July 10, 2017
If you've been browsing around home-hunting apps lately in search of a new place to rent, you may want to put your phone down. The decision to stay put for a while could save you thousands of dollars.
A new report from Zillow highlights the advantages of lease renewals in cities around the country, finding that Philly residents have a relatively high incentive to stick it out at their current apartments rather than search for something better.
"Landlords typically raise rents at a slower rate for renewing tenants, so people are bound to save some money by sticking around — but who knew it would be enough to pay for another couple months of rent?" the report asks.
The cost of moving can be substantial in the long run. At the national level, renters who switched households within the past year paid 47 percent more in rent in 2015 than those who renewed their leases for a period of at least five years. That's an annual average of $3,946.
Whether or not renewing is always to a renter's advantage depends heavily on the market. As the report points out, cities with high-paced rent growth — Los Angeles, Sacramento and Seattle, for example — offer the greatest savings for renewing a lease over a longer period. Other markets such as Las Vegas had an average renewal increase of 6 percent on rent in 2015, meaning it might have been wiser to get a new place with comparatively slower rent growth of 2.4 percent on average that year.
For Philadelphia renters, the benefits of renewing are clear. Over a five-year period, based on current projections, renters who keep their apartment will save a total of $3,791. True, there are plenty of shiny and enticing new apartments going up in every corner of the city, but it might make the most financial sense to stay where you are, if possible.
Take a look at how Philly stacks up against other cities in Zillow's graph here.