People often envision young adults graduating from college, landing a job, and renting their own place to live. While it was never easy, that path has become more and more difficult to attain in a straight line. College isn’t cheap, and many grads are starting their adult lives with a heap of student loans and jobs that may not pay as much as it costs to live independently.
It is especially difficult because rents have risen 16% in the last year alone, and 28% since 2017, according to this Realtor Magazine article. If that is not enough, throw in the fact that renters are facing bidding wars that are pushing them to bid anywhere from 10% over, to 1.5 times the listed monthly asking amount!
It is not like you can snap your fingers and demand a high enough wage to make up for how much rent is today. And there is no magic wand you can wave to lower rent prices. So, what is the solution?
There is no one-size-fits-all remedy, but here are a few things to consider if you have recently graduated from college and have been struggling with the cost of renting:
Live with family and save. Okay, it is not the most appealing thing to hear, but it is sensible. Sure, you would rather have your freedom and a place of your own, but you might be better off moving back home and saving as much money as possible. A smarter move would be to not just stay long enough to save what you need to rent a place, but to stay as long as it takes to save enough to buy a place of your own.
Get roommates. You might be dreaming of having a place all to yourself, but you might need a roommate or two (or three) to help pay the monthly rent. You don’t need to be best friends with them. In fact, don’t just choose a roommate because you are great friends. Make sure whoever you choose is reliable and financially able to share the costs. The last thing you want to do is take on the responsibility of a lease with someone who decides to move out and leave you picking up the slack when they don’t have enough money to pay their share.
Buy a rental property. If renting is barely affordable for you, buying a place probably sounds out of the question. But you might be able to, and you may be better off doing so. See if you can qualify for a mortgage and buy the most affordable home you can, even if it isn’t your dream home. Better yet, buy a multi-family house and live in one unit while renting out the others to help pay part (or maybe even all) of your mortgage. If you are not in the financial shape to get a mortgage on your own, see if your parents or someone else you are close to can co-sign or invest in a place with you. If that is not an option, consider teaming up with another recent grad or two and buying a place together.
It is never easy to strike out on your own after college, but right now it is even more difficult. Just know that you are not alone in your struggle—it is hard for most recent grads. Many of them will do whatever it takes to get a place of their own even if it is a huge financial burden and mistake, but with some thought and consideration, you can make some wise decisions that will set you up for a better future.
If you want to explore your options, let's connect. We know the ins and outs of homeownership and would be honored to assist you.