Rents across states and cities can differ wildly — even rents from one block to the next. How do you separate the good deals from the overpriced?
Here are a few savvy steps to help you quickly gain a general idea of going rates in the area where you want to rent.
Market rate doesn’t mean much if you can’t afford it. The standard rent versus salary guidelines recommend paying no more than one-third of your weekly take-home pay for rent, although that could change depending on your debt load, children, retirement savings, or other concerns. Knowing your own rate will help keep market rates in perspective.
If you earn a good salary for your area, logic would dictate that a rent you can afford will likely be available. In Houston, for example, the average median household income is just under $60,000. Average rent: around $1,300. If you earn well above the median — say, $80,000 — and a landlord or property manager wants to charge well over one-third of your income for rent — maybe $2,500 or more — he’s likely asking too much. Maybe the building has a lot of amenities or unusually large apartments, but just looking at the price should give you pause.
Check the Listings
If you’re new to an area, check the local paper, Craigslist and realtor.com®. The more listings you read, the more sense you will get of local apartment prices. We’re not talking a scientific survey or spreadsheets (though feel free to go that route if you’re so inclined). Just general scans of an area should give you an idea of the range of rental costs.
Talk to Everyone
In a new town for a job interview? Strike up a conversation with a local barista about the hot neighborhood. Ask your potential new co-workers about the area. Many people delight in sharing their knowledge. Even better, duck into a REALTOR®’s office to chat. A good REALTOR® will be honest about the area, and might even be able to direct you to some reputable landlords, rental brokers, or local listings.
The U.S. Department of Housing and Urban Development publishes fair market rents. These official documents set prices for programs like Section 8 government-sponsored vouchers. The detail and bureaucratic language might add up to more than the average renter cares to read, but if you really want to do your homework, HUD offers another option.
If you have a specific building or block you’re interested in, talk to the neighbors to get a sense of neighborhood prices. In a large building, ask the manager about average rents, or see if you can strike up a conversation with a current tenant passing through the lobby. If you’re thinking about renting in a smaller building, or a house or condo, see if you can find other listings for that street and compare costs.
All of these options might seem time-consuming, but the hard work that saves you a few hundred dollars a month adds up to thousands of dollars a year. Understanding the market can help you negotiate a better rent, if you go that route. Plus, you’ll have the peace of mind of knowing that you didn’t pay too much for your new home in a great new neighborhood.
This article was originally published by Anne Miller on realtor.com. See the original article here.