In recent years, renting has become more popular than at any other point in the last 50 years. While the American Dream usually involves buying a home to call your own, over 35% of households are renting, not owning, their property.
For some, this may be due to necessity, but for others, renting is a choice. Increased flexibility, lower maintenance costs, and access to special amenities can make renting a home an option many wouldn’t want to pass up.
No matter your reasons for renting, there are a few tips worth considering before signing the lease for a property. Read on for seven essential renter tips to help you prepare for your next home.
1. Add Cushioning to Your Budget
Just like owning a home and getting a mortgage, renting requires a careful budget and financial plan. This you likely already know. But like many, you might make the mistake of overlooking some key costs that could surprise you later.
Renting a home may save you money, typically offering more bang for your buck compared to owning a home. But that doesn’t mean it can’t get pricey, especially if you’re not careful.
Start by budgeting how much rent you imagine you can afford each month. Some recommend spending no more than 30-35% of your monthly income on housing.
Then, factor in extra costs, including:
- deposits and other initial fees
- moving costs
- costs of appliances and other essentials
- renter’s insurance (more on this later)
- maintenance costs (if applicable) of the property
- parking fee (if applicable)
These costs can vary greatly, depending on the rental property. It’s crucial, then, to look beyond the basic monthly rental cost to truly understand how much you can afford in your budget.
2. Build Your Credit
For some, a poor credit score may be one reason why they’re shying away from buying a home. After all, bad credit can affect mortgage interest rates and even bar you from many loans.
But bad credit can also impact your options when looking at rentals too. Many property managers use tools like Rent Safe to perform a background check and screen your credit history. And if they don’t like what they see, they won’t hesitate to turn you away.
One of the most important tips for renting is to build your credit so you can get the rental property you want. This is especially true in more competitive areas, where a credit score of at least 700 is the norm.
To build and improve your credit score, start using a credit card that you pay back in full every month. If you have any other debts, be sure to pay them regularly and in the highest amount your budget will allow.
If you’re still struggling with an embarrassing credit score, prepare to have a co-signor when applying for properties.
3. Do Your Research
It’s much easier to move out of a bad rental property than a home you own. Still, it’s stressful and costly to jump from apartment to apartment each time you run into trouble.
Plenty of research can ensure you choose a comfortable and safe home to rent.
If you’re searching in a large area and comparing options across neighborhoods, research the neighborhoods and their reputations online. Online forums like Reddit can offer subjective yet honest information that can help during your house hunt. And you can also turn to websites with crime maps and school ratings to judge the safety and quality of life in an area.
When you start to narrow down your rental options, check online reviews of the leasing companies for any red flags. If reviews repeat the same issues and complaints, you may want to look into alternative options instead.
Finally, take your research offline and view the area and property yourself. If possible, check out the rental and surrounding area both in the day and at night.
Pay attention to the people who live in the neighborhood, noise levels, and cleanliness. Gauge how comfortable and safe you feel in the area and if it feels like a place you’re eager to return to.
Also notice details like traffic in the area and your commute time. These factors are often overlooked, but they can make a huge impact in your daily life after moving.
4. List Your Must-Haves and Deal-Breakers
You may think that an open-minded approach is best. But in most cases, it’s actually smarter to have a clear idea of what you want (and don’t want) before you rent.
Rental properties can be a mixed bag of positives and negatives. And knowing which you’re okay with, which you absolutely need, and which you can’t possibly live with is essential.
Everyone’s list of must-haves and deal-breakers will be unique. If you’ll be living with a roommate or family, be sure to compare yours with theirs and negotiate where needed.
For inspiration, here are some common must-haves for renters:
- large space (such as a minimum square footage or a specific number of bedrooms)
- outdoor or balcony access
- in-unit washer and dryer
- community space
- a gym, pool, or other recreational amenities
- elevator and/or ramp accessibility
- age restrictions (such as senior only)
- doorman or other security features
- garage or parking space
Just as important as must-haves are deal-breakers. Some common deal-breakers to consider include:
- small space or one-bedroom/studio apartments
- high-crime neighborhood
- cleanliness issues and/or infestations
- no laundry facilities
- no air conditioning
- located far from work
- no bathtub (standing shower only)
- no parking space
Be sure to keep your expectations realistic, especially for your desired area and budget. And remember your list of must-haves are exactly that: must-haves. Separate these from your nice-to-haves when searching for rentals.
5. Work With a Real Estate Agent
Once you have a clear idea of what kind of rental home you’d like, along with your budget, must-haves, and deal-breakers, consider working with a real estate agent. They can find options that fit your guidelines and preferences, saving you precious time in the process.
It’s especially worthwhile to use a real estate agent if you’re renting a house (which can be harder to do on your own compared to renting an apartment) or renting in an unfamiliar area.
They may be able to locate properties that aren’t yet listed for rent, giving you the best access. And they can also negotiate contracts for you and defend you if you have bad credit.
In most cases, working with a real estate agent is free for renters. Save yourself time and stress by skipping the DIY approach in favor of working with a professional agent.
6. Read (and Reread) Leasing Agreements
If you’ve finally reached the stage of finding a property you want to rent, it’s time to read your leasing agreement.
Don’t sign anything until you’ve carefully reviewed all contracts. Make sure they abide by local laws, and watch out for any vague language. When in doubt, ask a lawyer or your real estate agent for clarification.
Also check rules relating to fees, such as late fees or damage costs. And consider how the terms may affect you in the long-run. For example, if your lease states you can’t have a pet but you hoped to get a dog, ask yourself if it’s worth the sacrifice.
In some cases, you may also be able to negotiate terms you don’t agree with. Don’t assume everything in writing is concrete (that is until you sign it, at least). Some landlords are willing to make adjustments and create a new agreement with more mutually-beneficial terms. Don’t be afraid to ask, and hold off on signing until you feel confident in doing so.
7. Consider Renter’s Insurance
Some landlords or properties require renters to have renter’s insurance. Whether yours does or not, it’s worth considering the benefits of insurance.
Renter’s insurance is often inexpensive, yet it can save you thousands.
Insurance can cover the cost of your possessions if you’re the victim of theft, a house fire, or a natural disaster (in most cases, though some exclusions may apply). You can also be reimbursed if an injury occurred in your rental.
Accidents and crimes can happen anywhere, but renter’s insurance can help to safeguard your home and protect you from major financial loss.
Renter Tips to Keep in Mind
Whether you’re a first-time renter or you’ve rented properties before, there are a few key points to keep in mind.
Use these seven renter tips when looking for your next home to help you feel comfortable and cozy in your rental.
To furnish and decorate your new space, be sure to read our shopping articles for inspiration!