A report from Zillow, How to Save on Rent: Don’t Move, finds that renters who renew their lease typically pay less rent than those who move. In 2015, renters who moved in the past year paid 47% more in rent than those who had stayed in their current apartment for at least five years. The difference amounts to annual average savings of $3,946 for these long-term renters.
The author suggests that landlords typically raise rents at a slower rate for renewing tenants. The greatest savings for renewing renters are in some of the hottest markets where market prices are rising the fastest. In San Jose, CA, renters who remained in the same apartment for at least five years paid $9,266 less per year on average than renters who moved in the past year. The savings were almost as high in San Francisco and Boston.
Renters’ savings increased with the length of their stay. In Boston, renters who had been in their apartment for two years paid $943 per year less on average than recent movers, and renters who had been in their apartment for at least five years paid an average of $8,979 less. Boston’s hot housing market means that staying in the same unit, even for shorter periods, saves money for renters. Stays of two years or less, however, do not save money for renters in every market. In Las Vegas, renewal rents rose faster than new lease rents in 2015, making moves more cost-effective in the short term, not accounting for moving costs. But renters who had remained in the same rental unit for at least five years still had average annual savings of $842 compared to those who had moved within the past year.
The report’s findings are time-specific, meaning savings may not continue for those who remain in their current rental unit if the difference between renewal rents and new lease rents decline.
How to Save on Rent: Don’t Move is available at: http://bit.ly/2stVrAW.