A Comprehensive Guide For First-Time Renters
Lease agreement document with keys and pen
A Comprehensive Guide For First-Time Renters
Are you planning to rent an apartment for the first time? Moving out of your parents’ house can be quite overwhelming, especially if you’re not planning to have a roommate. For many, this is the time to exercise their freedom. However, one thing you might easily forget is the fact that it comes with a lot of responsibilities.
For one, you’ll be on your own, and every choice you make might affect many areas of your life. All utility bills will be under your name, and let’s face it, it really isn’t fun for someone who is not used to handling these types of expenses.
Nonetheless, you can still make a great experience out of your first apartment living. How? Read through this guide before signing your first-ever lease agreement!
- Work on your budget
One thing that many first-time renters find difficult is to come up with a comprehensive weekly, monthly, or annual budget. If you don’t take care of your financial side of things, then you might find it rough living in your first apartment. Again, it’s worth remembering that all the bills will be on you, not just the monthly rent. Therefore, your income should be able to cover everything and still leave you with a reasonable amount of savings.
So, how much should your first rent be? Well, it’s all dependent on your income. The rule of thumb is that your rent should never exceed 30% of your total income. For instance, if you’re making USD$1000 a month, the apartment or house you move into should cost you somewhere below USD$300. Of course, to be safer, you can work with anything between 25% for a start.
Remember, you might be required to pay a security deposit as part of your initial rent. The amount may vary from one apartment to another, but it’d be prudent to set aside almost the same amount as the monthly rent. For that reason, your budgeting should start even before you move into the new apartment.
It’d also be wise of you to save for an extra amount for your second and third months so that you can have enough time to readjust your lifestyle after moving in.
- Understand the lease
Signing your first lease comes with a lot of excitement, joy, and nervousness. It might be difficult to contain these feelings, but don’t ever rush into signing a landlord-tenant contract. Since it might be your first time coming across such a form, it’s important that you understand what it entails.
An ideal lease agreement contains seven essential clauses. First, it must identify the parties involved; in this case, the landlord and you as the tenant. It should also specify the type, location, and any other identifier of the property you’re renting. For instance, what’s the apartment number? Other clauses include;
- The rental term
- Rental amount
- Security deposits
- Tenant responsibilities
- Landlord and tenant signatures
You need to read and understand every word and phrase used in this form. Make sure you ask the landlord about any part you don’t understand. Remember, this is a legally binding document. Therefore, by signing it, you promise to uphold every section of the agreement. After finalizing the documentation, be sure to keep a copy of the lease agreement for reference.
- Take a tour
Now that you’ve found your favorite apartment, there are a number of things to do when moving to a new place. Of course, exploring and inspecting the apartment itself is important, but you should also consider walking around the neighborhood. Doing so will help you experience the surrounding environment first-hand. It’ll also give you an opportunity to ask questions regarding various crucial aspects.
For instance, when are the quiet hours within the area? Are there corners that are considered dangerous during late hours? Be sure to ask any burning question that’ll help you adjust quickly to the surroundings.
- Apply for a renter’s insurance
You probably already know the importance of insurance. However, the mistake that many first-time renters make is not ensuring their belongings. Disasters happen, and you never know when they’ll knock on your door. Therefore, the only way to have peace of mind is by getting a renter’s insurance.
So, what does a renter’s insurance cover? This insurance policy covers your belongings from loss due to fire, theft, and any other disastrous occurrence. It’s recommended that you buy enough insurance to help you replace all your properties in case of such losses. The best way to go about it is by calculating the value of all your belongings.
Also, you ought to note that there are two main types of renter’s insurance covers; replacement cost and actual cash value (ACV). The former will ensure that you get compensation large enough to replace your items at the current price rate.
ACV, on the other hand, only considers how much the items were worth at the time you bought them. As such, whatever is in the initial receipt is what will be compensated regardless of the current market price. For that reason, replacement cost covers tend to be more expensive than ACV. Whichever your option, just make sure that all your items are covered from the get-go.
Conclusion
Renting your first apartment can be very exciting and overwhelming in many ways. But as you enjoy the joy of freedom, know that it comes with responsibilities, and one of them is paying your monthly bills.
As a first-time renter, it’s important that you create a sustainable budget based on your monthly income. Once you have all your finances in order, find an apartment understand all that’s required of you as a renter.
Of course, you’ll be required to sign a lease agreement, which is a legally binding agreement. Be sure to read through it carefully before signing it. Another important thing to do as a first-time renter is to take a tour around the neighborhood to familiarize yourself with the environment. Oh, and don’t forget to take a renter’s insurance to cover all your belongings.
