Renting your first place is exciting and a little scary. You may already have an idea of what furniture you want and what color the walls are going to be, but before you can plan aesthetics you have to get that dream apartment first. That’s when the budget and confusing terminology comes into play. You may have already started reaching out for advice from friends, searching Google for tips and looking for guides to renting an apartment.
Yet, trustworthy first-time renter advice is hard to find — often you have to learn from experience. There are a few general standards smart renters live by when deciding when and where to rent an apartment.
At REE Apartments we meet with plenty of first-time renters to help them get their bearings before signing their name on a lease. Renters generally come in with plenty of questions, and our goal is to help answer those questions so they can find a perfect fit for their lifestyle.
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The most common first-time renter questions we hear all the time are:
Is it better to rent or own?
There are plenty of myths floating around about renting versus owning. There is no definitive right answer, but the facts will help you make a decision that is right for your situation. Find out which is better for you by reading the 5 rent vs own myths.
What apartment can I afford?
Affordability is the main concern for any renter, so it’s no surprise that we hear this question all the time. Calculate how much rent you can afford here so you can start budgeting.
What bills do you pay when renting an apartment?
Preparing for rent payments, deposits and monthly utility fees is something first-time renters often overlook or underestimate. Understanding the basics of your monthly budget and what is or isn’t covered under your renter agreement before you sign the lease is crucial. Many apartments include heating or garbage removal costs in the monthly rent, for example, but you need to check to be sure.
Do I need renters insurance?
Renters insurance is just as important as homeowner or vehicle insurance — plus it’s usually not a budget breaker. Learn about the benefits of renters insurance and what shocking expenses you can protect yourself from.
Review more of our first-time renter advice for a healthy budget to prepare yourself for a smooth transition.
1. Understand Your Budget
When looking for your first apartment you may wonder, “What can I afford?”
It is recommended that your income is 2.5 times your monthly rent amount. For easy calculation use our rent calculator to see what you can afford. If you want to take it a step further, look at your income after taxes and subtract your expenses like phone bills, insurance, car payments, loans, clothing, food and entertainment. What you have left is what you will be able to spend on your rent each month. But keep in mind this does not account for the new utility bills, cable and other fees you’ll be responsible for that are not included in rent.
What’s wrong with going a little over budget?
If you’re not thrilled with what you can currently afford you may be considering stretching your price range to fit that two bedroom + balcony spot downtown. Overstepping your finances can cause a buildup of undue stress — from anxiously checking your account to missing out on fun weekend adventures, and potentially missing an important payment.
Unfortunately, any late rent payments or evictions will negatively affect your credit report, making it harder to rent another property, get loans, purchase a car, you name it. Hurting your credit is a ding that follows you around, so it’s important to be cautious of your spending and have a proper budget in place.
The hunt is not over!
With the endless amount of apartment opportunities always popping up you’re bound to find an apartment you’ll love without breaking your bank. Pet-friendly, spacious, affordable apartments in a neighborhood you love are an easier search than you may think.
Key budget takeaways:
• Calculate what you can afford
• Create a detailed budget and plan
• Stay consistent with your budget
2. Provide for Deposits
Some of the main bills and deposits you’ll have to pay as an apartment renter are things you’ve never even had to consider while living at home or school.
How many deposits will you have?
Once you choose your apartment you’ll have to pay a deposit on the apartment itself as well as potential fees for electricity, water, internet, etc. It’s important to ask your landlord to put in writing what is covered in your rent and what is not, so you understand completely what’s your responsibility to pay separately. You’ll also want to ask how many security deposits they’ll need from you and how much each is. Often, special cases like a pet deposit can pop up unknowingly, putting a dent in your well-planned budget.
How much is a deposit?
A security deposit on an apartment is often equal to one month’s rent but may be more. Additional deposits or fees will likely range from $25 to $100. Without damage or disturbance to the apartment beyond normal wear and tear you’re sure to receive your deposits back from your apartment once you move out, sometimes with the exclusion of a small amount for cleaning fees (your lease should state this). In the meantime, you will have to account for these sums within your first month’s budget.
Understanding your lease
Your lease can be your saving grace or your worst nightmare. It is incredibly important for you to thoroughly understand your lease before signing — never be afraid to ask questions!
Ask your potential landlord whatever you’re curious about or what you don’t understand. Take some time to carefully read the lease terms — even reach out to a more savvy friend or family member to go over it with you. Ask them what they wished they had asked when they were first renting.
You’ll definitely want to ask:
• What are the terms — month-to-month? A year lease?
• What’s the policy about breaking a lease early?
• What is covered in the monthly rent and what is not?
• What are your policies on guests, noise, pets, etc?
• What do I have to do to ensure I get my security deposit back?
Read more lease considerations and questions here.
Key deposit takeaways:
• Ask your landlord about what’s covered in rent and what’s not (make sure it’s in writing!)
• Budget for your deposits before signing
• Know how to reclaim your security deposit upon moving out
• Read your lease and make sure it documents everything you and your landlord have agreed to.
3. Build Good Credit
Your credit score will follow you around endlessly — but that’s not a bad thing if you have good credit. Building good credit will provide unique benefits you can use to your advantage, but before that can happen you’ll have to have credit.
There are many benefits to having strong credit:
• Easier approvals when looking to rent or buy
• Low interest rates on credit cards & loans
• Better car insurance rates
• Lesser to no security deposits on utilities
If you’re paying student loans or other monthly recurring payments you’re already on your way to building good credit. With a proper budget you can also responsibly use credit cards to build a healthy credit history.
Using your credit cards responsibly
When renting your first apartment you may not have built up a strong credit score yet, but you can start working towards it for your future endeavors. Be careful to use credit cards in moderation and not as a dependency to avoid carrying over large balances from month to month and accruing high interest payments. You’ve planned your budget for a reason — now it’s time to stick to it in order to avoid any major “uh-oh’s.”
Use credit cards to help with emergencies or for smaller, regular expenses like gas that you know you can pay off each month. This way you can stay on budget without stressing and also build up good credit.
Key credit takeaways:
• Good credit means lower rates, easier approvals, and less stress
• Paying student loans and other bills on time will build your credit
• Use credit cards responsibly
• Avoid carrying over balances on cards from month to month
Moral of the Story: Plan Ahead
An apartment is not a rash decision — it’s an investment toward your future. Yes, decorating and having a place to call your own comes with a lot of excitement but also a lot of responsibility. Understanding what you can afford, creating a plan and learning how to build good credit will be crucial for your first apartment rental experience.
At REE Apartments our mission is to help renters like you find the ideal apartment for their everyday lifestyle. View our available rental options and reach out with any questions you have during your renting process.