According to a recent study by Stanford University economist Nicholas Bloom, the COVID-19 pandemic has altered how many of us work, giving rise to a new term: the work-from-home economy. In fact, 42 percent of the US labor force is now working from home full-time. If you are one of them, perhaps your new “office” was once your dining table or your bedroom closet. In the beginning, it wasn’t so bad. After all, you could shuffle things around for a couple of weeks, right?
But now, with almost a full year of shoving your laptop aside when you want to eat dinner, you might be thinking … “How about a two-bedroom?”
A two-bedroom apartment would provide office space, to be sure. But you could also use that extra room for guests, as your gaming room, or even as your yoga studio. The only question: can you afford a two-bedroom apartment?
Should you get a two-bedroom apartment?
Real estate, including apartments, are priced by the square foot. The more square footage you have, the more your rent will be. For example, in Sacramento, the average one-bedroom apartment has 665 square feet and rents for about $1,243. A two-bedroom averages 906 square feet and rents for $1,492, so you’ll pay about $250 more per month for those extra 240 square feet.
Much depends on where you are renting, as well. For example, in Saint Louis, the price difference between a one- and two-bedroom apartment is roughly $170 more. In Birmingham, the difference is only about $77 more for a two-bedroom.
The cost per square foot is determined by the value of the apartment building itself. The higher the property values in the city, the higher the cost per square foot. In Washington, DC, the cost per square foot for an apartment was $2.95 in 2018. By contrast, the cost in Little Rock was $0.75. Cities with more availability, smaller populations, and less demand tend to offer apartments for less per square foot than larger, densely populated cities with less availability and higher demand.
That said, it’s important to compare similar apartments when looking at rent trends. You could pay much more for a one-bedroom apartment in a luxury building with high-end amenities that you might for a two-bedroom in an apartment community that’s considered more budget-friendly.
First, determine if you can afford the extra cost for a two-bedroom in your area. Research the average rent in your city and make sure a two-bedroom apartment will still be below the 30 percent threshold you should be spending on rent.
Do you need a two-bedroom apartment?
You’ve looked at two-bedroom apartments in your area (or even in your current apartment community) and determined that you could afford the additional rent. But do you really need a two-bedroom apartment? Since you are paying per square foot, you’ll pay for the space you use as well as for the space you don’t use. If you prefer working in the living room with the television on, would you really use a separate office? How likely is it that your new, extra room would turn into a storage area for mismatched shoes and the odd bits of furniture family members kindly donate to you?
If you plan to use your extra bedroom as a guest room, how often do you host friends and family for long visits? Is it often enough to justify the extra cost? Remember, since you probably currently own furniture for a one-bedroom apartment, you’ll need to furnish an entire additional room (and possibly another bathroom or even a laundry room).
Weigh the benefits and the drawbacks of having another bedroom. The extra space, especially if you need it for an office, guest room, or other purpose, is the biggest benefit. But there’s also the extra closet, which means you’ll have more space for storing things like seasonal items. If your two-bedroom apartment comes with another bathroom, this is terrific for when you have company over, but that extra bathroom probably won’t get much use otherwise.
Make sure you include the extra utility costs and upkeep as you weigh the pros and cons. The more space you have, the longer it will take to clean your apartment. The more money it will cost to heat and cool the space, as well. And if you have an extra bathroom or laundry room, you will probably use more water. And then, of course, you have the cost of furniture, accessories, and all the required items for the space (for an office, that could be lamps and bookshelves; for a bedroom, you’ll need extra bedding and pillows).
Is a bigger apartment worth the move?
In addition to the extra rent, utility costs, and furniture, you’ll need to budget for moving expenses. Factor in the time and energy it will take to pack all your belongings and unpack in your new apartment. You’ll also want to consider the fees associated with moving, such as first and last months’ rent, the security deposit, any additional fees (like pet fees), and the cost to transfer utilities.
As a rule, you want to save up about three times your rent to cover moving expenses. You may need more if you are hiring professional movers, moving long distance, or need to purchase furniture. A little extra also comes in handy for those unexpected costs (such as needing cleaning supplies or purchasing lunch for friends who helped you move).
Create a Budget for Your New Apartment
Now that you have a target amount in mind, it’s time to start saving for that two-bedroom apartment! First, start by tracking your spending for a few weeks. This will let you see where you are spending, making it easier to determine where to cut. For example, you might not realize how much you spend per week at your favorite coffee shop until you start tracking it.
Now, figure out where you can save. Perhaps it’s a simple change, like making your coffee at home. Review your cell phone plan. Since Wi-Fi hotspots are so common now, you probably don’t use as much data as you think. If you aren’t using the data that you are paying for, consider going with a cheaper plan. You might also want to drop your cable provider and use streaming services instead.
Cutting back on utilities is another great way to save some money every month. Unplug appliances that aren’t in use, turn off lights when you leave the room, and adjust the thermostat so that your air conditioner or heater isn’t constantly kicking on. Utilize your apartment community’s amenities. Instead of paying a gym membership, use the community fitness center instead.
Cut down on the amount you order in or dine out, and don’t purchase frozen or pre-packaged meals. Instead, plan your menu for the week and make a grocery list. Purchase just those groceries and nothing more. This is because the average American spends almost $450 a month ($5,400 a year) on impulse purchases, according to a survey by Slickdeals. A whopping 70 percent of those impulse purchases are on food items.
Make it a policy not to shop (grocery or otherwise) when you are hungry. It’s scientifically proven that people buy more when they are hungry — even on purchases that aren’t food. Other ways to save include using coupons, cutting down on entertainment costs or finding free entertainment, buying generic rather than brand-name products, and selling things you no longer want or need.
By making a few minor adjustments in your spending, that two-bedroom apartment could quickly become a reality. Start shopping for your new apartment and get ready to enjoy all your extra space!
Published November 24, 2020
