Searching or living in an apartment and wondering why the rent is so high? We understand, considering the Apartment List suggests that the median rent increased by a substantial 16.4 percent in 2021.
Although this isn’t exactly across all states, cities, and towns, all apartment units have increased rent. But why are apartments so expensive? Here’s what you need to know:
Apartments can be expensive for numerous reasons because of their building type. Typically, this type of building is in cities or towns, meaning the location plays a massive role in how much it’ll cost each month. Other factors that determine the price are size, aesthetics, insurance, amenities, and additional extras you might have to pay for, like pets, parking, or storage.
After reading the above, it should be easier to visualize why apartments are so expensive. To understand further, we elaborate on what determines the rent price of an apartment below.
What Determines The Rent Price For An Apartment?
In February 2021, the average monthly rent for apartments in the United States was $1,124. Considering the median monthly wage in the US is $2998 (before tax) a month, it’s a huge chunk of salary taken away for rent.
To understand what makes up the price of rent, I suggest you become familiar with the below. By developing knowledge on this, you could even save yourself a few bucks.
Location Of Unit
Apartments located near schools, transport centers, highways, and, most importantly, states will significantly affect how much you’ll pay each month for the unit. Let’s take a look at this detailed graph from Statista – in 2018, the price per square foot of an apartment were the following averages:
| States | Price per square foot (USD) |
| District of Columbia | 2.95 |
| New York | 2.43 |
| Hawaii | 2.39 |
| Massachusetts | 2.31 |
| California | 2.15 |
| New Jersey | 1.88 |
| Washington | 1.64 |
| Rhode Island | 1.52 |
| Oregon | 1.43 |
| Maryland | 1.41 |
The above suggests average prices per foot in various states. The physical state location plays an enormous role in rent pricing.
Considering the average-sized apartment in 2018 was 941 square feet, it tells us you could pay $2,775.95 in the District of Columbia and $1,326.81 in Maryland, which is a $1,449.14 rent difference each month.
I’m no genius, but if you had the freedom to either live in the District of Columbia or Maryland, I’d undoubtedly move to the cheaper option and save myself a considerable amount of money.
Size Of Apartment
Including the above, the total square feet of an apartment will also determine the monthly rent price. The above suggests that the average size for an apartment in 2018 was 941 square feet.
However, you can find larger or smaller-sized units which could increase or decrease the total monthly costs.
The size of the property won’t just increase the total rent amount, but the utility bills also. Living in a larger apartment tends to suggest you live with more than one person.
Therefore, you can expect increased water, gas, electricity, and other utility bills to ensure suitable living conditions.
Aesthetics
Naturally, the more visually pleasing aesthetics shown either on the internal or external of the apartment block, the more expensive the rent will be. It’s a part of human nature to desire good-looking items, and living quarters are the same.
For instance, a run-down apartment complex will be much more inexpensive than a new-build with an innovative design.
Storage Fees
Storage fees will only be present for some individuals moving into an apartment. Instead of the monthly cost being the only price you pay for the unit, you need to consider the other aspects.
Of course, if you’re downsizing from a house to a small or regular-sized apartment unit, you’ll encounter storage issues.
Because of this, you might need to pay additional storage fees until you increase the size of your property or sell your goods.
Whatever the reasoning might be, you’ll need to store your remaining furniture somewhere.
Insurance
Most apartments nowadays come with pre-installed furniture as they’re usually looked at as short-term living solutions.
You might need to purchase a more comprehensive renters’ insurance covering the building itself and the furniture.
Notably, this fee depends on your landlord as their policies for renters could vary massively. For example, some property owners may require you to prove your insurance before moving into the unit.
Others might ask you to pay a security deposit that’ll cover any potential damage coursed during your agreed contract.
But whether you move into a house or apartment, you’ll need to pay insurance to guarantee your property and goods in unfortunate events.
Therefore, paying for something like this is mandatory in both situations.
Pets
Apartments and pets don’t mix well, especially when you include landlords. Pets can cause havoc.
Because of this, you’ll probably be asked to pay additional fees to allow your pets to move into an apartment with you. It’s solely due to pets causing odors, noises, safety hazards, and damages.
Although this isn’t the case for all pets, as a statistic, it is.
Therefore, landlords will either ask you to purchase comprehensive insurance that covers this aspect or pay a security deposit at the beginning of the renting agreement. Usually, this could be quite a significant amount.
Amenities
For those that don’t know, amenities can also be referred to as facilities or additional extras. In some apartments, you might receive different amenities, including the following:
- Internet and cable
- Air conditioning
- Electricity
- Parking
- Additional storage
- Gym
The above are a few examples of amenities that some apartments obtain, depending on what they already have installed.
However, the more these facilities or “additional extras” that come with an apartment, the more your rent will cost every month.
Parking
The final cost of an apartment you’ll want to take into consideration is parking. Usually, apartment blocks are found in congested cities or towns to increase housing capacity.
Therefore, you’ll want somewhere to park your car. Although some units will include this within their amenities, some won’t.
Because of this, you might need to budget for parking while considering where to rent. In some cities, parking can put hundreds onto your rent bill each month.
After reading the above, you should have gained a better understanding of why apartments are expensive. Without a doubt, this highly depends on where your apartment is located and the extra features you require.
However, by becoming knowledgeable on this, you can now realize why apartments can become a considerable amount of money.
Conclusion
This is everything that goes into apartment rent and why it’s so expensive. If you want a more comprehensive breakdown of how rent works, visit here.
Landlords often make sure that you’re making 3 times the rent before letting you sign any documents. You will often be asked these questions before they charge you application fees.