Whether you’re a young adult about to live on your own for the first time, or you’re going from mortgage to monthly rent in a new neighbourhood, you need to be prepared before you begin your apartment search. Finding the right place at the right price is no easy task, but it doesn’t have to be too overwhelming. Once you’ve figured out what you can afford, all you need to do is find the right apartment, agree to the terms of the lease, and then sign on the dotted line.
To find a perfect apartment or rental home and make your search easier, there are a number of steps you can take to ease the burden and speed up the process.
Tips for finding a new home to rent
1. Determine affordability
The US Census Bureau suggests that your monthly rent should not exceed 20% of your monthly income, a maximum of 30%. For example, if you bring home $ 4,000 each month, you should limit your search to around $ 1,200. Taking the time to update and fine-tune your personal budget before you start looking for apartments can not only help you determine your price range, but also identify areas of your personal finances where you can cut back if you want to spend. more for an apartment. more expensive apartment. After looking at the numbers, you may decide to eliminate that expensive TV subscription to allow yourself more leeway in your budget for the right location.
Create your budget with a simple spreadsheet or an online service like Mint or PearBudget. Itemise your income and expenses down to the last penny, from fixed obligations like phone bills, student loans, and car payments, to variable monthly costs like groceries, entertainment, and clothing. You can lower your food bills by cutting coupons and save money on your cable, smartphone, and internet by consolidating all three services under one provider. These small moves can really add up and give you the funds you need for your future home.
2. Lower rental costs
There are several things you can do to find a lower monthly rent:
- Look outside of an urban area. While living downtown might seem like a priority, it doesn’t mean much if you can’t afford the rent. Instead, check out suburban apartments within a convenient commuting distance to work.
- Think about transportation costs. Urban areas generally require a smaller transportation budget, as you will likely be able to take public buses or the metro to get around. However, you still need to factor in transportation costs, whether it’s a bus pass or money for gas, if you choose to live far from the city center.
- Find a roommate. You can halve the price of any apartment just by sharing it with someone. You need landlord approval before you do this, but having a roommate can significantly reduce the financial pressures of renting. Just make sure you have a written agreement with your roommate that spells out all the obligations.
- Check the grants. The US Department of Housing and Urban Development (HUD) regularly offers grants to people with low-income jobs who cannot pay their rent. Search the HUD website to find affordable housing or see if you qualify for grants.
- Think small. The square footage is very important in an apartment, especially the number of rooms. Going for an office or a bedroom can mean wasting space, but it makes up for huge savings month after month. Evaluate the space you actually need based on your lifestyle, visitors, pets, and storage space. You might be happier paying less for a smaller room.
- To negotiate. Unless you’re looking for an apartment in a popular area with little change in tenants, many landlords are willing to negotiate. Check out the rates for comparable apartments with similar amenities in the area and bring your research with you for a better deal. You can also offer to pay rent for a longer period at a time (a landlord can lower the rate if they pay three or six months at a time) or choose to sign a longer lease for a better overall deal.
3. Add tenant insurance
For some, tenant insurance is an option, but for the vast majority, it is required by the landlord. Either way, you need to add it to your budget. It covers losses in the event of theft, and also helps cover your landlord if you damage the property. A landlord insures the building, but tenant insurance covers what is actually inside.
Fortunately, it is quite affordable. Rates depend on location, amount of coverage, and amount of rent paid, but on average, you can expect to pay around $ 500 per year with $ 25,000 coverage, or about $ 12 to $ 15 per year. month.
4. Perform a credit check
Many landlords perform credit checks to see if there are any obvious issues with potential tenants, such as unpaid bills or bankruptcy. You can also expect a background check. While homeowners do these checks before they approve you, it’s actually a good idea to request your own free credit report yourself. This way you can check for potential obstacles and dispute any bugs you might find.
The FTC requires that the three credit bureaus (Equifax, TransUnion, and Experian) provide a free credit report each year. It’s free for you and won’t affect your score if you request it, but it takes about three weeks to receive the report.
5. Start hunting
Don’t leave your apartment search to the last minute. In a perfect world, this should start about three months before your “move in” date. Many current tenants must notify their landlords of vacant units in advance; most areas require tenants to give at least 30 days notice, but many provide more.
While the features you want in an apartment are specific to you and your lifestyle, there are several basic things to look for:
- Price. Avoid looking for apartments that are outside your budget. Landlords are unlikely to reduce the rent, and you might end up spending too much money or be disappointed if you can’t afford the apartment of your dreams. Instead, set a firm number and only look for places that fit your budget.
- Transport. If you currently don’t have a car, check how close each potential apartment is to public transport. An apartment can be well priced and located in a nice neighbourhood, but if you have to spend most of your time walking or hailing a cab, it might not be as appealing. Additionally, you need to factor the cost of transportation into your budget to get a realistic idea of the true cost of an apartment.
- Convenience. Choosing a well-located apartment can make your life easier. Find a location close to work, shopping, transportation, and amenities like a laundromat.
- Security. Not only should an apartment be located in a safe neighbourhood, but landlords should make an effort to make sure their tenants feel safe inside. Appropriate locks on each door, private entrances and security should help you feel better about the rental.
6. Collect your deposit
Many landlords require a down payment, which usually includes the first and last month’s rent, as well as a security deposit equal to one month’s rent. So if you’re spending more than $ 800 a month on new housing, you need $ 2,400 ready to go when you actually sign your lease. The landlord obviously withholds your first and last month’s rent, but your security deposit is usually refunded if you leave the property as you found it. Otherwise, it can be applied to maintenance, repair and cleaning.
While you don’t need to pay the landlord a security deposit until you sign the lease, it’s still a good idea to have the amount saved in your bank account. That way, you won’t lose a potentially perfect apartment to a better prepared tenant just because you didn’t have the money.
7. Prepare documentation
Homeowners take substantial financial risk if they don’t carefully vet every candidate. Therefore, in addition to credit and background checks, some may require additional documentation. Gather the following documents and keep them before your research:
- Letter of employment. The owner should know that he has a paid job and can make monthly payments based on his salary. This letter should be printed on company letterhead and include a statement that you work there, the length of your employment to date, and your monthly or annual salary. It must be signed by a supervisor.
- Pay slips. They corroborate the information contained in the employment letter.
Income statements. If you are self-employed, income tax returns for the past several years should suffice instead of pay stubs. You may need to provide additional explanation as to what you do for your job and how much you earn annually.
- Reference letters. A landlord wants to know that you are a good tenant. If you have rented before, ask for reference letters from previous owners explaining that you paid the rent on time and that you took good care of the property. If you’ve never hired before, ask for letters from past employers or acquaintances who can confirm that you are responsible and honest. Just make sure they’re from people who aren’t related to you; your mother’s enthusiastic recommendations won’t work.
8. Talk to tenants
While you want to make a good impression on the owner, you also need the owner to make a good impression on you. The best way to find out if you really want to live in a certain property is to talk to current and past tenants. Overall, you want a courteous, reliable owner who takes care of maintenance issues quickly. Learn about tenant turnover, infrastructure issues, and complaint response times.
This is also a great time to learn about living expenses in the area, especially if you are moving to a new neighbourhood. Current tenants can give you insight into what they’re spending on transportation, utilities, and entertainment, as well as neighbourhood information, such as where to eat, the location of specific school districts, and the best. local amenities.
9. Take a walk
Do not sign this contract yet. Once everything has been checked and you are happy with the apartment, location and owner, you need to take one final round before signing on the dotted line. Since previous tenants may have caused damage or maintenance issues, you need to make sure that you are not responsible for issues that are not your fault.
Prepare and check the following:
- Turn on lights and faucets and flush the toilet throughout the apartment to make sure they are working properly.
- Check for rodent or insect infestations, especially in closets and storage areas. Chewing marks or feces are a major red flag.
- Take a cell phone charger with you and plug it into electrical outlets to make sure they all work.
- Check smoke detectors and look for fire safety equipment like a fire extinguisher in the kitchen.
- Open and close and lock and unlock doors and windows.
- Turn on all included devices to make sure they are working.
- Examine the floors and walls for any damage. Carpets, hardwood, linoleum, drywall and tiles should be inspected.
- Take photos of problem areas with a digital camera and show them to the owner. Keep the file so that if there are any maintenance discrepancies or problems recovering your security deposit when you move in, you have proof that you did not cause the damage.
10. Read and sign the lease
Leases vary depending on the length and conditions of the contract.
- Recurring leases work best for shorter terms. With a recurring lease, the landlord recognises that his situation can change from month to month, which allows him to pay and renew his lease on a monthly basis. However, these leases can be more expensive, and since you must renew them every month, the landlord reserves the right to increase the rent at any time. You must give your landlord 30 days notice before leaving the apartment, so this arrangement is only best if you really need the space to live in the short term.
- The fixed-term lease is the most common. Make a contract with your landlord to stay in the apartment for a fixed period: three months, six months, one year, or even two years. In many cases, if you decide to move out, you are still responsible for paying the remaining term of your lease, whether or not you live in the apartment. However, that can mean locking in for a lower rate, which is great for long-term life situations. Sometimes landlords release tenants from their lease if a penalty is paid, so be sure to discuss the eventualities before signing.
- Subleases are leases between three parties. They often occur when a tenant has to vacate an apartment, but still has a lease with the landlord and is responsible for the rent. With a sublet, the original tenant finds another resident to take over the lease payments until the end of the term. The tenant then pays the landlord for the duration of the contract. Sublets must be approved by the owner, so if someone offers you a good deal at a low price, you might be wary.
Regardless of the term, your lease includes things such as the amount of the security deposit and the terms under which the landlord holds the deposit, the terms of the rental, how to notify the landlord that you are vacating the property, and the behaviour and issues that could result in an eviction, such as delay or non-payment, destruction of property or anything else the owner deems unacceptable.
Although the price of a rental is not negotiable, the lease often is. Sometimes you can negotiate the cost of utilities or have a guarantor sign as a co-signer if your credit score isn’t perfect. You can also negotiate the price if you have to go out to find services, like laundry, or pay more for transportation. Depending on the convenience and location of the apartment, as well as the current state of the housing market, you might get a break if the landlord really needs to rent the space.
While renting might seem like a litmus test in adulthood, it’s actually a lesson in responsibility. By doing your homework and gathering the appropriate documentation beforehand, you’ll know exactly what you can afford and what to expect during the process. After good preparation, you should be able to get an apartment and spend more time thinking about furnishings, decorating and housewarming; in other words, fun stuff.
What additional things should you take into account before renting an apartment?