Do you plan to rent your first apartment soon? If yes, here’s a spoiler alert – “Renting an apartment isn’t an easy job for first-time renters.” As a beginner, you will encounter several hindrances throughout your renting journey. These hurdles will influence bad decisions. The good thing is that these obstacles can be avoided through prior preparation.
In today’s renter’s guide, we’ll understand everything you need to know as a first-time renter. From exploring the right way to find an apartment for rent to an in-depth explanation of rental applications – we’ll cover all important concepts. So, with no more delay, let’s get straight to our first topic. Here we go!
Preparation For Renting An Apartment
It is your first time looking for an apartment, right? If yes, start with deciding how much rent you can afford. Most people start looking for apartments without a clear idea of how much they can afford. You should not make the same mistake. Let’s understand the budget consideration in detail.
How to Determine Your Ideal Budget Range?
According to experts, the average rent of a 1BHK apartment has increased by 4% in 2022 compared to last year. Thus, deciding what rent you might be paying becomes crucial when you plan to rent new space. Most financial wizards recommend spending not more than 30% of one’s gross monthly income on rent.
For example, if your monthly income is around $6000, an ideal amount to spend on rent would be a maximum of $1800. Many landlords prefer a tenant’s income to be thrice the amount of rent. Thus, whatever figure you decide for your rent, consider this point.
50-20-30 Budget Rule – It’s a Game Changer For Beginner Renters
For all first-time renters, the 50-20-30 rule is a great tactic for budget creation. According to the 50-20-30 rule, 50% of your annual income should be reserved for your necessary bills and rent.
Furthermore, 20% of your income must get reserved as savings. Lastly, 30% of your net income can get devoted to your “wants,” such as shopping, entertainment, vacations, and hobbies. This rule isn’t just limited to rent but the management of your overall spending.
Once you know the budget you can keep for rent, start looking for an apartment. When looking for a living space, it’s ideal to consider your locality. Here’s everything to know about this topic.
How to Pick The Right Apartment to Live in?
Choosing a suitable apartment isn’t as easy as it might appear. You might have got a taste of complexities if you have already started searching for a living space. When picking up a place to live, consider the following five key points:
#1 Proximity to School or Work
Consider the distance of your apartment from your kids’ school and workplace. In this case, the shorter leads to lower transport expenses and makes the apartment favorable as it saves time spent on the daily commute.
#2 Transport Options
Let’s suppose you got a great deal on a home, which is far away from your office. Before finalizing, check out the scope of train, bus, and subway options.
Feel free to check out the vibes of your neighborhood. Are there local restaurants or stores nearby? What class of people live around? Look for such things.
Safety is an essential consideration when looking for an apartment. Pay close attention to lighting, parking, CCTVs, etc. Their presence is crucial.
#5 Convenience to Local Attractions
If you are an extrovert, make sure your neighborhood has local attractions like sports clubs, bars, etc., where you can have fun and enjoy spending time.
Now that you have learned the basic preparation of renting an apartment let’s explore a renting application.
Application Process to Rent an Apartment
An application is the first thing you must deal with while renting an apartment. It’s an application filed by the potential tenant, provided by the rental agent or landlord. A renting application is a sort of tool which helps the landlord determine what kind of renter you indeed are. When you are applying to rent an apartment, there are certain documents that you will need. Let’s explore the necessary documents below.
Documents Required For Rental Applications
Depending on landlords and rental agents, you might be asked for various documents. Besides, certain documents are generally needed almost always. Some of them are:
- Photo ID – Passport, Driver’s license
- Copy of employment and salary proof
- Copies of the past two pay slips
- Copies of the past two months’ bank statement
- Copies of two old W-2 forms
- Contact details
- Co-signer applications (only if applicable)
In addition to these documents, there are some extra that you might have to submit. These application extras are asked most of the time. Thus, it’s better to be prepared if you are asked to submit them. Keep reading to learn about these documents.
Along with your rental application, the following are some essential documents that you might be required to submit:
- Authorized credit check
- Document reflecting your credit score
- Consent form for background check
- Application fees or agent’s commission – advanced check
So, all the necessary documents and charges that every tenant must know about are listed above. As we learned about documentation, let’s understand the application filling process.
Filling a Rental Application
When you have found your ideal apartment, don’t wait to fill out a rental application. Get started with it as soon as possible. To get a rental application, directly contact your rental agent or landlord. It’s a form that needs to be filled out by the tenant before a rental agreement. One can expect questions about the current job and annual salary in this form.
Moreover, you may also be asked about your previous stay (where have you lived before and if there’s any co-signer for you. Rental markets like Los Angeles, New York City, and San Francisco are highly competitive. If you can find your desired place to rent, it would be ideal for you to trigger the application process fast. Otherwise, there are chances that the property might be rented out, resulting in the rejection of your application.
Here ends the topic of the ‘application process. If your application is selected, your landlord will offer a rental agreement. Once you are done with the agreement, the apartment is all yours.
Regarding a rental agreement, the credit score is a critical consideration. Every landlord pays special attention to it. Read ahead to learn about a credit score and its importance in a rental agreement.
Credit Score – What is it, And Why is it Highly Important?
A credit score is a numeric representation between 300 to 850, which reflects an individual or consumer’s creditworthiness. The higher the credit score, the higher the money lending capabilities and trustworthiness. A credit score is generally based on one’s credit history.
It includes the number of bank accounts, total debt, history of repayments, and other vital factors. For lenders, a credit score is an authentication tool to determine how likely a borrower will repay loans on time. For landlords, a credit score helps evaluate a tenant’s credibility.
Importance of Credit Score For Landlords
For all tenants renting an apartment for the first time, the landlord should get their credit score checked. The higher your apartment’s rent, the higher your credit score should be. If you have been paying off your credit card bills timely, it’s a good indicator for an agent and landlord. It reflects that your probability of paying rent on time is also high, which is what every landlord wants.
Bad Credit Score Doesn’t Mean No Apartment
A credit score isn’t static. It keeps on changing all the time, depending upon various factors. Not everyone has a good credit score. But it doesn’t mean they can’t rent an apartment. One can still be eligible to rent an apartment but have to walk an extra mile.
In case of a low credit score, the tenant must prove their credibility. They have to convince landlords that they’ll pay rent timely. Here are some of the ways to do so:
Secure Yourself a Co-signer
If you do not, a co-signer takes your legal and financial responsibility to pay rent. In other words, a co-signer gives you a green flag as a renter.
Clear Your Payment Recurring
Another great way of winning your landlord’s trust is by explaining to them the reason behind the blemishes in your credit report. Help them understand how the hiccup in your credit history wasn’t indeed your fault.
Pay Two or Three Month Rent in Advance
The best way to establish a great impression on your landlord is by offering advanced payment. Pay your rent in advance for around 2-3 months more than the minimum advance collected by the landlord.
Now you know how important a credit score is for renting an apartment. Work on your credit score if you have enough time before getting started with the renting process. The better your credit score, the more likely a landlord will rent you their property.
Renting your first-ever apartment takes lots of effort. However, you’ll encounter minimal complexities if you go through this article beforehand. Whether looking for apartments in major cities or the countryside, this guide will help you navigate the renting process smoothly.
So make sure you don’t miss any point we have shared today and start looking for apartments ASAP. Lastly, we hope you get your desired apartment within your budget.