When you move out on your own, there’s a good chance the first place you’ll live will be an apartment. Depending on your location, renting an apartment may be cheaper than buying, some come fully furnished, and frequently they are in convenient locations, close to shopping, restaurants or other sources of entertainment.
So, you’re ready to rent, but where do you start? The renting process may seem daunting at first, especially if you don’t know what to expect. But, a little bit of planning and preparation can go a long way in helping you get the best apartment for your needs.
Setting a budget
A general rule of thumb is that your rent should be no more than 30 percent of your total gross income - ideally, closer 20 to 25 percent. In addition, you need to determine if you will have enough money left over after paying rent to cover your other obligations. Consider your costs for transportation, food, insurance, debt payments, and other necessities before calculating how much you can afford to spend on an apartment.
If your budget is not enough for an apartment in your area, you might consider finding one or more roommates to divide the cost. However, keep in mind the difficulties they may bring, especially as you figure out how to divide chore responsibilities, handle joint costs, and share the space with each of your guests.
Additional costs of renting
As you are looking for apartments within your budget, remember some additional costs that may or may not be included in the rent. One of the largest costs is utilities, including electricity, heat, water and cable. If your rent does not cover these, you may be able to call the utility company with the apartment address to get an estimate of what the recent bills have totaled for that unit.
Consider other added costs like a garage or parking space and fees for having a pet in your apartment. On the flip side, make sure to factor in perks like a fitness center and pool, which may allow you to skip paying for a separate gym membership.
Signing a lease
You'll need to go through several steps before you sign a lease. The application could include items like verifying your employment, calling your personal references and examining your credit history. If you do not have a good credit history or solid employment, the landlord may require you to have a guarantor or co-signer on the lease with you.
When you sign a lease, be ready to put down some money. This may include a security deposit, the first month's rent, and sometimes the last month's rent. Find out what you need to do to get your security deposit back in full when you move out.
The last major thing to consider is the length of the lease. You are committing to live there for the entire lease term, and it is worth finding out what the penalties are for breaking the lease if you need to move. Some apartments will let you sublet to another tenant to finish out your lease, which can be helpful if you are not confident you'll stay at your current job.
Whether you are planning to get your first apartment or you are helping your son or daughter to move out and become independent, it is important to first ask yourself where to start. Planning and preparation can go a long way in helping you get the best apartment for your needs.
Think you might need to sharpen your budgeting skills now that you’re going to be a renter? Take this short quiz to test your budgeting knowledge.
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