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The Real Cost of Renting?
noobert
Registered User regular
Registered User regular
After Christmas a good friend of mine wants me to move out with her. Her family life is falling to shit (parents getting a divorce, younger sibling developing a drug habit and being a total bitch in general) and well, since i think i can afford it, why the hell not?
So i'm starting to do the maths, trying to work out how much it would cost me a week/month to leave the nest... The recurring expenses i have so far:
Rent - anywhere from 560 - 750 a month
Petrol - 120 a month
Food - 280ish a month
Internet - 40 a month
Edit: Line Rental - 15 a month
Edit: Power - 74ish a month
Edit: Water - 10ish a month
Edit: Gas - ???
Considering between us we are able to get 2 full bedrooms, 2 desks, 1 dining table, 1 TV unit, 2 small TV's, 1 3 seater couch, plates, cutlery, sheets, basic cleaning products and toiletries from our families we are left with the following initial costs:
Initial Costs:
Fridge - ???
Microwave - ???
Washing Machine - ???
Bond/Security - ???
Opening Power Account - 60
So far $1200 a month out. So far that number is good, considering i make at least $1800 a month after tax, sometimes more than triple that (commission based sales). However, H/A, i know there are lots of little costs i have missed. What are they?
So i'm starting to do the maths, trying to work out how much it would cost me a week/month to leave the nest... The recurring expenses i have so far:
Rent - anywhere from 560 - 750 a month
Petrol - 120 a month
Food - 280ish a month
Internet - 40 a month
Edit: Line Rental - 15 a month
Edit: Power - 74ish a month
Edit: Water - 10ish a month
Edit: Gas - ???
Considering between us we are able to get 2 full bedrooms, 2 desks, 1 dining table, 1 TV unit, 2 small TV's, 1 3 seater couch, plates, cutlery, sheets, basic cleaning products and toiletries from our families we are left with the following initial costs:
Initial Costs:
Fridge - ???
Microwave - ???
Washing Machine - ???
Bond/Security - ???
Opening Power Account - 60
So far $1200 a month out. So far that number is good, considering i make at least $1800 a month after tax, sometimes more than triple that (commission based sales). However, H/A, i know there are lots of little costs i have missed. What are they?
noobert on
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Even if you go cheap, expect a painful hit to the wallet, even if it isn't recurring.
A security deposit on the apartment.
You may also be required to pay the first and last months rent before you move in.
http://www.thelostworlds.net/
Food bills can be slashed by a fair chunk if you're careful where you shop - aldi is your friend. It'll take a while to build up a pantry though, so you might find yourself spending a little extra on things like spices and sauces in the first few months.
You'll have to cover a bond for the rental place, standard is 4 weeks' rent, so halve that and there's your share.
edit: if you have to actually open the power account yourself they'll ask for a deposit, usually around $60. it just gets put on to your first bill.
also if you have any pets they'll be extra on the deposit, even fish and stuff sometimes.
These initial costs are really starting to add up tho.
Is required to have ADSL.
That way if the unexpected set back occurs then you have a bit of a money "buffer" to protect you from being late on bills. How much you save back is more of a personal choice and your comfort level with risk, but personally I would suggest keep 1-2 months of total expenses at minimum; preferable 3 or more.
The other benefit of this, is that you earn interest on your money if you put it in a high yield savings/mma account. If you look around on the internet you can get decent rate, between 3 and 6 %; typically around 4 or 5% apy.
Another thing that is tempting is to charge everything to credit cards and the like. This gets a lot of young people in trouble... so I would avoid using credit cards unless your really disciplined and pay it off 100% of full (hint: the interest rates will eat your money up fast if you keep a balance). Missing even one payment can be costly.
Also, I would suggest putting a bit back for investment. Budget it in at a certain amount and pay it like you would pay any other bill. This should be separate from your emerency fund and should be for investment purposes. Even something as little as $20 a month is worth it. Sock it away in a separate savings/mma account and once you have a decent wad then consider investing it in some stocks, indices, etfs, bonds or other.
Also open an IRA account, more then likely you'll want a Roth IRA... sock some money away in that every month too (yea tax deferred earns!
I know this thread is about rent/paying bills; but trust me, if you figure in and budget even just a small amount for savings/investment then it'll pay off big in the future. Personally I like to try and save 20% of my income and put it in investments, but your tolerance might be lower; but at the very least put something back, even if it's only 5% or so. You'll be glad you did in 10 years from now even if it's a pain at the moment.
EDIT:
Also insurance?
Here it's required (by law) to have some minimum car insurance; which is a good idea anyways.
and if you don't have medical/dental/eye insurance from your place of employment; then I would suggest at the very least some cheap high deductible health insurance (assuming your young and healthy)
Some people would also suggest renter insurance... I didn't have any when I rented; but something you might want to look into. Basically insurance on your stuff in case there is a fire or get robbed. Some people say it's not needed if you don't have a lot of crap; other people swear by it.
I'm guessing if your parents are ok with you moving out they'd more like it if you stayed at home with them for a little bit longer. And you'll save up a small fortune on the whole moving out thing.
Same for me, but then I got a student discount on the cable. Still, it's always good to do the math on stuff like that.
Plus I'm living in Binghamton, where property values have been through the floor for the past thirty years or so, so rent is something like, no kidding, $475 / 3 people = $158.
Didn't really realize how lucky I was about that until this thread.
Maybe that's common in the UK, but it sounds pretty weird to me that they expected cash *and* you were asked to pay for the security check *after* signing the lease. The only time I've ever paid any rental-related fees in cash was when I was at university and renting someone's basement that they'd converted into an apartment. They preferred cash because they were doing everything under the table. If I were that age again, I wouldn't rent a place like that. It's just too sketchy if there are problems. One of the areas of sketchiness being that at least with a check you have reasonable proof that you actually paid for something if there is a disagreement.
http://www.thelostworlds.net/
anyway...back to topic...
Aussie internet structure is shithouse, though. Costs for things like cable are heavily dependant on whether they've been laid in the local area, and you can't get it in apartment blocks for some stupid reason.
noobert, if you go on a lease through a company like Rental Hotline rather than direct from a landlord, they charge a fee to write up the contract. Around $110, but it only applies for contract changes, so your six-monthly renewal or whatever won't attract a fee unless someone else goes on or off the lease. On the upside, not dealing directly with a landlord means there's a lower chance of fuss when repairs are needed etc, on the downside their administrative staff are not very bright.
As for credit cards, I have one with a $500 limit that i use for buying stuff over the interbuts and nothing else.
As for insurance, well my car is under my dads name with me listed as a driver (saves around $1000 a year this way). The only down side is that the car is still in his name. I also have private health cover for pretty much everything under the sun.
Improvolone and Daedalus, I get a very good deal on ADSL as a kick back through work. The ISP we are partnered with bends over backwards for us. But i'll look into it.
Seems the worst part will be getting all of the things i require but take for granted while living under my parents roof.
Thanks H/A... you guys are really helping.
During Winter I averaged about $0.53 a day for power and in summer sticking the AC on occasionally it was I think around $0.80. Keep in mind though the largest amount of power is your fridge and really basic lighting.
Water depending on the place you move into may be included in the rent. Gas may also be included or just plain doesn't exist, it depends on your place.
Rates are usually handled by the owner of the property.
Also consider if you will be driving more or less in the location that you move (close to work, family, friends and places that you go out to)
As people said, the biggest thing that will hurt you is the actual buying stuff you need. The kitchen is a big spender as is a decent bedroom setup. You can ikea the bedroom but it's cheap and will not last long.
Satans..... hints.....
Is that rent just your share of the rent? Otherwise where do you live? Because damned if i could find a place in Melbourne for less than $200/week, without getting a dump or having to live way way out in the sticks.
Food, internet, line rental all agree with what i was spending. My apartment was electric only (no gas) and the bill was around $200-250/quarter. Water was something like $30-40/quarter. (again, one person)
Otherwise, expect to fork out quite a bit in order to set yourself in. Appliances, Furniture and cookware/cutlery etc killed me. Fridge, washing machine, , microwave, sofa, dining table. I also needed a bed but typically people can take their old bed (i couldnt). Vacuum cleaner, mop, buckets, cloths, cleaning products (washing powder, floor cleaner, etc), toilet paper. Plates/bowls, cutlery, cooking utensils, pots & pans, baking trays, glasses, mugs. Oh, towels. I forgot towels. Had to go home for my first shower :P.
Also as mentioned your first few food bills will be expensive. This is to stock up your pantry on initial items like full bottles of sauces, spices, etc that later you only replace periodically.
If i had to do it again, i'd keep a notebook at home and as i go around using things i'd write it all down. eg Breakfast, used bowl, spoon. Washed with Sponge, detergent. (or dishwasher, therefore powder/tablet). Took a dump, used toilet paper, toilet brush for cleaning. Etc etc. Just as you notice things. You'll still miss stuff if your parents do it for you (eg i never vacuumed when i lived at home, my mum always did the whole house) but it would help. All sorts of stuff you forget comes up in the first month so it will be an unusually expensive period.
Also, fuck cleaning supplies, seriously soooo expensive. I remember looking at the first receipt from a supermarket when I was setting myself up and choking a little bit. But, they're kind of necessary.
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The rent would be my share, but in Perth you can get OK places starting at $160 a week. However we both want to stay in the area we are in now, so we are looking at $250+ in total a week.
I can't cook for shit, seriously every time i try stuff explodes. She can tho.
Even with all these extra costs i hadn't though of, i would still easily be able to afford it... Not too sure about her tho.
I'm pretty sure he's in Perth.
If you can find anywhere here that's less than $200 a week I'd be impressed.
Like I said I live in a tiny 2 bedroom (really for one person) apartment and while I'm paying premium for the location I would not be suprised for it to jump by around $50 dollars at the end of this lease.
Satans..... hints.....
I was constantly knocked back when I was applying because there were so many applications. It wont be as bad as you are moving out with a lady friend, but having young single male is a death sentance for alot of first time renters.
Satans..... hints.....
That's what i was thinking too. Considering i work full time would that increase my chances of getting a place?
What about if we pretended to be a couple? Think that would make them look upon us more favourably?
Yes to the couple thing.
I was clearing 70k a year when I was moving out, I still had shitloads of trouble. I felt like yelling at at the property managers, "I earn more money than the last two people that saw it combined." But they just saw me as some young dude with no money. The main reason I reckon I got the place is that as it turned out my best friend's mother who is a teacher taught one of the property managers at the agency the house was through.
Satans..... hints.....
A lot of expenses are just normal things that you have to deal with when you move out of your parent's place. A lot of kids get their parent's old pots, pans, some plates/dishes, etc., and the parents are happy to buy new things
But I'd ask why you're looking to move out with her, and what your ultimate goals are. Do you want to move out? Are you looking for a place that you'd like to live in regardless of the friend? Or is she demanding a certain price-point and you're going to be stuck footing the bill?
Renting doesn't have to be expensive, but you can quickly run into trouble if you go hog wild once you're out on your own with your own space. Also, estimating costs for an apartment can be kind of a crapshoot -- most apartments here already have power hookup, and simply transfer the billing from the previous resident to the new one. Appliances come with the place, and you generally just need small kitchen appliances (like microwaves). And you don't buy a microwave each month, but you buy one and keep it for years. Same with a blender, or mixer, and those kinds of things aren't things that you need in Month 1.
You can clean just about anything you're likely to find in a low-rent apartment with a bleach solution. Might toss in Comet, too. The rest is just gravy and makes life a bit easier.
This is truth.
Seriously, bleach some dishwashing liquid, laundry powder and a window cleaner.
I challenge you to find me something I can't clean.
Satans..... hints.....
Yeah, seriously. If you are looking at a *rental* apartment or house and it doesn't come with a refrigerator, look elsewhere. Furniture is another matter, of course.
http://www.thelostworlds.net/
Let me rephrase it for you.
If you live in america and it doesn't come with a refrigerator look else where.
Out of all of my friends I only know one of them that got a fridge (no wait two, but the other dude lived in the army housing). The guy that got a fridge had a fully furnished apartment and was paying 50 dollars more a week than he would of if it was not furnished.
Satans..... hints.....
vinegar and baking soda are wonderful things. Also, a copy of Spotless.
Yeah, the only thing that came with my place was an old clothes dryer and an older microwave that may or may not give us all cancer, and even that was unusual.
Since not only do i live in the same country as Blanket, but the same state, his advice on the fridge thing is the most relevant. Also a fridge is like $350.
EggyToast, I have been thinking about that too. Since getting dumped about what, 4 months ago now, I've fallen into a sorta depressing life routine. On top of that I've been feeling really lonely too. I guess that i feel moving out with a good friend or 2 will pretty much crush the lonely thing, and hopefully change this depressing routine. Plus the whole getting away from the parents thing too.
Also, since i'm doing the maths on a "worst case" situation, i can easily afford it.
Satans..... hints.....