*Results Not Typical
Hey y’all. I’ve mentioned a few times that I moved apartments recently. It’s part of what caused my messed up posting schedule in December. Well, I wanted to explain why I moved from a great apartment to another just a few hundred feet away. Long story short… $500 per month is why!!
I’m hoping you can use my story of how I strategically looked for apartments to benefit yourself. If you rent, these are tactics I strongly urge you to consider.
(keep in mind the rents here are very high, about double what I was used to at my last two assignments for a much larger place. And nearly triple what I would’ve paid for a similarly sized place. So if I say an apartment’s price was $500 per month difference, that’s like a $150-$250 difference in a not-crazy market. Adjust your expectations for all numbers in this post accordingly)
But first an announcement: I started a Facebook group! It’s a closed group so you can talk about personal finance topics great and small to your heart’s content in a small group format. If you want to join, click here.
I moved to my current duty location in summer 2016. I’m currently in the Washington DC metropolitan area, home to approximately all of the US military bases. Okay, that’s a slight exaggeration…slight. Last I counted, there were 14 military facilities here plus a wide variety of smaller offices and the ability to do career broadening jobs in other government departments.
I’m expecting to be here for three years, although this area offers a lot of opportunity for military officers to stick around so the possibility exists for me to stay longer or come back later. Normally if I was going to be in an area that long with the possibility of coming back later, I’d seriously consider buying a house. And I did. But have you heard about the DC housing market? It’s insane!
Here’s a 772 sq ft apartment for $399,999. Don’t think that’s quite off the charts yet? That’s before the $843/month HOA fee (that’s how they trick you into thinking the price isn’t God awful).
“But that’s in the middle of the city! You could look farther out!”
That’s true. For the low low price of a 45+ minute commute, I could get this spacious 1132 sq ft condo for only $360,000. HOA fee not available.
For comparison, the first home I purchased was over 2700 sq ft for under $200,000 in a large metropolitan area. The second house (same city) was also over 2700 sq ft, just over $200,000, and included a gourmet kitchen and was located in a gated community.
To say I had sticker shock when looking at DC prices was an understatement.
I get how housing markets work. The DC market is different than other market and as an active duty military member I receive a higher housing allowance to account for that. And civilians can expect to earn a higher income for the same work than they would if they lived in, say, Albuquerque with its lower cost of living. But I didn’t want a huge chunk of my money tied up in a house, especially since I felt the market was bubbly (it hasn’t crashed…yet).
Instead I Decided To Rent
Knowing that I was going to be in the area for about three years, I had to make a few choices. Where to live, obviously. How much to spend, duh.
But something that I put a lot of thought into was how long I wanted my lease to be.
You see, I did some research online before moving to the DC area and found that it was quite popular for apartments to rent for significantly more money if you sign a lease in the warm months vs the cold months.
And in DC, we are talking about a difference of potentially hundreds of dollars per month. I wouldn’t have even considered moving if that weren’t true because moving is a pain in the you-know-what.
Tactic #1: Choose A Lease Length Strategically
Seeing as how I was arriving in the summertime, if I wanted to move in the winter I’d need to look for a lease that was about 18 months long, give or take a few months. When I was comparing apartments, I strongly favored those that had lease lengths over 15 months. Several buildings limited their leases to 12 months and while that alone wouldn’t have been enough reason not to move in, it was a consideration.
I ended up signing a lease for 18 months. That would put my lease expiration just prior to Christmas 2017. Perfect. If I loved the place and the price was right when it came time to renew the lease, I’d stay where I was. But if either (or both) of those things wasn’t true, I was prepared to move.
The apartment I moved to in summer 2016 was a bit pricey, but not too much more than nearby apartments. It was right in line with apartments of a similar age and quality in the same area, slightly ($50-$100 per month) more than similar apartments farther out, and $200-$300 per month more than apartments that were significantly lower quality.
Prepare yourself…here are the numbers.
The lease I signed in June 2016 was for a ~900 sq ft apartment (1 bed/1 bath/tiny den) for $2697 per month. Plus I have a dog, so pet rent was another $50 per month. And eventually I realized I was tired of looking at a wall of boxes in the den, so I got a storage unit for $110 per month. That meant my total monthly housing cost before adding in utilities was $2857 per month. So painful.
(don’t you judge me for the storage unit! I’d already downsized from ~2400 sq ft worth of stuff to ~1200 sq ft worth of stuff. I still have things to get rid of but that’s pretty good!)
Luckily I have my housing allowance, but because I chose the convenience of living very close to work it didn’t fully cover my housing cost and didn’t cover any of my utilities. This is very out of character for me, but hey I’ve been watching my money for a long time and it was important to me. That’s the kind of choice you get to make when you control your money instead of your money controlling you.
Tactic #2: Apartment Hunt Strategically
In September 2017, I received notification of what my new rent would be if I stayed in apartment #1. And it wasn’t pretty. Rent was projected to go up to $2787, an addition of $90 per month! That’s a 3.3% increase during the winter. The total with pet rent and storage was going to be $2947. No thanks.
This wasn’t in line with what I’d been expecting, and a quick internet search showed it wasn’t in line with what other apartments were doing. Similar apartments were renting next door for at least $200-$300 less per month.
My decision was made – I started apartment hunting.
I knew I wanted to stay within my neighborhood. It has everything I need within walking distance, including my bank, grocery stores, ample public transportation, and my office. I limited my search to half a mile in any direction, which is actually a lot of options given the urban environment I live in.
In order to make moving worth it, I wanted to save at least $200 per month (again…that seems like a crap ton but realize that’s because my rent is so high). That number was chosen not only to make up for the cost of moving, but also the hassle.
And I needed another place that would let me do at least an 18 month lease to get me through the rest of my projected assignment. The difference between a 12 month lease and an 18 month lease in the same apartment was $150 per month in some cases. The 6 month lease was even higher! I didn’t want to end up with a 12 and 6 month lease, so an 18 month lease or longer (you’ll see why later) was best.
So with the $200 goal in mind, I set my budget at $2747 all in – rent, pet rent, and storage if needed.
The Actual Search
When I was touring apartments, I did several things to maximize my good options:
- I did a lot of online research. My plan was to walk into every apartment building having already looked at every open option and its price. I wasn’t going to waste time touring apartments that didn’t fit my needs.
- I asked for apartments that had been empty for a while. By watching the websites for a few weeks, I saw that the prices dropped the longer they’d been on the market. If it met all of my needs, what did I care if it’d been empty for a while?
- I told them my budget was $300 lower than it was. Have you ever met a salesperson who heard your budget and didn’t offer options that cost more? Or one that offered you a much lower priced option than what your budget allowed? Exactly. By verbalizing a lower budget than I was comfortable spending, I had more wiggle room to find something I liked.
- This also led to several apartments being offered at lower than list price without me even asking. If I started to say “well it’s pretty close to my limit…” the leasing agents would immediately start crunching numbers. They were trying to get me to sign – if $30 less rent per month put the pen in my hand, they’d make the offer.
- This also got me into some apartments I never would have looked at otherwise. There was a nice apartment at a building I wasn’t crazy about that was only ~$1950 per month. With the pet rent and storage, I could’ve had an apartment for only ~$2100! I ended not taking it because it was a little too far and the building wasn’t what I wanted, but honestly I doubt I would’ve ever seen it if I was only looking for places in the $2300-$2700 range.
- I asked for off market options. Sometimes the website didn’t list an apartment that had just opened up. That’s actually exactly what I ended up renting. The previous tenants moved out the day before I toured and the building didn’t list apartments until all cleaning and maintenance was complete. I said I was willing to look at it before that was done and boom! Perfect apartment. This contradicts my point about finding one that’s been on the market a while, but the advantage here is the opportunity to get a deal that hasn’t been seen by others yet.
In the end, I moved into an apartment 300 feet away from apartment #1. It’s big enough that I don’t need storage. It has everything I wanted except a balcony. I also signed a 24 month lease even though I only expect to be here another 18 months. Why? Well as a military member I can legally break a lease if I get orders to move away, and the 24 month lease was a bit cheaper than the 18 month lease. If you are feeling like I cheated the company by lying, don’t. My leasing agent is the one who suggested I do this. Apparently they recommend it to all military tenants!
The final price? All in including pet rent…$2359 per month!
That’s $498 per month less than I was paying before, and $588 less than if I’d stayed in my apartment with the new raised rent! Okay, so I’m not really paying $500 per month less than I was before. Can we call $498 close enough?
Tactic #3: Figure Out The Most Valuable Way To Move
You may have noticed before that I am more “value” focused than I am “price” focused. I kept this in mind for my move.
I move a lot. It sucks. You kind of forget how bad it sucks until you are in the middle of it. Then at some point you box up your 48th box of the day at 3am and you want to kill yourself.
I also don’t love having strangers dig through all of my stuff. On a cross country move it’s worth it – but not if my new place is across the way. I could move the vast majority of my stuff myself.
I decided to make it easier but more expensive by giving myself a full month to move. Yes, I paid a whole extra month’s rent at the new place to make my life easier. Remember I was about to save almost $500 per month, so I was okay with this.
I started moving into my new apartment in mid-November. I hired movers for the big stuff, but moved everything I could fit on a large handtruck by myself. And I didn’t need to spend money on any packing materials because again – I was only moving 300 feet away.
Because of this, my moving expenses were about $350, plus the extra month’s rent of $2359, for a total moving cost of $2709. At $500 per month savings, I’d make that up in less than six months. If we consider that the raised rent at the old place would’ve been $588 per month higher, it takes less than five months.
In comparison, if I’d had movers do everything I could’ve gotten away with maybe a week of overlapping rent ($600) but the moving cost would’ve been much higher ($1500? $2000?). Having a company move me would’ve cost around $2100-$2600 – not much savings.
Amortized over the course of an 18 month lease, the maybe $400 additional I spent moving myself gave me a lot of peace of mind for only $22/month. To me the value of having a lower stress move and not having strangers destroy half of my stuff was worth paying a little more. In contrast, if I wanted to lower my average monthly cost even more I could’ve calculated the cost of moving into my savings as well.
Even if my former apartment’s rent hadn’t gone up, I was probably going to move anyway. The management was driving me crazy with a combination of constantly changing rules and an occasional lack of concern for certain elements of the property.
It’s only been a month since I’ve been living at my new place, but so far I like it a lot better. The customer service is exceeding my expectations and the layout is a bit better than my last place. It’s louder than apartment #1 because it’s on a lower floor and I hear the street noise, but that only bothers me if it gets my dog riled up so it’s okay 99% of the time.
So overall, it’s been a worthwhile move. I’ll earn back what I spent on moving costs by May 2018 and from there until I leave I’ll be in the black. Pretty great, right?
Too Long; Didn’t Read
If you want to save money on renting an apartment, try these tactics:
- Choose a lease length that will mean your next lease will be signed during your area’s slow renting season. Use the low demand to capture lower prices from landlords looking to fill empty apartments
- Apartment hunt strategically by knowing in advance exactly what you want and what you are willing to spend. Do your research to find out what’s available but don’t be afraid to ask for openings that aren’t on the website yet. Tell the leasing agent/landlord that your budget is less than your actual limit. You wouldn’t tell the car dealer your top price, right? Same rationale applies here.
- If you are moving to a new location that isn’t too far, consider whether moving yourself or hiring a company will provide more value to you. It’s a pain in the ass to move yourself. But then, so is having someone else move you and discovering you have no dishtowels anymore and you are missing the drawer to your nightstand. Moving is just a pain all around.
If you were in my shoes, would you have moved to the new apartment or stayed in the place with the higher rent to avoid moving? What are your best tips for choosing an apartment strategically?
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