When you get your first apartment or home, you might want to rent. After all, it will take you time to make money to afford a house. Nevertheless, renting has its own costs, and you have to budget for them. You don't want to spend money you realistically don't have. What are some of the things you need to consider when apartment hunting?
Rent is not Just One Cost
When you look for apartments or rental properties, you might start by looking at the rent cost set for certain properties. You might find something that fits your budget. However, the cost as advertised might not be the exact cost you end up paying. You therefore have to factor in other costs.
Landlords often have a right to impose fees and bills for items beyond the base rent. However, they must disclose these costs to you before you sign a lease. Therefore, you'll have time to figure out if you can afford them. Certain supplementary costs might include:
Furthermore, you might have to pay additional costs, separate from the rent, to occupy the space. These might include:
- Security and cleaning deposits. Usually you make a one-time payment to the apartment which they will return to you when you move out of the space. The landlord depends on this money to clean up or repair damaged parts of the property after you leave. Whether you get the deposit back (in full or in part) depends on how much the landlord must spend to fix the space.
- Pet deposits. If you have a pet, you might have to pay a percentage more in rent.
- Service fees. You might pay an additional fee (one-time or regularly) for certain services in the space. For example, you might opt for covered parking, a cleaning service, access to a gym or other services.
- Renters insurance: Most landlords require coverage. It will insure you for liabilities you present when occupying the property. Coverage can also apply to your possessions within the property.
- Power bills & water bills: Sometime, your rent will cover your utility costs. However, in other cases, you must contract with a water or electricity supplier separately.
In many cases, you will have to prove to the landlord that you have these services before you move into this property. You can often do research to find out about the average costs of these bills. That way, you can better anticipate what you will pay.
Most experts recommend that you should spend no more than 30 to 40 percent of your income on housing costs. To calculate this cost, multiply your total monthly paycheck by 0.3. Strive to pay a rent and utility cost somewhere in that arena.
Also Read: Understanding Your Rent Cost Obligations