Knowing how to budget for your apartment and associated living expenses is crucial for maintaining the lifestyle you want. Budgeting becomes even more daunting if you are a first-time renter. However, there are some steps you can take that can help you budget for a two bedroom apartment.
For the better part of a year now, new norms have replaced traditional ways of interacting with others. Digitalization has almost overtaken all aspects of life, including where and how we work. Most people were accustomed to coming home from work and using the space for rest and sleep. Now that some are working from home, it’s become necessary to convert the only bedroom into an office, which is not convenient for most people. As a result, two-bedroom apartments have seen new popularity among apartment dwellers.
A two-bedroom apartment provides a befitting solution adding extra space, but at a price. It’s important to know the cost of transitioning to a two-bedroom apartment so you know whether or not you can afford to make the change.
Renting is considered an affordable alternative to buying a house which makes the rental market highly competitive. Rent prices vary from state to state and tend to be higher in places where the median income is above average. The most expensive cities to rent an apartment in the U.S. are San Francisco, Los Angeles, Washington D.C, and New York City.
The average rent for 2 bedroom apartments usually hovers around $1,300/month, but the average rent has recently increased by as much as 5%.
From current trends, it appears rental costs are increasing faster than wages across the U.S. are increasing. Which is making it tougher than ever for tenants to afford to rent an apartment.
Have you recently visited a friend and her spacious apartment tempted you to look for a two-bedroom apartment of your own? Do you actually need the extra space? Remember that you are paying per square foot. So you will be paying for the space you use as well as the space you don’t. If you are addicted to working in the living room while watching your favorite TV show then why do you need a separate room for an office? Would you use the extra room for completing work assignments or is it going to be converted into a storage room instead?
If you are looking for a two bedroom apartment with the intention of making the extra room a guest room, you need to figure out how often you have overnight guests. Also, would that justify the additional expenses you will incur from having a two bedroom apartment? Other than the higher rent, you will have to spend money on furnishing your extra room.
Before you take steps to secure a two-bedroom apartment, ask yourself if it is worth the investment. No doubt, life will be a lot more comfortable with an extra bedroom. But it would also add a significant amount to your monthly expenses.
When you weigh the pros and cons of having a two-bedroom apartment. You should also consider the additional utility cost that comes along with it. It will take more time to clean the apartment and will also cost you more money to heat and cool the space.
Ideally, what you pay in rent should not be more than one-third of your monthly income. Even landlords follow this rule while reviewing rental applications for potential tenants. Based on this practice, if your monthly income is $6,000 then your monthly rent should not exceed $2,000.
Another popular best practice suggests that your living expenses (including all utilities) shouldn’t be more than 25% of your salary. Therefore, if you are earning $6,000 a month, your living expenses should not be more than $1,500.
Space is a luxury, and moving into a two-bedroom apartment can be tempting. However, try not to get carried away with the fantasy of having more space than you may actually need. Calculate the additional costs of living in a two-bedroom apartment before you upgrade.