Content of the material
- Set a budget
- Avoid a Fixer-Upper
- 7. REQUIRE RENTERS INSURANCE
- 6. Consider Which Floor You Want to Live on
- 2. Choose Your Neighborhood
- Beware of High Interest Rates
- Document damages and understand your lease before moving in
- 5. CREATE AND FOLLOW A TENANT SCREENING PROCESS
- Inspect the property
- Renters should visit a property at least once to check:
- 5. “I really wish I would’ve know that just because you can get into your apartment without any trouble doesn’t mean your furniture can!!”
- What is a bond?
- Rent with Confidence from Bay Property Management Group
Set a budget
First, estimate what your monthly income will be, factoring in savings, debt and recurring bills. Financial experts often cite that rent payments should not cost more than 28% to 35% of your monthly income. Online calculators can assist with budget estimates.
Be aware that broker fees may be involved, which is often a big surprise for first-time renters. Sometimes landlords pay for the broker fee, but in competitive rental markets like New York and San Francisco, broker fees are a typical expected cost for apartment seekers.
The broker fee is based on a percentage of one year’s lease, typically around one month’s rent. It could be well worth it, since working with a reputable broker allows you to see multiple legitimate properties at once. This is important during a time when fake listings online are common.
It is possible to negotiate down a broker fee. Slower times, like the dead of winter, will see a drop-in demand, so that may be a good time to ask a broker to bring down his or her fee. Because a broker fee could be as much as one month’s rent, don’t forget to account for that extra cost when you’re determining how much you can afford.
Avoid a Fixer-Upper
It’s tempting to look for the house that you can get at a bargain and flip into a rental property. However, if this is your first property, that’s probably a bad idea. Unless you have a contractor who does quality work on the cheap—or you’re skilled at large-scale home improvements—you likely would pay too much to renovate. Instead, look for a home that is priced below the market and needs only minor repairs.
7. REQUIRE RENTERS INSURANCE
We live in a lawsuit-laden land, so it’s important to arm yourself with knowledge and encourage your renters to do the same. By requiring renters insurance, you help avoid litigation if the renter’s belongings are damaged. In addition, renters insurance is generally low cost, so it’s a small financial burden most tenants can easily (and willingly) take on.
Note: it’s important to consult a legal professional before adding a clause to your rental agreement about mandatory renters insurance. Laws regarding this issue differ state to state.
6. Consider Which Floor You Want to Live on
The floor you choose in an apartment complex comes with their own pros and cons. A bottom floor apartment may prove cheaper than others, with less legwork to get to the main door and amenities. You also don't need to worry about a dog or children running around and disturbing neighborhoods below you. However, the views are usually the worst in the building.
Middle floors are often the most popular options and offer consistent temperature. Heat rises, making top floor apartments hotter. You also end up with decent views. Top floor apartments usually have the best views, but are often more expensive to rent and harder to cool down.
There’s no right or wrong answer when it comes to which apartment floor you should live on and depends on your personal preference. To narrow down your choices, here's a round-up of pros and cons on which is the best apartment floor to live on.
2. Choose Your Neighborhood
Narrowing down your dream neighborhood as a first time apartment renter can feel daunting. To narrow down your choices, consider the following:
- How close am I to work?
- Do I prefer driving, public transportation, or walking?
- Do I need quiet or want to live in the middle of it all?
- Is my dream location more expensive than surrounding neighborhoods?
- How far do I want to be from museums, restaurants, and attractions?
The more you can narrow down your preferences, the easier it is to settle on the perfect location for you.
Beware of High Interest Rates
The cost of borrowing money might be relatively cheap in 2021, but the interest rate on an investment property is generally higher than it is for a traditional mortgage. If you do decide to finance your purchase, you need a low mortgage payment that won't eat into your monthly profits too much.
Mortgage lending discrimination is illegal. If you think you've been discriminated against based on race, religion, sex, marital status, use of public assistance, national origin, disability, or age, there are steps you can take. One such step is to file a report to the Consumer Financial Protection Bureau or with the U.S. Department of Housing and Urban Development (HUD).
Document damages and understand your lease before moving in
When you’re ready to move into your new apartment, take photos of the empty space and document any damage you find. Make sure to ask questions about the terms of your lease and follow them to avoid eviction or legal troubles. For example, make sure your roommates are on the lease and take care to note what the lease says about subletters.
One of the conveniences of renting is that your landlord is responsible for much of what would normally fall on your plate as a homeowner. But, it’s important to make sure that you completely understand what is and isn’t covered by your landlord’s insurance (like your belongings, for example).
Often, you will be on your own to replace stolen or damaged personal property. Many landlords require their tenants to have renter’s insurance. Don’t consider this a burden. Between your landlord’s insurance and renters insurance from Nationwide, you can consider yourself protected from the majority of risks you’ll face as a renter.
Once you’ve moved in, keep your lease and all of your rental documents in a safe location. Then, enjoy your first new place!
5. CREATE AND FOLLOW A TENANT SCREENING PROCESS
The main goal of tenant screening is to help find quality tenants who will pay rent on time and take care of your property as if it were their own. To select responsible tenants, it’s important to filter out good potential tenants from the mountain of applications you might receive.
You should look for a tenant who can pay in full each month, doesn’t have a criminal history, and has a good rental background.
Inspect the property
It may sound like an obvious step, but some first time renters hunt for a house online and fail to inspect the property before signing a lease, only to find their dream rental property is a dud.
Renters should visit a property at least once to check:
- the property is not damaged
- the garden is maintained
- all current appliances, including ovens and heaters, are working
- the number of bedrooms is as stated.
Inspecting a rental also gives you the opportunity to get to know the agent and ask them for tips on how to put together a winning rental application, which could put you ahead of the competition.
Inspecting a property is a must before signing a lease. Picture: realestate.com.au/rent
5. “I really wish I would’ve know that just because you can get into your apartment without any trouble doesn’t mean your furniture can!!”
It’s a great idea to not just measure the living space in a unit but also measure the width of the doorways. Some buildings, especially older ones, have really narrow doors, and you don’t want to find this out the hard way on your move-in day.
What is a bond?
When signing the contract, you will be asked for a bond, which is a deposit that serves as security for the landlord or owner, in case you don’t meet the terms of your lease.
Your landlord may claim some or all of the bond for cleaning, repairs, or replacement of missing items at the end of your agreement.
The bond is held by an independent body. Picture: realestate.com.au/rent
The bond and rent are separate payments and often you will be asked to pay a certain amount of rent up front as well.
You cannot use any part of the bond as rent, which means when you move out, you can’t ask the landlord to deduct your final rental payment from your bond.
In Victoria, the bond is paid to the Residential Tenancies Bond Authority (RTBA), where it is held in trust until the end of your residential tenancy agreement.
Read more: 5 reasons renting can rock
Rent with Confidence from Bay Property Management Group
Apartment hunting as a first-time renter can be a daunting process. However, working with a reputable property management firm that can offer the latest listings in your area with helpful and dedicated leasing staff is a great place to start. At Bay Property Management Group, we understand the stress that moving can bring on and work with renters every step of the way to find them the perfect rental home.
After move-in, our experienced property managers use the latest technology to make rent collection, maintenance requests, and receiving documents a breeze. Visit us online to check out the newest rental listings in your target location today.