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Reassessing Finances When Your Rent Goes Up

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No one likes the sound of rent prices going up. In recent years alone, the price of rent has inflated so much that renters have been left living paycheck to paycheck, moving in with family, or scrapping renting altogether to deal with the skyrocketing costs.

If your landlord is considering a rent increase, remember that you have rights as a tenant. In the case that you have a fixed-term lease, your landlord cannot raise the rent until your contract is through. If you rent on a month-to-month basis, your landlord can increase the rent after your month is up, but in both the long-term and short-term rental options, they must give you a 30-day written notice of the increase.

Dealing with a rent increase can cause unnecessary stress and worry in your life, but reassessing your finances can give you a clear idea of what steps you can take to help you live comfortably. Here are five tips to get you started!

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Why is Your Rent Increasing?

Prior to the COVID-19 pandemic, the prices of rent were increasing at a small, steady rate over several years, but when the nation shut down, things went haywire- most notably the housing market. As people were out of work entirely or worked from home, the desire to move for expansion purposes or affordability increased. With an increased demand to relocate, prospective homeowners couldn’t compete with competing buyers who frequently went tens of thousands above the asking price or opted to pay for the cost homes in cash. Those who lost the bidding wars turned to renting, but construction companies and landlords couldn’t handle the demand, leading to a scarce rental market and increased prices.

That’s a general reason why the cost of rent has increased in recent years, but your landlord may be raising your rent solely for the following reasons: an increase in expenses, renovation or remodeling costs, etc. Dealing with a rent increase isn’t easy, but reassessing your finances can be a good step in the right direction.

Reassessing Finances When Your Rent Increases

1. Evaluate Your Budget: The reality that your rent is increasing sets in, and it is time to get serious about your budget and finances. According to Sage Singleton of Rent.com, the combined cost of your rent and utilities typically should not exceed 30 percent of your overall budget. If the new spike in rent tips you over 30 percent, it may be worth considering moving out and finding a new, more affordable place to live. Granted, the price of rent nationwide has increased since the COVID-19 pandemic hit in 2020, with an average national increase of 15.5 percent in 2022. If prices aren’t affordable anywhere else, here’s what you can do to reassess your finances and stay in your apartment.

2. Talk With Your Roommates (If You Have Them): Tackling on a rent increase while living on your own can be overwhelming and difficult, but if you have roommates, the breakdown of the increase may not hurt as much. If you have roommates, arrange a sit-down to discuss the recent increase and how the increase can be split between each of you, whether it is two, three, or four ways. Doing this ensures that everyone is fairly paying their share of the rent, and also makes the increase feel more manageable to pay. During this conversation, you may also discuss certain measures of managing finances with your roommates, including cutting down on excess spending.

3. Cut Down on Extra Spending: Between school and work, it can be easy to take the convenient route by ordering out, getting fast meals at the grocery store, buying coffee instead of making it at home, etc. We all love to have these conveniences in our lives, but oftentimes they can come at a cost. If you are dealing with a rent increase, try to cut down on unnecessary spending to help offset the added rent cost. Unused subscriptions, take out, retail shopping, high electricity and water bills, etc., are all things that can be reduced or eliminated altogether, which can help you manage the new rent bill better.

4. Negotiate With Your Landlord: Landlords are in the business to make money, and given the state of the world in the aftermath of the COVID-19 pandemic, many landlords were left with no choice but to increase the rent to compete with higher market prices and offset the costs of either tenant not paying rent or inflating utility costs. If you’ve been a long-time tenant or a low-maintenance, good tenant, there is a chance you may have some wiggle room to negotiate this increase with your landlord. For one, one tenant is better than no tenant, and your landlord will likely prioritize keeping you over having to find a replacement for your vacant spot. Brianna McGurran of Experian suggests, “Remind the landlord of your strong record as a tenant and ask for a smaller increase, offering a number that’s in line with current rents in your building and neighborhood. You could offer to sign a lease for longer than the standard 12 months at your current rent, which lets the landlord save money by avoiding having to search for new tenants.”

5. Negotiate Your Bills: Did you know you can negotiate some of your bills? So many of us assume that the number on our most recent statements is the total that we have to accept, but in some cases, you can negotiate the cost of bills and add some money back into your pocket. Per Steven Layton of NerdWallet, you can negotiate the following bills: cable or satellite TV services, cell phone services, credit card interest rates, car insurance, bundled services, and more. Being a loyal, long-time customer of the service you are trying to negotiate is definitely an added perk, but anyone can try to negotiate bills. By offering to cancel your service, sharing your history as a customer, and explaining the lower costs of competitor services, it is likely that you can save money, even if it’s only a little, on some of your service bills.

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While a rent increase can be overwhelming to deal with at first, having a clear idea of where you stand financially can give you the clarity you need to make a plan and either find another living situation or manage your budget effectively.

It’s no secret that college costs a lot of money. Make sure your investment in higher education is protected with GradGuard. Our affordable tuition insurance and renters insurance plans are specifically designed for college students. Customizable plans make it easy to protect your tuition, room and board, laptop, bike, and so much more.

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