"Goals are dreams with deadlines" -- Diana Scharf

Tuesday, June 4, 2013

Finding a Bargain Apartment in a High-Rent Area

Image credit: ghenadie / 123RF Stock Photo
When I finished graduate school in summer of 2009, I didn’t have a clear sense of what would come next.  My original plan when I enrolled in a Master’s program was to pursue a Ph.D. and eventually teach at the university level.  For various reasons, I decided against this plan.  Fortunately, I did not have any student loans from graduate school.  I had received a graduate assistantship which provided tuition remission and a modest living stipend.  I also worked a few part-time jobs to earn a little spending money.  The decision not to pursue a doctorate was a good one, but I needed to find a way to earn a living.  I needed to develop a Plan B, fast.  

Although my family lived, and still lives, in California, I knew I wanted to stay on the East Coast in order to be close to Mr. W.  The lease on my college apartment was set to expire on June 30.  However, I hadn’t found a full-time job by the time classes ended.  Without a reliable source of income, I didn’t feel comfortable signing a new lease.  I still had my part-time jobs, but they wouldn’t pay enough to make ends meet. 

Mr. W’s parents graciously offered to let me stay in their guest bedroom for as long as I needed.  I’ve always been so appreciative of their welcoming hospitality.  In a time filled with uncertainty and pressure, they helped to alleviate the financial pressure I would have felt if I needed to rent my own apartment.

On June 29th, I moved in with Mr. W’s family.  On June 30th, I had a job interview with an organization located in central New Jersey.  A few weeks later, I started working at the same organization where I had interviewed, and where I currently work (about 40 miles south of Mr. W’s family).  I stayed with Mr. W’s parents for the first three months, making the 80-mile round trip commute.  After my 90-day probationary period at work had passed, it seemed like a good time to find my own apartment.  Although I loved living with Mr. W’s parents (really, I did!), I didn’t want to become an imposition or take advantage of their generosity.

Deciding to Deal With a Long Commute:
When I started apartment hunting, I considered moving closer to work.  I had been spending about 2.5 hours a day and $300/month commuting to work.  It was obvious that I could save a lot of time and money if I moved closer to the office.  Ultimately, I decided to stay in the same area and find an apartment near Mr. W.  This might seem foolish, but it was the right decision for me.  His area had the small-town feel that I liked.  Even if I moved closer to the office, I would want to see Mr. W as much as possible.  I would still be driving between central and northern New Jersey several times a week.  If I was going to make the long drive anyway, why not just live closer to him in the first place?   Once I had settled on location, it was time to start the process of finding an apartment. 

A High Cost-of Living:
Based on my salary and the cost of commuting, I decided that I should spend no more than $1,000/month, including utilities, on housing.   With this number in mind, I started perusing Realtor.com.  The results were discouraging: small one-bedroom apartments in Mr. W’s town rented for $1,500/month.  A two-bedroom place (which I didn’t need) could easily be $1,800-$2,000.  In comparison to major urban areas, these rents weren’t high.   However, they seemed high for the suburbs.  More importantly, I was committed to living within my budget.   

Found: Basement Apartment for $700/month (October 2009-August 2011)
After scouring Realtor.com for a few more weeks, I still wasn’t having much luck.  I decided to try a different approach and started checking Craigslist and the “For Rent” section of the local newspaper.  I stumbled across a promising advertisement: a clean, newly-renovated basement apartment in a private family residence.  Partially furnished.  Kitchenette, laundry facilities, and parking space.  $750/month, including utilities. 

I met with the owners/landlords to view the apartment.   The owners were very nice and were anxious to rent their unit.  They liked me and offered to drop the price to $700/month since they thought I was the “right” tenant (I also think they were hoping I would eventually date their son.  This was awkward, especially since I was already in a relationship, and so was he.).   

·         Great price
·         Location (safe neighborhood, near Mr. W’s house)
·         Clean and newly renovated
·         All utilities included in price
·         Dedicated parking spot
·         Laundry facilities on site
·         Partially furnished
·         Willing to accept month-to-month lease
·         No realtor fee

·         400 square feet
·         No closets
·         Minimal natural light
·         Musty basement smell
·         No separate entrance (my “front door” was in landlord’s garage)
·         Kitchenette had a sink, compact fridge and a range top, but no oven
·         Partially furnished
·         Matchmaking landlords

The biggest drawbacks to this apartment were the small size and the lack of natural light.  I love sunlight and this apartment had just a few tiny windows.  But given that I would be working long hours, I didn’t think this was a deal-breaker.  It was partially furnished, which was both good and bad.  While in grad school, I had slowly purchased “not-the-absolute-cheapest” furniture from Ikea, and I was proud of my modest furnishings.  If I rented this apartment, I would need to get rid of some things or put them in storage.  I would also need to create some sort of storage solution for my clothing. 

Another prospective tenant was interested in the apartment, so I had to decide quickly.  I concluded that the pros outweighed the cons.  The price was hard to refuse.  In addition, the landlords offered a month-to-month lease for no extra charge.  If the arrangement didn’t work out, I could simply move at any time. 
I moved into the basement apartment in October 2009.  It was a cozy and comfortable unit, though a bit small.  At times, I really longed for a light, airy home with big windows.  I moved out in August 2011, when my apartment flooded during Hurricane Irene.  The basement had a sump pump that should have prevented flooding.  However, our entire town lost power for 5-10 days (depending on which power grid served your property), so there was no electricity to operate the sump pump.  To this day, I still feel incredibly fortunate that this was the only damage I experienced resulting from Hurricane Irene.  So many others experienced devastating damage. 

Found: Two-Bedroom Apartment for $1,250 (September 2011-present)
After my apartment flooded, I needed to move quickly.  There was no power, so my dark apartment became even darker.  My belongings were sitting in several inches of water, and I was afraid that mold spores would begin to grow.  I stayed with Mr. W and his parents for several days.  They didn’t have power ,either, but at least there was sunlight and dry ground.  Using my smartphone, I searched Realtor.com for available apartments.  I had to do this quickly, since there would be no way to recharge my phone battery. 

By this time, I had received a promotion and a raise at work.  I thought that it would be reasonable to spend $1,200-$1,300/month on housing, including all utilities.  I still couldn’t find any listings in Mr. W’s town in my price range.  I decided to see what was available in surrounding towns, since those could be slightly less expensive.  I came across a listing for a two-bedroom apartment with hardwood floors, a built-in china cabinet, and ceiling fans.  From the pictures, it looked adorable.  The apartment was located just a mile from Mr. W, but it was in a different town.  It was still a perfectly safe, pleasant area.  However, the school district was not well-ranked, which considerably decreased housing and rental prices.  Since I didn’t have kids, school districts weren’t important to me.  The price was $1,250/month, with heat, hot water and waste removal included.  I would only be responsible for electricity, cold water, and gas.  For that price, I had expected a small one-bedroom.  This place was 600 square feet and two(!) bedrooms.  It was still a compact apartment, but it felt enormous compared to my basement apartment.   

·         Great price
·         Location (safe neighborhood, walkable area, near Mr. W’s house,)
·         Lots of character
·         Second-floor unit (ie, flooding would be unlikely!)
·         Two bedrooms
·         Tons of natural light in bedrooms and living room

·         Heating is included in price, but landlord controls heat (ie, it can be quite chilly)
·         On a busy street corner
·         Small closets
·         Dark kitchen
·         Laundry facilities are in adjacent building

 As soon as I toured the apartment, I knew that it would be the perfect place.  I could see myself living there for several years.  It was also large enough that Mr. W and I could live there together once we were married.  As with my first apartment-hunting experience, time was of the essence: another prospective tenant was seeing the apartment and the realtor didn’t think it would be on the market for long.  Plus, I needed to get my belongings out of the wet basement asap. 

The financial logistics were also more complicated than when I moved into my basement apartment.  I needed to pay $3,750 in a matter of 24 hours (1 month’s security deposit, 1 month’s rent, 1 month’s realtor fee).  I had enough money in savings, so the cost was not a problem.  However, I kept the majority of my savings in an online high-yield savings account.  It would take 3-5 business days to transfer into checking.  The landlord wanted to receive payment in the next 24 hours, or he would release the apartment to the next interested party.  On top of that, my personal checks were unusable because I had kept them in my bottom desk drawer, which was now under several inches of water.  Luckily, it all worked out.  I had just received my paycheck on 8/31, so my checking account balance was higher than I would usually have kept it.  Mr. W lent me the balance I needed until I could transfer money from my high-yield savings account.  And instead of writing checks, I got money orders from the bank.  I signed a lease in early September and moved in immediately. 

Mr. W and I still live in the same two-bedroom apartment.  Along the way, we’ve discovered other pros and cons.  Parking can be a real pain because of traffic for the businesses located downstairs.  However, the business owners are some of the friendliest folks we’ve ever met.  Another gripe: someone swipes our weekend-edition NY Times if we don’t pick it up early enough in the morning (seriously? I look forward to the Sunday paper all week!).  On the other hand, one of my neighbors always brings in packages that are left outside the building entrance, to ensure that they aren’t stolen by passers-by. 

I’m pleased that we have been able to keep our housing costs on budget, despite being in an area with a relatively high cost-of-living.  Sometimes our 600-square-foot home starts to feel cramped and I fantasize about moving to a larger apartment.  Then, I remind myself that staying on budget now will help us to achieve our long-term goals in the future.  Being able to buy a house in three or four years is much more important than having ample room now! 

I would love to hear how other people have kept their rent/housing costs low.  Are there sacrifices you’re making now in order to reach a certain financial goal down the road?


  1. Well, for the summer I decided to sublet in a cheaper (slightly farther and less trendy area) for $600/month instead of the $1,000+/month I'd have to pay if I were to live closer to work. After graduation, if I end up somewhere near family, I have zero compunction about living with them to save money. ;-)

  2. It is definitely tough living in a high cost area. My wife and I live in a nice and convenient area of Queens and rent is about the same as yours. It's a 600 sq foot 1-bedroom apartment and parking is another $130. We could use more room with a baby on the way but I think we can manage for another year. I am in a similar situation as you in that I commute 80 miles round trip. We could move closer to where I work but we would be a lot farther from our friends and family...plus we don't really want to move to Long Island.

  3. Like most people, housing is the biggest monthly expense for me. I'm fortunate to live in an affordable city, and that's how I was able to purchase a house. That would not have been possible if I lived in Chicago, a city not too far from where I live. I made sure to buy less space than I needed and a yard that doesn't require too much maintenance. When I lived in apartments, I was willing to sacrifice things like in-unit washer and dryer in exchange for lower rent. I think that's one of the keys to saving on housing costs - be flexible and realize that you may not get everything you want for the price point you've established.