by Stephanie Cooper, Client Services Associate
For over 6 months, I’ve been on the hunt for an apartment to rent in South Florida, and have learned firsthand how challenging this rental market truly is for millennials looking for an affordable place to live.
You’ve probably already read that rental prices across the nation are steadily increasing, and South Florida is certainly no exception. Miami-Dade and Broward County both made the top 10 list of least affordable home rental markets, according to a study by RealtyTrac.
“Landlords keep cranking up rents, with annual increases far outpacing price growth elsewhere in the economy,” says Ruth Mantell, writing for MarketWatch. The US Labor Department reported that rents in May were up 3.5% from a year earlier.
So how do South Floridians, especially millennials, find an affordable place to live?
I can’t tell you how many times I’ve had this discussion with other young professionals starting out in their careers, so here are a few tips on how millennials can master the rental market and manage increasing housing costs:
- Be ready to act fast: If you have your eye set on a new place that just came on the market, act fast! Rentals that are listed today can be under contract tomorrow.
- Make a budget: Know your monthly bills and then add in your estimated monthly rent and utilities. Make sure you leave enough room in your budget for discretionary spending and savings, like a Roth IRA, your workplace 401(k), and emergency savings. If you find your budget doesn’t make the cut, consider the next tip…
- Find a roommate who has the same financial goals as you: Splitting the rent 2 or 3 ways is more manageable than affording it on your own. However, make sure the people you live with are financially responsible and have steady income. The last thing you want is a feud with your roommate or worse, your credit score to be affected because someone didn’t pay their share of the rent.
- Expand your location horizons: Set on a specific neighborhood? Try looking outside your target zone, as the extra miles you drive may be worth it. For example, in our area, rentals in Deerfield Beach and Boynton Beach are slightly cheaper than Boca Raton or Delray Beach, so having a larger search zone can save you money.
- Ditch the cable: Millions of Americans each year are cancelling their fancy cable subscriptions and signing up for monthly services like Netflix and Hulu. This will not only save you the aggravation of fighting with the cable provider, but also significantly lower your monthly expenses.
- Know when to use an agent: As the renter, using a real estate agent does not cost you anything. Agents often have access to listings that aren’t posted on sites like Zillow.com or Realtor.com; they can also set up custom searches based on your preferences and you’ll receive automatic notifications when a new listing is available in your area. Agents also negotiate with the broker, show you the listings, prepare the lease contracts and run your background and credit checks for you.
- Be prepared for other upfront fees: Expect to come up with first, last and security before moving in, which equals 3 times your monthly rent amount. If you are moving into a neighborhood with a homeowners or condo association, it may take up to 30 days to be approved by the board; most associations also require each tenant to pay for a background check (typically about $150+ per tenant) and application fee. The landlord may also request a separate background and credit check at an additional cost, which your realtor can run for you. If you do not have prior rental history, be prepared to hand over 3+ months of pay stubs. Many places have pet restrictions and most landlords require you pay a one-time pet fee upfront (usually about $300).