Renting is smart if you value flexibility. It provides the opportunity to grow your savings and aggressively pay off debts. It's also a smart move if you live in an expensive city like Vancouver or Toronto. If you're a renter saving up for a home purchase, or just looking to free up some money to put toward other goals, consider the options below to maximize your position as a renter.
Negotiate with your landlord
Arming yourself with prices in the neighbourhood, from sites like Craigslist or RentCanada, will help you determine whether or not lower rent is realistic and how low is reasonable. Your landlord will be more likely to negotiate if you're willing to lock into another lease agreement, if you're month to month, or update your agreement to add additional months to your lease. If you don't ask, you don't receive, and getting a discount of even $50 is an annual $600 a year of savings.
Rent out your space
Do you have a parking spot or storage space that you don't really use? Consider renting it out. My girlfriend in Vancouver has street parking in front of her condo, so she rents out her underground parking spot for $50 a month and parks on the street. The extra $600 a year is worth outdoor parking. For more on listing your parking space, check out ParkAtMyHouse, or ParkingSpots. For storage spaces, the best chance you have of making money is to look at what professional storage spaces cost and charge slightly less. You can advertise by listing on Craigslist or any of the social media channels you use. If you travel a lot, consider a temporary lodger to help with rent. There are several ways to find a someone, such as Room For Travellers, a site for homeowners and renters looking to earn extra cash renting space to tourists and visitors looking for alternatives to expensive hotels.
Make a move
Consider all costs before considering a move. Price of rent isn't everything. If you find a space $300 cheaper, but it means you'll be farther away from work and play, and it doesn't include a gym so you'll need a membership, is it worth the move? Meeting with a realtor will help you weigh your options and see what's available. In most cases, the landlord pays the realtor for bringing in a new and qualified renter. Ask family or friends for a referral. Many realtors will be happy to help you if you have a relationship with their clients.
Renter's Insurance
Unless you can afford to cover the replacement costs of your items and any damages that are your fault, you need insurance. Many landlords will insist on insurance before renting you a property anyway. To research and compare rates, click here.
If you're insured and haven't reviewed your policy in the past few months, get on the phone and ask your provider what your savings would be if you increase your deductible, consolidate your renters and auto insurance, install security devices or install safety devices. Also ask what discounts you might be eligible for. Many insurance companies provide a discount if you belong to certain groups or carry certain credit cards.
Read the fine print
If you're considering renting a room, a parking or storage space, or having visitors stay occasionally, read the fine print of your lease agreement. If you think you'll rent out your space, talk to your landlord before signing anything so he can put the right provisions in place. Read the fine print before exiting your space as well and make sure you've complied with measures to get your deposit back. Tenants can be dinged and lose some of their deposit for small damages, including uncleaned blinds and small nicks or holes in the wall. Weigh the costs of DIY touch-ups before the final inspection.
Where you live affects what's left at the end of the month. Under the right circumstances and with smart strategies for the savings you gain from renting versus buying, and for the use of your space, you can create significant financial gains in a short time as a renter.
Angela Self is one of the founders of the Smart Cookies money group.