Before becoming homeowners, most people rent a house or apartment.
Renting is a terrific stepping stone to homeownership because you can accumulate the savings necessary for a down payment, while also learning your living preferences.
But, the only way to save enough to eventually buy a house is to live in a city that has access to high-paying jobs and relatively affordable rent costs. It is recommended that your monthly rent should be no more than 30% of your monthly income.
After analyzing both the median income and average rent cost for more than 25,000 U.S. cities, LendEDU recognized those cities that are the most budget-friendly places for renters.
The cities and towns below are great places for young adults to rent an apartment or home in because the availability of high-paying jobs makes rent only a small portion of their budgets, which means the opportunity to save will be there for the taking.
The Most Budget-Friendly Cities For Renters
To see how a city ranked within only its state, either sort the table on the “State” column or type your desired state into the search bar.
To be considered for this ranking, a city had to have a minimum of 12,000 housing units.
The data found below derives from a dataset from GreatData that was licensed by LendEDU. GreatData compiles the most up-to-date data and estimates from the U.S. Census Bureau, in addition to calculating its own projections based on historical trends, to provide accurate and current household data for nearly 30,000 U.S. cities.
The “Average Annual Rent” statistic for each city includes utilities and was found by multiplying GreatData’s average monthly gross rent statistic by 12.
Renters Insurance Tips
If you are looking into renting a home or apartment, you should also learn a bit more about renters insurance because even if it’s not required by your landlord, it can provide valuable peace-of-mind.
LendEDU outlines a few tips below if you are in the market for renters insurance.
Compare Your Options
There are a ton of renters insurance companies out there from traditional companies like The Hartford to more technology-based, younger companies like Lemonade.
Because of the wide variety of renters insurance options, it’s so important to compare as many as possible to make sure you wind up with a good company offering favorable terms.
Know the Different Types
There are actually a few different types of coverage when it comes to renters insurance so familiarizing yourself with them should help you get a better idea as to what you need.
The most common types of renters insurance coverage include personal property, liability and medical payments, and loss of use. The first will cover things like clothes and jewelry, while liability and medical payments will protect you if someone is injured in your dwelling. Loss of use can compensate you for alternative living expenses like a hotel in case something like a natural disaster hits and makes your property unlivable.
Get a Feel For the Cost
Finally, you should get a good idea of the cost of renters insurance and what will alter the price in either direction. For example, the age and condition of your property could make a renters insurance policy more expensive.
On the other hand, there are renters insurance discounts in certain situations like if you have multiple policies with the insurer or if you have security devices and fire alarms setup.
Typically, renters insurance premiums range between $15 and $30 per month.
Methodology
All data found in this report comes from GreatData. LendEDU licensed the dataset provided by GreatData, which derives mainly from the U.S. Census Bureau. For data points like “Average Annual Rent” and “Median Household Income,” the data comes from the most recent U.S. Census Bureau update but GreatData also calculates and combines its own projections based on historical trends to provide the most up-to-date data. The “Average Annual Rent” statistic for each city includes utilities and was found by multiplying GreatData’s average monthly gross rent statistic by 12.
For some cities listed in the report, GreatData provided multiple ZIP Codes within the city, with each ZIP Code having its own data. In these instances, we combined all ZIP Code data for that city to provide a single, weighted stat line for each city. For example, to find the weighted median household income for a city with multiple ZIP Codes, we weighted each ZIP Code’s median household income by that same ZIP Code’s total number of households.
Similarly, to find the weighted average annual rent for a city with multiple ZIP Codes, we weighted each ZIP Code’s average annual rent by the total number of housing units in that ZIP Code.
To be considered for this ranking, a city had to have a minimum of 12,000 housing units.
Once each eligible city had a single statistic line for all pertinent statistics, we divided its average annual rent by its median household income to find the rent-to-income ratio.
See more of LendEDU’s Research here.