It's important, of course, to know what type of apartment you can afford before you embark on an apartment search. But it's also a good idea to learn whether you're paying too much rent for an apartment you like or already live in. If you are, it means you have less money available for other expenses or savings, or it means you can be getting more for your money at that rent level.
How, then, can you find out if you're paying too much for rent?
If you're renting an apartment in a building that participates in an affordable housing program such as the low-income housing tax credit program, the amount you pay may be capped and determined based on local income levels. But market-rate rent is simply what a landlord can ask for given the supply and demand in your area. So, if you determine that you're paying too much rent, it means you may be more likely to succeed in negotiating a lower rent (or less of a rent increase) at your next lease renewal.
Here are some ways to find out if you're overpaying when it comes to your apartment rent:
- Talk to your neighbors. See what other people in your building are paying in rent. Also, if you have friends or work with people who live in your neighborhood, ask what they pay. Take note of any differences between their apartments and yours, especially the number of bedrooms, bathrooms, and type of amenities.
- Check your local listings. Browsing apartment listings for your area is also a great way to check what comparable apartments are going for.
- Use a free, online tool. A free, online tool known as Rentometer can help you determine if you're paying too much for rent. Just enter your address, monthly rent, and the number of bedrooms in your apartment and click the "Analyze My Rental" button. A quick glance at the meter will show you if you're in the green ("a good deal!"), red ("[way] too high"), or in between ("reasonable"). Rentometer points out, however, that green results could still be reasonable if your apartment is in poor condition or has fewer amenities than most. Similarly, red results could be reasonable if your rental is in prime condition or has more amenities than most. To the right of the meter, you'll see a map centered around the address you provided, with nearby rentals listed for comparison (and color-coded green, yellow, and red to show the reasonableness of price). You can also use this tool to check out whether the rent for an apartment that you're considering pursuing is fair. Also, if you want to check for a particular neighborhood, just enter an address in that neighborhood. (Note: This tool can also be used to determine if you're being charged too little for rent, so don't tell your landlord about it!)