Renting an apartment is one of the first things to tackle when moving out on your own. Like most things in life, being well-prepared can make the process much easier and more successful. This first-time apartment renter's guide will take you through everything you need to know about finding the right apartment for you.
If you are renting an apartment on your own for the first time, start by figuring out how much rent you can afford. This exercise is a really good way to get a clear understanding of how far your income will stretch for all your expenses, including rent, utilities, insurance, food, gas and any other debt payments you need to cover.
The average rent on one-bedroom apartments rose by about 3 percent nationally in 2019.
Most financial experts recommend that you spend no more than 30 percent of your gross (before tax) monthly income on housing. Many landlords state on rental applications that they want an applicant's gross income to be three times greater than the rent.
Read more: How Much Rent Can I Afford
The 50-20-30 rule is not just for renters. This is an overall budgeting recommendation for spending your after-tax income on specific expenses. According to this rule, 50 percent of your net income should go toward "needs" like rent and bills (such as utilities and insurance, car expenses, etc.), 20 percent towards savings and 30 percent towards "wants" like shopping, eating out, entertainment, hobbies and vacations.
Read more: Best Budgeting Tools For Renters
Would a studio, one-bedroom or two-bedroom be best for you? If you are planning on living by yourself, can you manage a studio? Living in a little less space will typically cost you less with everything, including rent, utilities and furnishings. Saving a couple hundred dollars a month can help keep your budget on track.
On the other hand, If you are planning on having a roommate, the additional expense of a larger place can be offset by sharing the cost of rent as well as expenses like utilities and groceries.
When picking a location to live, think about these five things:
Since this is the first time you are renting, your potential landlord or rental agent will be using your application and the documents you provide to predict what kind of renter you will be.
Read more: The Rental Application Process
This is not an exhaustive list, but a good guide for documents you will almost always need:
Along with your application, you will need to:
Once you have a handle on how much you can afford for rent and some solid options for apartment communities, it's time to fill out a rental application. You can expect the application to have questions about your current job and salary, where you have lived before and if you have a co-signer.
Some rental markets — like San Francisco, New York City and Los Angeles — are very competitive. If you find the apartment you want, don't delay in getting the application started, and you can expect competition.
In general, the higher the rent, the higher your credit score will need to be. If you have been paying your credit cards or car payment on time each month, that's a good indicator to a landlord that you will be able to manage your rent payment.
If you don't have a perfect credit score, you can still get an apartment, but you will need to go the extra mile to prove to your potential landlord you can pay your rent on time.
Read more: Can You Rent An Apartment With Bad Credit
Simply put, a lease is an agreement between a renter and the landlord that spells out the conditions of the rental, including when the lease is up, rent per month, leasing terms, when the rent payment is due and renewal or termination terms. State laws regulating leases are varied, which means leases vary too. It's important to take the time to read and understand the lease before you sign it.
Read more: Understand Your Lease Before Signing It
Leases can vary in term length but are typically one year or month-to-month. All the financial terms of the lease will be spelled out, including specifics on the security deposit required, if pets are allowed and any fees associated and how late fees are handled. The lease typically spells out the apartment complex regulations for parking, guests, pets, keys, painting and decorating, smoking and subletting. Most leases also require residents to have renters insurance.
Read more: Do You Need Apartment Insurance?
A security deposit is required by most landlords for protection in case their tenants fail to pay rent or cause damage to the property beyond normal wear and tear. Typically, a security deposit is equal to one month's rent. If you keep your apartment in good condition, your security deposit (or a portion of it depending on state law) should be returned to you within a certain time frame after you move out.
Read more: Security Deposits: What To Expect
Although renting your first apartment takes some effort, doing your homework ahead of time can help simplify and shorten your search and smooth out the process once you are ready to apply.
If you are renting in a major city, can help prioritize your search to get to your shortlist fast with search tools. Also, be sure to read first-hand reviews from other renters to get the real pros and cons of an apartment community from a renters' perspective.
The post Your One-Stop Guide for First-Time Apartment Renters appeared first on Apartment Living Tips - Apartment Tips from ApartmentGuide.com.
In this guide:
- How to prepare for renting an apartment
- How to apply to rent an apartment
- What credit score will you need to rent an apartment
- What is an apartment lease
- How to find the perfect apartment
How to prepare for becoming a first-time apartment renter
If you are renting an apartment on your own for the first time, start by figuring out how much rent you can afford. This exercise is a really good way to get a clear understanding of how far your income will stretch for all your expenses, including rent, utilities, insurance, food, gas and any other debt payments you need to cover.
Determine how much rent you can afford
The average rent on one-bedroom apartments rose by about 3 percent nationally in 2019.
Most financial experts recommend that you spend no more than 30 percent of your gross (before tax) monthly income on housing. Many landlords state on rental applications that they want an applicant's gross income to be three times greater than the rent.
Read more: How Much Rent Can I Afford
What is the 50-20-30 budget rule?
The 50-20-30 rule is not just for renters. This is an overall budgeting recommendation for spending your after-tax income on specific expenses. According to this rule, 50 percent of your net income should go toward "needs" like rent and bills (such as utilities and insurance, car expenses, etc.), 20 percent towards savings and 30 percent towards "wants" like shopping, eating out, entertainment, hobbies and vacations.
Read more: Best Budgeting Tools For Renters
How much space do you need?
Would a studio, one-bedroom or two-bedroom be best for you? If you are planning on living by yourself, can you manage a studio? Living in a little less space will typically cost you less with everything, including rent, utilities and furnishings. Saving a couple hundred dollars a month can help keep your budget on track.
On the other hand, If you are planning on having a roommate, the additional expense of a larger place can be offset by sharing the cost of rent as well as expenses like utilities and groceries.
Consider where you want to live
When picking a location to live, think about these five things:
- Proximity to work or school. If it's close, you may be able to walk. If it's further away, you'll have to drive or take public transportation which could be an extra cost.
- Transportation options. Scope out the subway, train or bus options.
- Neighborhoods. Get a feel for the vibe of the neighborhood as well as local restaurants, stores and businesses.
- Safety. Pay attention to things like parking and lighting. Neighborhood apps are great investigation tools as well to get the skinny on crime or other safety issues.
- Convenience to neighborhood attractions. Whether it's bar hopping, dancing, sports or chess club, make sure the fun in your life is convenient and accessible.
How to apply to rent your first apartment
Since this is the first time you are renting, your potential landlord or rental agent will be using your application and the documents you provide to predict what kind of renter you will be.
Read more: The Rental Application Process
Documents first-time renters will need
This is not an exhaustive list, but a good guide for documents you will almost always need:
- Photo ID (driver's license or passport)
- Verification of current employment and salary
- Copies of your last two pay stubs
- Copies of your last three bank statements
- Copies of your last two tax returns
- Copies of your last two W-2 forms
- Contact information (your social security number, email and current address)
- Personal and/or professional references
- Co-signer application (if applicable)
Helpful tips for application extras
Along with your application, you will need to:
- Authorize a credit check including your credit score (the renter typically covers the cost)
- Give consent for a background check
- Pay an application and/or processing fees
Filling out a rental application
Once you have a handle on how much you can afford for rent and some solid options for apartment communities, it's time to fill out a rental application. You can expect the application to have questions about your current job and salary, where you have lived before and if you have a co-signer.
Some rental markets — like San Francisco, New York City and Los Angeles — are very competitive. If you find the apartment you want, don't delay in getting the application started, and you can expect competition.
What credit score will you need to rent an apartment?
In general, the higher the rent, the higher your credit score will need to be. If you have been paying your credit cards or car payment on time each month, that's a good indicator to a landlord that you will be able to manage your rent payment.
If you don't have a perfect credit score, you can still get an apartment, but you will need to go the extra mile to prove to your potential landlord you can pay your rent on time.
- You may need to secure a co-signer. A co-signer is not just giving you a thumbs up as a potentially renter. A co-signer assumes financial and legal responsibility for paying the rent if you don't.
- Be prepared with a copy of your credit report and recent paycheck stubs. You may need to explain any blemishes on your credit report and what caused a hiccup in your credit history.
- If you can manage it, pay two or three months rent up front in a lump sum payment. This should give the landlord more assurance that you will be a good tenant despite recent financial difficulty.
Read more: Can You Rent An Apartment With Bad Credit
What is an apartment lease agreement?
Simply put, a lease is an agreement between a renter and the landlord that spells out the conditions of the rental, including when the lease is up, rent per month, leasing terms, when the rent payment is due and renewal or termination terms. State laws regulating leases are varied, which means leases vary too. It's important to take the time to read and understand the lease before you sign it.
Read more: Understand Your Lease Before Signing It
Leases can vary in term length but are typically one year or month-to-month. All the financial terms of the lease will be spelled out, including specifics on the security deposit required, if pets are allowed and any fees associated and how late fees are handled. The lease typically spells out the apartment complex regulations for parking, guests, pets, keys, painting and decorating, smoking and subletting. Most leases also require residents to have renters insurance.
Read more: Do You Need Apartment Insurance?
Security deposits
A security deposit is required by most landlords for protection in case their tenants fail to pay rent or cause damage to the property beyond normal wear and tear. Typically, a security deposit is equal to one month's rent. If you keep your apartment in good condition, your security deposit (or a portion of it depending on state law) should be returned to you within a certain time frame after you move out.
Read more: Security Deposits: What To Expect
How to find your dream apartment as first-time renters
Although renting your first apartment takes some effort, doing your homework ahead of time can help simplify and shorten your search and smooth out the process once you are ready to apply.
If you are renting in a major city, can help prioritize your search to get to your shortlist fast with search tools. Also, be sure to read first-hand reviews from other renters to get the real pros and cons of an apartment community from a renters' perspective.
The post Your One-Stop Guide for First-Time Apartment Renters appeared first on Apartment Living Tips - Apartment Tips from ApartmentGuide.com.