How to Find and Rent a Cheap Apartment
Cheap apartments are available for rent in most cities, of course, though even the most affordable apartments might seem expensive for people moving from other parts of the country, or the world. What constitutes cheap rent in New York City or San Francisco may be middle of the road in other cities. It's all relative to the housing costs in that city, and that part of the country. That said, there certainly are budget apartments to be had, if you know where to look.
Tips for Finding Inexpensive Apartments
1.) Find an Apartment Under Rent Control or Rent Stabilization
Many cities have apartments that fall under either rent control, or rent stabilization. By the way, in some cities, those terms are interchangeable, in others, they have two different meanings. To further complicate matters, the definition of a rent stabilized apartment in one city, may be the definition of rent control in another.
In both cases, landlords are limited in the amount they may increase your rent every year, in an effort to keep apartments affordable. Many of these programs were started in the years following World War II, when a sudden influx of returning servicemen, combined with a booming economy, lead to rising rents in many cities.
In some cities, rent stabilization is also used with some brand new apartments. For example, in NYC many of the new luxury rental buildings received tax breaks from the city. In exchange, they agreed to lease the apartments under rent stabilization laws for a period of time (often 20 years). So, while these apartments start out at market rate, they may not increase as much over time if the rental market remains strong.
More than one million NYC apartments are considered to be rent stabilized, which means that the landlord may only raise the rent by a certain percentage with each one- or two-year lease renewal, dictated each year by the city government after negotiations between tenants groups and the Rent Stabilization Board.
Tenants in rent stabilized apartments also enjoy an automatic lease renewal option, and must be allowed to continue to live in their home unless the landlord can show cause that the tenant has violated the terms of the lease. Rent stabilized apartments often become available for considerably less than the current market price, and because they'll stay that way, needless to say, they move fast. So, have all of your paperwork ready and be prepared to make a quick decision.
That said, not all rent stabilized apartments are below market value. Depending on the length of time they've been under stabilization, any renovations that have been done (that the landlord can legally pass along in the form of higher rents), and how often the apartment has turned over (most times, landlords can raise the rent more than the set renewal rate when a new tenant comes in). But even if the apartment is near market rate when you begin renting it, if you stay there a number of years, every year it will almost assuredly become cheaper compared to the general market rate.
One last thing... finding a rent stabilized apartment doesn't mean you're going to find one of those $400 3 bedroom apartments, located in a prime Manhattan neighborhood, that was lived in by an 85 year old person until they died. Unless the apartment is inherited in the family (and there are strict rules on that), the rent on these apartments, when vacated, will increase SIGNIFICANTLY under the law. Just because someone lived in the apartment for 40 or 50 years, and has an astronomically low rent, doesn't mean the next person gets to start where that person left off! If you don't have one now... you won't be getting one.
2.) Rent an Apartment in an "Up-and-Coming" Neighborhood
One of the best ways to find cheap apartments in any city is to look in neighborhoods that are in transition from an extended period of neglect to an era of revitalization and renewal. There are thousands of stories of renters who timed it just right, and moved into once decrepit/now-desirable neighborhoods right BEFORE the community became hot, and rental prices doubled or tripled or more.
Predicting the next IT neighborhood is a favorite pastime in some real estate crazy cities. Of course, this means that the city has to have areas that have fallen on hard times. In some cases, those neighborhoods always housed those on the lower end of the economic scale. In other cases, they were once middle or upper middle class areas that fell on hard times, particularly back in the 60's and 70's when the suburbs exploded and people (and jobs) were leaving cities in droves.
Today, we have, in many cases, the opposite happening. People are rediscovering the convenience of city living. In some cases, baby boomer empty-nesters are selling the "McMansions" and downsizing to luxury condos. New types of jobs (particularly tech and finance) are replacing the old factory jobs. Those old factories are being converted in to expensive lofts. As prices are driven up in the best neighborhoods, certain residents get priced out, and start looking at nearby areas that maybe are not as nice, but fit their budget. Those areas change and grow, become more expensive, and another wave expands out even further into more areas.
Yes, it does mean living in an area that may not be as convenient as the one you like. It may not have the shops, restaurants, and services that you prefer. At least not yet. In some cases, there may be concerns of higher crime rates that haven't come down (although, do your research -- just because a neighborhood has primarily served lower income residents, doesn't mean it's full of crime). But the trade-off is you can actually afford to live there, and have money left over after you pay your rent for things like, I don't know... food.
3.) Lowering Expenses via the Roommate Route
Many people look for a roommate because they enjoy living with someone. Many, many, many more people get a roommate because it's the only the way they can afford to live in that perfect apartment, in the that perfect neighborhood.
Splitting a two bedroom apartment is almost always cheaper than renting a studio or one bedroom on your own (all other things being equal). Getting a roommate can make the difference between living in a particular building (or neighborhood), and living in a less expensive area. In some cases it will allow you to "upgrade" to living in a luxury doorman building with amenities, instead of living in a "cheap," walk-up building in the same neighborhood.
Cut the rent in half on that pretty one bedroom, for example, and suddenly it seems a little more doable. Take the living room as your sleeping area in the same one bedroom, charge your roommate 65% of the monthly rent for the privilege of having a door that closes, and you're saving even more.
4.) Rooms for Rent
Different than splitting an apartment with a roommate, finding a room in someone else's home can be an excellent way to get a cheap living space. Rooms for rent in privately-owned homes and apartments are fairly common in certain areas. Finding them, however, is not always as easy.
For example, the owners of a traditional brownstone, looking to get a little help on their mortgage payments, might rent out the front room of their ground floor, treating it like a small studio, with a bathroom and some sort of kitchenette (or not... sometimes it's literally the room and a bathroom). You may share the front entrance with your landlord, and sometimes be granted access to any outdoor space in the back, but your room is treated as a separate unit within the larger home.
Another fairly common scenario is the owners of a spacious apartment, such as three-bedroom, or a Classic 6, renting out one of their bedrooms, again usually to bring in a little cash. In these cases you are often given access to the kitchen, and have exclusive use one of the apartment's bathrooms, but the rest of the apartment is furnished and maintained and lived in by the owner. This is different than a traditional roommate situation, in that other than kitchen access (if granted), you are otherwise pretty much confined to your bedroom and bath when home.
And although they are pretty few and far between these days, there are certain buildings that still function like the old Single Room Occupancy hotels, in which you literally rent a single room off a common hallway—sometimes with a private bath, sometimes with a shared bath down the hall; sometimes with a sort of half-kitchen, sometimes without any sort of cooking appliances (BYO microwave, mini-fridge, coffee-maker, etc.). You can learn more about these types of rooms here.
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