I recently just finished my apartment hunting in the DC area. While this is not the first time I look for a place, the landscape has changed in the sense that it is now a common practice for property management to charge tenants fees on top of the usual application & monthly rent.
- Monthly parking fee (Even for an unreserved parking spot)
- Monthly/yearly ammenities/facilities fee you are required to pay (Even if you don’t use their gym at all)
- Elevator reservation fee during move-in/out
To make things complicated, property management may also waive/offer discount on some of the fees in attempts to make the offer appealing.
What this boils down to is: Even if the rent is $2000 on paper, that’s not necessarily the true rent you’ll be paying every month.
Goal of the post is to help you through the process, so you are aware of the rent your apartment costs you.
Step 1: Gathering data
This is arguably the most important step of all: Make sure you gather all information needed to make an informed decisions.
Once you’ve identified couple apartments, you can schedule a tour (Preferrably within a couple of days) and gather the following information:
- How much is the rent?
- How long is the lease?
- What other fees would I be responsible for? How frequently are they charged?
- Frequency is key here, as frequency would impact the total cost of your apartment.
- Ask if the fee is a one-time fee, or if it needs to be paid again during renewal.
- Would I have to pay renter insurance? What’s the minimum coverage required?
- If it is, get a quote from your insurance agent (I’d ask your auto insurance agent as you may be qualified for discount if you have 2+ policies with them.)
- What promotions are there, and when do they expire?
- Apartment complex almost always have on-going promotions.
It’d be best if you could get them in writing. :)
Step 2: Crunching numbers
Once all data’s available, you can compute the true cost of the apartment using spreadsheet like Google Sheets.
At a high-level, the cost should be broken down into the following components:
- Monthly: Monthly recurrng items
- Each of these items will be added to your monthly cost.
- Examples: Rent, reserved parking spot, utilities
- Yearly: Items that recurs in a yearly basis
- Each of these items will be divided by 12, and the value of it would be added to your monthly cost.
- Examples: Renter insurance, facilities fee
- One-time: Items that are charged one time and would never be charged again.
- Each of these items will be divided by the duration you plan to stay in the apartment, and the value of it would be added to your monthly cost.
- Examples: Application fee, move-in fee
Once you summed them up, you’ll be able to figure out the true cost of each apartment.
Here’s a link to the spreadsheet I used for this exercise: https://docs.google.com/spreadsheets/d/14kU93zwied6Wmmar4nVJjbb4Ir3AJfEMFBy2EUDNtB8/edit?usp=sharing
Step 3: Negotiation
Once you’ve toured all the apartment and crunched the numbers, you should have an idea on:
- What the current reasonable rate is in the area
- Your favorite place(s) to live
Before you go ahead and sign the lease, repeat after me:
|The fees are there to be waived.|
With these information at hand, call back to your favorite(s), let them know about what you found about their competitors, and see what they could do to reduce the cost a bit more - Usually, they will offer to waive the application or facilities fee.
Remember - Don’t sign anything just yet. Always negotiate.
Hope the guide (and the spreadsheet) above helps you as you are doing your apartment hunt. Question? Ping me at @simplebudgetio!