Housing Financial — Renting an Apartment

Renting an Apartment

So you’ve decided that renting an apartment or house is the right option for you. It’s also a big step and signing a lease is a commitment. It’s important to find a home that fits within your budget and allows you to feel safe and comfortable.

There are a number of important things to consider and plan for before you sign a lease.

  • Rent—How much rent can you afford? Before you even start looking for an apartment, figure out how much rent you can afford to pay each month. As a general rule of thumb, your rent shouldn’t be more than 25 percent to 30 percent of your gross income (your income before taxes).
  • Utilities—You also need to factor in any utilities you’ll be responsible for in your new place. Electricity, gas, trash, water—the costs can add up. Be sure to ask your landlord what—if any—utilities are included in your rent and call the utility companies to ask how much you might expect to pay for those that are not.
  • Security deposit—Most rentals require a one-time security deposit when you sign your lease. The deposit is generally equal to one month’s rent. The landlord keeps the deposit to pay for any damage you might cause. If there’s no damage at the end of your lease, you usually get the money back.
  • Credit/Background check—Be aware that your potential landlord may run a credit check on your finances, call your employer to confirm your income, and do a background check. If your credit isn’t great, the landlord may require you to get a co-signer for the lease (but you are still fully responsible for paying the rent).
  • Terms of the lease—A lease is a legal and binding contract. Before you sign on the dotted line, be sure you read and understand everything it says. It should lay out all the details—including your rent, due date, any utilities that are included, and even repairs that your future landlord may have said would be done before you move in. Not all leases are the same, so take the time to read it.
  • Renter’s insurance—So you’ve found your place and signed a lease. Now it’s time to get in touch with an insurance agent and sign up for renter’s insurance. It’s inexpensive and it can save you thousands. It’s a “must have” for all renters.

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