What’s up guys This is Brandon Copeland, aka Professor Copeland. You are now attuned to another episode of Cope’ing With Money.
I recently did some research and found that apartment hunting tends to bottom out between November and April. Well, this is happening for several reasons. In the northern states, most people don’t want to move in the middle of a blizzard, and across the country, most families don’t want to move their children in the middle of the semester, and nobody wants to move in the middle of the vacation.
This essentially means that outside of these months – now – most people are looking for a new place to stay.
So of course I thought it would fit go over some things you should be aware of as a tenant, to save money and make your move as smooth as possible.
Before that, at Cope’ing With Money, we talked about the real cost of buying your first home. So by all means check out this video if you have the time. But we had to make sure we had some tenant-specific tips as well. We have to protect our tenants. So let’s dive right in.
The advantages of renting
So why rent at all? Well, as opposed to buying, renting allows more mobility and flexibility and also requires less maintenance for the tenant. Renting will also help you build your credit, which can save you more and reduce debt if you get it right.
There is a lot to experience when renting a new apartment. But as always, we want to make sure we take steps to protect ourselves.
It’s easy to view a beautiful apartment and fall in love at first sight. But after spending a few days there, you find that the washing machine is not working, the refrigerator is not cooling, and the ceiling is leaking. If you’re not careful, you can blame all of these things.
It gets a bit stressful quickly.
We want to make sure we are taking the right precautions to protect ourselves, our families, and ultimately our money.
Know the full rental cost
So when looking for an apartment in your price range you need to make sure that you consider the full cost of securing a space.
Before moving in, you have to pay the deposit and the first month’s rent. Depending on the landlord, you also have to pay the last month’s rent.
When you hire a broker in your search, you usually pay them another month’s rent or more as a brokerage fee.
Even if the rent for the first and last month is money anyway and you should get your deposit back at the end (provided you leave the apartment in good condition), you want to be prepared for the high upfront costs to sign the rental agreement.
Inspect your property
To make sure you get your security deposit back, do a moving inspection and fill out a moving checklist. That means searching and checking the entire property, checking for damage to the walls, floors, ceilings, and making sure that all goods and appliances in the house are working as intended.
If your home is already furnished, you want to make sure that you are on the same page as your landlord about the inventory and actual condition of the furniture. If your landlord claims there was a rocking chair in the living room and you swear there was nothing there when you moved in, it becomes a nasty conversation at the end of the lease if you want your deposit back.
It’s good to take a lot of photos as you feed it – especially anything that looks damaged. By texting or emailing these photos to yourself and your landlord, you can create a dated report on the condition of the home and prove that you are telling the truth in the event a conflict ever arises.
Consider purchasing rental deposit insurance
In addition, you should take out rental deposit insurance to protect your assets. Most landlords already ask for this, but if you don’t then you’ll definitely want to make sure you get it yourself and here is why:
Most landlords have insurance for the entire property, the asset. That means, if the roof breaks or the ceiling leaks, your insurance will help you cover it up. However, if that blanket gets on your beautiful flat screen TV or laptop that you need for work, it may be up to you to replace it.
Tenant insurance covers such events and helps you to replace your belongings in the event of damage or theft. Plus, it’s usually not too expensive, usually less than $ 15 a month. And just the security you get is probably worth the small additional cost.
So you took a few steps to protect yourself before moving in, but what should we watch out for if we are actually tenants?
Stay up to date on rental payments
Most of all, we want to make sure that we pay our rent on time. This maintains our creditworthiness and no one likes to pay interest on arrears.
Make sure you keep an accurate record of your rental payments. If there is ever any debate about whether or not you paid, you’ll want the receipts to prove it.
Even though I own my own house, I usually rent in every city I play in. And so I make sure that I pay my rent by credit card or ACH direct deposit from my bank account so that in the end I always have this strong balance sheet from them who withdraw money from my account that they can never argue with.
Stay up to date on maintenance
Additionally, we want to make sure that we communicate any maintenance issues to our landlords immediately. Although of course we hope there aren’t, we want to make sure that the landlord is fully responsible for anything that we as tenants are not to blame.
Whether it’s a door handle you hit with a vise handle ripped out of the door, or it’s a leaky pipe, or something has burst in the ceiling, reporting these things when they happen will help prevent them from getting away from festering and causing bigger problems. It also keeps you and your landlord informed of the cause of the accident or incident and whose responsibility it is to rectify it.
If you wait until the end of the lease to resolve this issue, you will be creating a major headache for your landlord who is unlikely to appreciate it. Second, it becomes much harder to claim that you didn’t cause the problems, or that you weren’t aware of them, when you put them on for so long.
Of course, there are many costs associated with repairing these things, and your landlord will likely consider your deposit as a way to subsidize those costs. So let’s avoid this whole situation by making sure that we solve these problems simply by having this conversation.
Communicate with your roommates
Finally, when you do rent an apartment, chances are that you will be doing so with roommates. Many people choose to live with roommates as it is usually cheaper to share a multi-room apartment than to rent a one-room apartment alone.
Make sure you communicate with your roommates in advance and that everyone agrees on the monthly payments and the state you want to keep the apartment in. It’s not good to be hooked because someone you live with isn’t paying their fair share, or that your deposit is being put at risk by a problem you didn’t even cause.
Some groups split the rent differently depending on the size of the room or pay different ancillary costs if the use differs from person to person. Whatever you and your roommates decide, you want to be sure that everyone knows what is expected of them and that everyone pays their money. This not only avoids money problems, but also ensures that everyone feels comfortable and safe in their own four walls.
These are just a few things to keep in mind when moving into your first apartment, or even your second, third, etc. It’s always nice to have a change of scenery and by securing ourselves financially, we can relieve stress and anxiety and enjoy these moments to the fullest.
As always, I appreciate that you take the time. Please make sure to share this video with your friends, families and loved ones who may soon be moving to their own apartment and visit kiplinger.com/cope to see more.
This was another episode of Cope’ing With Money. As always, stay healthy, stay blessed, and see you next time.
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