Being a renter comes with its challenges, and it can be difficult to stay financially ahead while managing the costs of rent, utilities, and other living expenses.
That said, having a solid understanding of key aspects related to renting will allow you to make the most of your tenancy and help tackle any potential challenges that may arise during your stay.
To help you keep things in your favor financially as a tenant, we have compiled a list of ten practical tips for renters to manage their finances, stay within their budget, and protect what they value:
- Negotiate your rent;
- Manage your budget;
- Get renters insurance;
- Read your lease carefully;
- Document the condition of the rental before and after moving out;
- Keep up with maintenance;
- Don’t withhold rent if the landlord is not making repairs;
- Communicate with your landlord;
- Save for emergencies;
- Give notice to vacate.
Now, let’s examine these points in more detail.
Negotiate your rent
Research the market to see what comparable properties are renting for. If you find similar properties in your desired neighborhood renting for less than you’re being asked, use this information to negotiate a lower rent.
If you believe that the rental price for an apartment is unreasonably high, don’t overpay. Instead, conduct thorough research and exercise caution to ensure that you find an apartment that meets your needs rather than settling for the first option available.
Try again later
Manage your budget
Losing your housing can substantially impact your ability to maintain stability in other areas of your life. It is, therefore, imperative that you take no chances when it comes to your housing situation.
When looking to rent an apartment or house, the first step is to determine a reasonable budget for rent. One popular benchmark for this is the 30% rule, which suggests allocating no more than 30% of your monthly gross income toward housing expenses.
Alternatively, you can use the 50/30/20 budget rule as a reference to figure out how much you can allocate to rent. This technique suggests dividing your take-home pay into three categories: 50% for essential expenses, 30% for nonessential spending, i.e., wants, and 20% for savings and debt repayment.
To calculate your rent-to-income ratio, divide your monthly rent payment by your monthly gross income. For instance, if your monthly rent is $750 and your monthly gross income is $3,000, your rent-to-income ratio is 25%.
Remember, when money is tight, rent should be given the highest priority on your list of expenses, as loss of housing can significantly impact your ability to maintain stability in other areas of life.
Get renters insurance
As a renter, purchasing a renters insurance policy is typically a wise decision, regardless of whether your landlord mandates it or not. For an affordable price, renters insurance will protect your personal property, cover temporary living expenses and provide liability coverage in case of unexpected events.
Renters insurance can provide valuable protection for a relatively low cost. And while the exact cost of renters insurance can vary depending on factors such as location, number of previously filed claims, coverage limits, and deductible amounts, the average price is typically accessible for most renters.
In fact, according to insurance company Lemonade, the average renters insurance cost is pretty affordable, around $18 per month. And given the potential financial impact of unexpected events such as theft, fire, or natural disasters, the cost of renters insurance is a small price to pay for peace of mind and protection from significant financial loss.
Read your lease carefully
Make sure you read your lease carefully before signing it. Look for any hidden fees, such as maintenance, parking, or late fees. Ask your landlord for clarification if you need help understanding something in your lease.
Document the condition of the rental before and after moving out
Taking detailed notes of the condition of your rental unit during move-in and move-out can serve as evidence in the event of unjustified damage charges. To lawfully collect a deposit, landlords are obligated to provide tenants with a move-in checklist. Ensure you meticulously fill in the checklist to document any pre-existing damages during move-in and have it signed by the landlord.
Additionally, even though landlords are not obligated to conduct a move-out walkthrough, it’s wise to request one before leaving the unit. This will provide you with a better understanding of the charges the landlord may impose.
Keep up with maintenance
It’s essential to keep up with the maintenance of your rental property. This includes things like changing air filters, cleaning out gutters, and keeping the property clean. By keeping the property in good condition, you can avoid potential charges for damages or repairs when you move out.
Don’t withhold rent if the landlord is not making repairs
On the other hand, if something included in your rent is not functioning correctly, such as a stove, fridge, plumbing, or electrical, inform the landlord and request repairs. This is not considered ‘complaining’ since these basic facilities should be in working order as part of the rental agreement.
However, withholding rent from the landlord is not a good idea, even if repairs are not being addressed, and will make you vulnerable to eviction.
Communicate with your landlord
If you have any concerns or issues, communicate with your landlord. Don’t wait until the last minute to report a problem, as it may become more expensive to fix if left unaddressed.
Save for emergencies
Make sure you have an emergency fund saved up. Unexpected expenses can arise, such as a sudden job loss or a health emergency, so it’s crucial to put aside some money to cover these expenses.
Give notice to vacate
Make sure to familiarize yourself with the details of your lease agreement and review the break lease clause. This clause will provide information on the proper notification procedure, the required notice amount, and the consequences of terminating the lease early. Depending on the terms outlined in the clause, you may be responsible for paying penalties, such as forfeiting your security deposit or paying rent for an additional month or more.
In fact, to demonstrate good faith and maintain positive references in the future, it is recommended to provide more than the minimum required notice when terminating the lease agreement.
Remember that the notice period typically aligns with the rental period, which lasts for 30 days and usually begins on the first day of the month. For example, if you moved in on the 1st, you would need to provide notice before the 1st of the month before your intended move-out date.