How to Save for an Apartment

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Not sure how to save for an apartment? Well, you’ve come to the right place, friend!

In this post we’ll dig into the details of saving for an apartment:

find out what expenses to expect
learn a few tricks to save on these expenses
get a few tips for getting your rental application approved
create your own savings plan to turn all this general information into actionable steps

So let’s jump right in! Here’s how to save for an apartment.

Expenses to Expect

Step 1 in how to save for an apartment is to know what expenses to expect. Your first month’s rent won’t be your only expense! You need money for an application fee, a security deposit, maybe last month’s rent, utilities, maybe even utility deposits.

Application Fee

Unless you’re renting from a family friend or a really trusting private owner, your new potential landlord will want to run a credit and background check before approving your application. So most apartments will charge an application fee to cover the cost of those checks. Plus maybe a little extra for their time spent reviewing your application.

Expect to pay between $20 and $50 per person for the

Security Deposit

The security deposit is an amount of money you give the landlord upfront. This money is to protect the landlord in case you trash the apartment. The security deposit would then be applied to cover the cost of repairs, cleaning, etc when you leave the apartment.

If you leave the apartment in perfect condition, you get your deposit back within a few weeks after you move out.

Renters often mistakenly think that they will get their full deposit back as long as they don’t ruin the apartment. Not true!

At a minimum, the apartment will need to be professionally cleaned for the next tenants. So the landlord will likely keep some of the deposit (usually around $80-$100) for the professional cleaning. They might also need to repaint if you scuffed the walls, and professionally clean the carpets even though you didn’t completely ruin them.

So don’t be surprised to have some of your deposit withheld at the end of your lease.

Renters are also often surprised that most states allow landlords to send a bill to the former tenants for any cleaning, repainting, repairs, etc that weren’t covered by the deposit. That’s right. If you leave a mess, you may lose more than just your deposit.

Laws regarding how much landlords can charge for a security deposit vary by state. But it’s pretty standard to expect the deposit to equal one month’s rent.

You should also know that the deposit amount could be higher, even doubled, if you have rough credit or not enough credit.

First month’s rent

Your landlord will expect the first month’s payment in full on the day you move in.

But you probably won’t be moving in on the first of the month, so this can cause a little confusion.

Most apartment buildings will have you pay only for the portion between move-in day and the end of the month. If you move in on the 10th for example, you’ll only have to pay about 2/3 of your total monthly rent amount because you’re only in the apartment for 2/3 of that month.

But let’s say you move in on the 25th of the month. Then you’d really only be paying for 5 or 6 days of the first month. And that is too risky for the property owner. So they will usually make you pay for those 5 or 6 days plus all of the next month on move-in day. Then your normal 1st-of-the-month rent payments would start on the 1st of the month after the month after you moved in. You move in on April 25th, you would pay for those few days in April plus all of May on move-in day, and your normal rent payments would start June 1. Make sense?

Possibly last month’s rent

This is becoming less common since rent has gotten so expensive, but some places may still require last month’s rent paid on your move-in day.

It’s not likely, but you definitely want to check with the property manager before committing to an apartment.

Utilities

Utilities are an often-overlooked expense of getting your own apartment. Water, sewer, trash, gas, and electric all need to be considered as part of your new housing expense.

And they can be substantial. Costs vary greatly by region and usage. But they can easily cost over $100/month. Your electricity (and gas if your building uses gas instead of electric for heating) heavily depend on how much you use. So you’ll soon learn why your parents were always on you about turning off the lights!

The good news is that it’s quite common to have some utilities included in the rent amount. So pay attention to the utilities during your apartment search.

Utility deposits

It’s also possible for utility companies to charge a deposit if you don’t have a good credit score. The deposit amount would likely be around a one-month-average-cost for that utility.

Most people won’t need to pay any utility deposits, but if you have bad credit or don’t yet have any credit, you should be prepared for the possibility.

Furniture

I really thought I could live for a while with my mattress on the floor and my socks in a suitcase. That gets old fast.

Even if you plan to live uber-sparsely for a bit, you may want to at least have a long-term plan to buy some furniture. Want to know how much that will cost? I wrote a whole post on it when I moved abroad last year and had to furnish from scratch. See how much my apartment-full of IKEA furniture costs.

Tricks to Save on these Expenses

When you’re figuring out how to save for an apartment, make sure you look for ways to cut those expenses. Here are some tricks.

Get Roommates

Roommates are an obvious way to seriously save on apartment costs. The more people you’re willing to live with, the smaller your split! It might be worth getting a 4-bedroom apartment and splitting the cost with a gaggle of roommates.

Just know that there are state occupancy rules about how many people can live in an apartment. The standard rule is 2 people per bedroom plus 1 additional person. So a 1-bedroom can have up to 3 people. A 2-bedroom can have up to 5, and a 3-bedroom can have up to 7.

Ask for Your Application Fee to be Waived

If you’re looking at larger apartment buildings, especially those with several empty apartments, you may have some room to negotiate. Waiving the application fee might be an easy way for them to sweeten the deal for you.

Look for Special Rental Deals

Large apartment buildings also offer specials when they have several empty apartments. Or even if they have several scheduled move-outs for the next month.

Newly built buildings usually offer great deals, like one month free on a 12-month lease, because they have hundreds of apartments to fill. If you’re planning ahead, do a little Googling to find apartment buildings under construction in your area and see if you can be an early bird o a new building. The units will be a little more expensive, but it might be worth it.

Word of warning: You rent will likely go up at the end of your lease once the building is full. So make sure you’re 1) willing to move in a year, or 2) willing and able to pay more for that apartment the 2nd year.

Work On-Site

If you haven’t decided on a career path yet, consider property management. There are several positions available at large apartment buildings, you can make pretty good money, and you get a big discount on rent if you live on-site.

Here are some of the most common positions to be filled in property management:

Leasing agent: Tour potential tenants around the property, drafted leases, post ads online, help with client satisfaction
Resident Coordinator: Make sure your residents are well taken care of and happy. Schedule work orders and plan resident events
Operations Manager: Manage day-to-day property operations including rent collection, accounts payable, and resident issues that get escalated
Property Manager: Oversee the property’s staff and measure big-picture property performance
Maintenance Tech: Take care of the work orders for the apartments and around the building’s common areas.
Maintenance Supervisor: Oversee the maintenance staff, schedule vendors for turning over apartments between tenants.

If you want more info on careers in property management, I can help! I was in luxury apartment management for several years, and I still manage my own rental properties. So feel free to leave a comment or Contact Us with any questions 🙂

Tips to Help Get Your Rental Application Approved

As I just mentioned, I have several years experience in property management, so I can tell you exactly what landlords and property managers are looking for when they review your rental application.

1. Prove Your Ability to Pay the Rent

You need to show proof that you make enough money to cover the rent plus all your other living expenses. This usually means showing pay-stubs from your last 2 months of work. And it usually means that your monthly gross income (income before taxes are taken out) must be 2.5x the rent amount. So if you want to rent an $800 apartment, your gross income needs to be at least $2,000/month.

If you don’t make enough, you should really find a less expensive apartment. You’re just making life harder than it needs to be by stretching yourself every month to cover rent.

If you just can’t prove that you make enough, maybe you’re a freelancer who had a slow month, but normally makes more than your current bank statements show, you can get a co-signer. Your co-signer needs to make a lot more money though. The landlord needs to make sure a co-signer can cover all their own expenses plus your rent if necessary. So they usually need to make 5x the rent.

2. Show Off Your Good Credit

We’ve already talked about how bad credit could increase the required deposit. But it can also get your rental application denied. So can not having enough credit.

This is especially true in apartment buildings (as opposed to renting a single house directly from its owner). See, the owners and property managers for apartment buildings must comply with fair housing laws to make sure there is no possible discrimination based on race, creed, sex, religion, etc. So they must follow standard protocol with very little wiggle room.

Imagine if they approved your bad credit because you appear trustworthy, but they denied bad credit for someone of another race who, for whatever reason, the property manager didn’t get a trustworthy vibe from. Even if discrimination wasn’t the intent, it could be construed as discrimination. The staff just can’t risk that.

So what can you do if you have no credit or bad credit?

Well, if you have no credit or kinda bad credit, you could get a co-signer with great credit to assume equal responsibility for the lease.

If you have really bad credit, that might not even be enough. You may need to look for a building or private owner with more relaxed credit standards. Or wait to get an apartment until you can bring up your credit score.

3. Demonstrate Good Rental History

Lastly, your new potential building might call any previous landlords/property managers to make sure you paid on time and were a good resident. Evictions will seriously hurt your chances of approval, and will could be grounds for automatic denial of your application for many properties.

If you have an eviction or other black mark on your rental history, talk to the leasing agent before you even tour the apartment. Explain the circumstances, and flat out ask if your application could be approved with that issue. They may be able to approve your application with a co-signer.

Create Your Savings Plan

Creating your own savings plan for your new apartment is as easy as 1,2,3,4.

Step 1: Estimate your expenses

Time to do some research. How much are you planning to spend on your new apartment:

application fee: __________
1st month’s rent: _________
last month’s rent: ________
security deposit: _________
utilities: _______________
utility deposits: __________
furniture: ______________
TOTAL: _______________

Step 2: Estimate how long it will take to save enough

How much money can you reasonably afford to set aside each week for your apartment?

Now divide your total estimated expenses by this amount. The result is the number of weeks until you can have enough money saved.

Does that seem too far away? Consider ways to make some money on the side. We’ve got some brilliant ideas to get you started:

Step 3 and 4: Start saving and building your credit

You should keep your apartments savings in a high-interest savings account (which you can open online if you don’t already have one – just Google “high-yield savings account” and select an account with no minimum balance and at least 1.5% interest).

The trick to savings is to set up automatic transfers. You can tell your checking account bank to automatically transfer $x to your savings account right after every payday. That way you never have to remember to save the money. And you never risk spending the money accidentally 😉

Not sure exactly how to build good credit? We have a great post to show you how to build perfect credit from scratch.

Best of luck to you and your new life in your new apartment!