you $ 600 to move your belongings, you might as well stay put if you love your current home and can find a way to recoup that extra money – perhaps by getting a side business.
That said, if you have little furniture and helpful friends with larger vehicles, you may be able to get around for free. Take the time to see what options you have.
Soaring rental prices could weigh on many people whose leases are expiring, especially as daily costs like groceries and gasoline are also on the rise. If you think you’re ready for a rent increase, follow these steps to craft a game plan and minimize that blow.