A lot of renters may wonder why it's so difficut to save a down payment for a house. One answer is that the economics of renting rewards big spenders. The more you pay in monthly rent, the more space your dollar buys.
A survey encompassing more than 84,000 units in large apartment complexes found that the average rent for a 509-square-foot studio apartment in Orange County was $651. Paying just 8.8% more, or $708 per month, buys 40% more space in a one-bedroom unit. A studio renter who upgrades to a three-bedroom place pays 55% more rent, or an average of $1,012 per month, but gets 137% more space.
Landlords, however, look at the issue from the other end of the telescope. Why build big, roomy apartments when smaller units are more profitable? Consequently, of the apartments in the survey, more than 95% had two or fewer bedrooms.
Almanac / Economics of Renting 4 Bedroom Average Monthly Rent: $998 Cost Per Square Foot: $0.70 3-Bedroom Average Monthly Rent: $1,012 Cost Per Square Foot: $0.84 2-Bed,2-Bath Average Monthly Rent: $895 Cost Per Square Foot: $0.88 2-Bed, 1-Bath Average Monthly Rent: $780 Cost Per Square Foot: $0.86 1-Bedroom Average Monthly Rent: $708 Cost Per Square Foot: $0.99 Studio Average Monthly Rent: $651 Cost Per Square Foot: $1.28 Vacany Rates Studio: 3.1% 1-Bed: 3.2% 2-Bed, I Bath: 3.9% 2-Bed, 2-Bath: 3.9% 3-Bed: 3.7% 4-Bed*: 7.2% *Note: This figure may be exaggerated by the small number of 4-bedroom units in the sample. The7.2% rate represents only six vacant apartments. Configuration Mix Studio: 6.9% 2-Bed, 2-Bath: 35.6% 2-Bed, I Bath: 13.8% 1-Bedroom: 39.3% 3-Bedroom: 4.3% Note: 4-bedrooms account for 0.1% Average Apartment Size In square feet Studio: 509 1-Bed: 715 2-Bed, 1-Bath: 902 2-Bed, 2-Bath: 1,014 3-Bed: 1,206 4-Bed: 1,432