Chapter 1

Understanding the Truths of Renting

IN THIS CHAPTER

Looking at the differences between buying and renting

Walking through the steps of renting a place

Living in an apartment or rental house

Considering renting a room in a private home

The day you sign a lease on a new apartment or house can sometimes feel like the beginning of a relationship. You and the property owner have committed to trust, transparency, respect, and keeping your word to honor the lease.

Maintaining your commitment to paying your rent on time, being a great neighbor, and keeping your home in tiptop shape are a few essential steps to being an excellent tenant.

Likewise, a landlord is committed to responding to your inquiries promptly and efficiently and always maintaining a professional and respectful rapport with you.

This chapter helps you get started with having a happy renting experience.

When you’re searching for a place to call home, note that such a home can come in many different shapes and sizes. Some people rent an entire house, some rent an apartment, and some rent a room or floor in a private house.

Comparing Renting a Place to Buying a Home

Why should you consider renting rather than buying a home? The upfront cost is the most significant difference between the two options:

• Home purchases sometimes require a down payment of 20 percent of the purchase price. Then you add on the closing costs, which are usually 3 to 5 percent of the purchase price.

  You can qualify for a Federal Housing Administration (FHA) loan if you’re a first-time home buyer. An FHA loan allows you to make a lower down payment of 3 to 5 percent of the purchase price rather than the standard 20 percent.

• As a renter, on the other hand, your upfront cost is the first month’s rent, security deposit, and broker fee if you use the services of a licensed real estate agent.

Here’s how that breaks down for purchasing a $400,000 home:

• A down payment of 20 percent equals $80,000.
• At 3 percent, closing costs are an additional $12,000; at 5 percent, that jumps to $20,000.
• Added together, your upfront costs are between $92,000 and $100,000.

Upfront rental costs vary by market, but they’ll almost certainly run much less than $100,000 for a similar property.

Consult with a mortgage professional to run the numbers if you’re considering buying a home versus renting.

Getting an Overview of the Rental Process

Ready to rent? Great! The following sections cover the general steps of the rental process, from deciding which amenities you want in a home to signing the lease, paying the upfront costs, and moving in.

Also, I discuss some of the best apps to search for your home and how to ensure your application is approved.

Figuring out what you want in your new home

When starting on your journey to find your rental, you may not know what kind of space you’re looking for. And guess what? It’s okay; finding a place to call home is a learning process. Don’t get discouraged; get out and look at places. The more you explore and see, the more you understand what you don’t want and what makes one space better for you than another. This process helps you discover what you love.

To figure out what you want in your new home, start with the amenities you must (or really, really want to) have.

• Does washing dishes bore you? You should include a dishwasher on your must-have list.
• Do you prefer to do your laundry in the privacy of your home? You may need an in-unit washer and dryer.
• Does the idea of having private outdoor space excite you? You may need to include outdoor space on your list.

Also think about the charm and aesthetic. Are you a wood floor lover? Do you like high ceilings? Do you prefer a modern or a prewar look? You get my point.

Now, get your pen and pad and make notes about what you want and what appeals to you. Your home should reflect you; it should exhibit your personality. When you truly live well, those boxes are checked off.

See Chapter 2 for more about figuring out which amenities you want in a rental home. Chapter 3 has details on considering different types of buildings and neighborhoods.

Searching high and low for the perfect place

Looking for the ideal place usually begins on the right app or website. Many good websites and rental apps can help you find your new home. Here are a couple of the options:

• One of my personal favorites is realtor.com (www.realtor.com). It’s a national site that allows you to search for apartments in your favorite neighborhoods. Wherever you’re looking, the platform is easy to navigate; gives you the contact details for the landlord’s agent; and prominently displays the bedroom and bathroom count, the price, and a map that shows similar properties in the surrounding area.

  Just as important, it pulls from multiple databases with reliable sources to ensure that you get the most accurate and up-to-date information.

• Another reliable source to search is Homes.com (www.homes.com). This platform is straightforward to use; provides large images of the properties; and allows you to search by entering the neighborhood, agent, school, or place.

  The real estate agent’s contact details and the answers to the most critical questions about the unit and property are on the main page and not hidden on the last screen of the listing details.

Keep in mind that when you work with a licensed real estate agent, they have access to the best listing platforms to ensure that you have access to all the available properties for rent. Chapter 4 has details on searching for properties and working with a rental agent.

When embarking on your search for a new home, making time to see all the listings as soon as possible increases your odds of finding your ideal home.

Applying to rent a space

You’re employed, have a strong credit rating with excellent on-time payments, have 6 to 12 months of rent saved, have gathered all the important documents you need, and make an income 40 times the asking rent. In other words, you’re ready to apply for your future rental home!

When you apply for a rental, the most crucial factor to keep in mind is to make sure you can paint a picture of your ability to pay the rent. You can show your verified income through your offer letter, pay stubs, W-9, or tax returns. Discuss with your rental agent or the rental’s property manager the documents required to submit your application.

Getting approved for a rental says your application has demonstrated to the property manager or landlord that you’re qualified to pay the rent. Nothing can stop you!

Chapter 5 has the full scoop on applying to rent your dream rental home.

Signing the lease and paying upfront costs

You’ve made it to the lease signing. The upfront cost at this stage is generally the first month’s rent and your security deposit, which can be one- or one-and-a-half-months’ rent, and any broker fee, if you’re using a broker.

The security deposit amount varies depending on the state you live in and the landlord you’re renting from. The broker fee also varies; some fees can range between 10 and 15 percent of the annual rent or a fee equivalent to one month’s rent.

Depending on the type of building you move into, you may need to pay additional upfront moving fees, such as the following:

• A pet fee or deposit
• A building-related administrative fee
• A parking fee
• An elevator fee

The preceding fees are generally associated with larger apartment buildings. Rental buildings with ten or fewer units and private rental homes don’t usually charge move-in fees. The first month’s rent and security deposit are the most these properties typically expect you to pay.

Speak with your property manager, rental agent, or landlord about the fees in advance. Some may be refundable. You can usually pay all fees due at lease signing by certified check, credit card, or electronic payment.

See Chapter 6 for details on signing your lease and paying the necessary fees. Chapter 11 has the scoop on renewing your lease.

Moving and settling in

Moving can bring new renters excitement, joy, and even anxiety. The prospect of working around empty boxes sprawled out, renting a moving truck, or hiring movers can be daunting. Don’t fret; with preparation and organization, you’ll be all packed in no time.

Settling into your new home can take a few days or months. Often the most organized and detail-oriented renters unpack and settle in right away so they can return to their usual way of doing things. For some movers, however, settling happens piece by piece, and they unpack when they can. One way isn’t better than the other. It all comes down to your preference or timeline.

Settling in can sometimes mean getting to know your door attendant, figuring out where the building’s gym is, or getting to know your landlord (who also lives in the first-floor apartment of the...