If you are a young professional, you probably have a budget. Your first home or apartment, thus, will likely be a rented one. Rental homes usually make it possible for you to afford a home, even on a first-time income. However, they will come at a cost. What should you expect to have to pay in your rental?
Make sure you factor the following items into your monthly budget. Therefore, you'll be more financially secure down the road.
1. Base Rent
You rent is the fee you pay to occupy the property. It will vary from property to property, and unit to unit. You'll usually pay the rent once per month.
Expect changes in rent over time. It is not uncommon, for example, for landlords to increase rent each year to adjust to inflation.
Never attempt to rent a property you cannot afford. Otherwise, you run the risk of defaulting on the lease and facing eviction. This might eliminate your ability to rent again in the future. Generally, you should not pay more than about 25 percent of your income for rent.
2. Rental Fees
Alongside your base rent, you'll often face other supplementary charges. Some of these might include:
- Pet rent supplements
- Late payment fees
- Cleaning and security deposits (you will likely receive a portion of this back on move-out)
- Trash collection fees
- Utility costs, such as standard electric, gas and water bills. Some individuals will pay utility costs within their rent. Others must pay these costs separately.
Your lease will usually list these costs separately. Therefore, you'll know when to expect them.
3. Renters Insurance
Often, your landlord will require you to carry renters insurance. This is a supplementary cost that is your responsibility to maintain.
However, having a policy will likely prove very protective. In case of a problem inside the rental, it might cover your financial challenges that result. Most policies will contain:
- Liability Coverage to insure the damage you do to others. For example, if you cause a fire in the kitchen, you can use your coverage to repay the owner. After all, it was their property you damaged.
- Possessions Insurance pays for damage to your own belongings in the home. Therefore, you can replace your belongings in case they sustain damage.
Most renters policies are quite affordable. Usually, they run under $50 per month for single apartments. Even so, it's up to you to be honest with your Insurance Discounters of Texas agent. Tell them the value of your property, and make sure they understand any liabilities. They can make certain you get adequate coverage for potential losses.
Also Read: How Do Roommates Impact Insurance Coverage?