Newbie renters may not know the ins and outs of the renting process.
• First-time renters would benefit greatly from a professional real estate agent who specializes in rentals.
According to a report released in March 2016, about 29% of metropolitan-area suburbanites were renters in 2014, up from 23% in 2006. That is nearly 22 million more renters over eight years, the report found. Among those, there are bound to be a few newbie renters who may not know the ins and outs of the renting process.
In a recent article for Realtor.com, author Daniel Bortz — with the help of Iowa real estate broker Misty Soldwisch — provided several things first-time renters should consider before signing a lease. Here are some considerations to pass along to your clients:
1. How much rent can you afford? — According to Soldwisch, your monthly rent payment should be no more than 35% of your total, pretax income. That’s the max, she said. If you find a place that is less than 35%, even better.
2. Find a real estate agent — It may be quick and convenient to consult websites such as Craigslist when looking for an apartment. However, having a professional real estate agent who specializes in rentals do the searching would be best. In most cities — except San Francisco and New York — the agent is paid by the apartment owner, so it doesn’t cost the renter anything.
3. Consider intangibles — A nice-sized balcony and stainless steel appliances are great, but potential renters should also pay close attention to the things they can’t see. “Did you notice a noisy neighbor? How’s your cell phone reception? How long will your commute be to work?” Bortz wrote.
4. Understand the application process — Just as those seeking a mortgage, renters should be prepared to have their credit checked by the landlord or property management. According to Bortz, for a credit score below 700 but above 600, renters should attach a letter to the application explaining why their score is low and what they are doing to increase it. Renters with extremely low scores will need a co-signer, who would be liable in the event renters default on the agreement, according to Soldwisch.
5. Review the lease carefully — Here is where a real estate agent can serve as the renter’s advocate. A professional agent can review the lease, ensuring everything is on the up and up. For those willing to go it alone, Bortz recommended checking for conditions regarding subletting, notice of lease termination, rent increases, and various fees.
6. Do a thorough walk-through — Take photos of the condition of the apartment before moving in, noting not only walls and floors, but other things, such as outlet covers, shower rods, and condition of blind cords, Soldwisch suggested.
7. Always get renter’s insurance — Some leases require occupants to have renter’s insurance, but if your clients’ lease doesn’t, impress upon them the importance of purchasing it. According to the National Association of Insurance Commissioners, policies can be purchased for as little as $15 per month, Bortz noted.
Source: “7 Crucial Tips for First-time Renters,” Realtor.com (Oct. 27, 2016)