Rent prices are up, and for some people, that may be a problem.
For individuals who can't afford to buy a home, renting is the next best option. But just as home prices have soared in the course of the pandemic, rent prices have risen a lot as well.
The average rent price rose 2.3% in May compared to April, reports Zillow, and it now sits at $1,747 a month. That's the largest monthly increase since 2015. It also represents a 5.4% uptick from May of 2020.
The problem is that a lot of people have seen their income take a hit during the pandemic, so they can't afford to spend a small fortune on rent. And even if you didn't experience income loss, if you're a lower earner or are on a tight budget, $1,747 may be way out of reach.
Now to be fair, $1,747 is a national average, and it's no secret that some parts of the country are more expensive to live in than others. But if your rent payments are so high that you're having trouble keeping up with your other bills, here are some steps to consider taking.
If you don't have a lot of personal effects and can move affordably, then downsizing your living space could be a good solution to unaffordable rent. This assumes that you don't want to relocate to a less expensive part of the country. If you want to stay put, dumping square footage could result in a much lower monthly rent payment. And then you can upsize again once your financial situation improves or your income increases.
2. Find a roommate
If you live solo, finding someone to split the cost of your rent could work wonders for your budget. Of course, not every living space is conducive to getting a roommate. If you live in a cramped studio apartment, you may not have enough room to squeeze a pet hamster into the corner, let alone another person. But if there's ample space, then sharing your home may be a worthwhile sacrifice to make for a while.
3. Barter with your landlord
If you're handy or good with numbers, your landlord may be able to use your services, whether it's to fix things up around the building or help with the bookkeeping. If you're willing to put in the time, you may be able to reach an agreement where you offer up a needed service in exchange for a reduction in your rent.
4. Look at buying
In some markets, it's more affordable to pay a mortgage on a home than to rent. If you have money on hand for a down payment, or if you're eligible for a no–down payment VA loan or a low–down payment FHA loan, then buying could actually be the more economical option. First you'll need to check what home prices look like and what interest rate you qualify for on a mortgage to see if buying is feasible and makes more financial sense than renting. But it does pay to run those numbers.
Home values are up across the board, so it's not surprising that rent prices are following suit. But if you can't afford your rent, think about your alternatives. It's a better bet than continuing to pay all that money for a roof over your head and putting yourself at risk of debt.
Tired of renting and ready to buy? See The Ascent's guide on how much house you can afford.
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