A recent event has prompted me to write about the five things you need to consider before you rent an apartment. By no means are these the only items to have a handle on. But they seem to come up quite often.
Amazingly, there is more literature on how to prepare to buy a home than there is for renting an apartment or house. Yet almost every homeowner was a renter at some time. Okay, let’s begin…
The Five Things You Need To Consider Before You Rent
1: Do not fully furnish your apartment with rental furniture.
In our instant gratification society, the new apartment renter wants to furnish the apartment immediately. Gone are the days when you bought furniture that you saved up for. Today you have the ability to furnish your apartment wholly with rented furniture.
Consider This
Most furniture rentals are billed weekly not monthly. The amount you spend on rentals would be better served buying the furniture. It will take longer but you will own your furniture. But you want it now not later. And you must have the best. So let’s look at the cost of renting.
2: Renting furniture is a recurring expense
No matter how small it is; renting furniture eats away at your funds. Not including this in your rental calculation creates a problem. This problem is known as a hidden expense.
Ex. Let’s say you rent a bed for 20.00 a week. 20.00 x 4 weeks = 80.00/month.
80.00 x 12 months = 960.00 per year to rent–not own–a bed.
But this is not your only expense.
Utilities, transportation, cell phone, food, etc. These go along with your rent.
Note: A search of the internet would show that you can buy a bed for less. Try it. Go ahead I’ll wait.
Important: If you default on your furniture rental, your credit rating will be negatively affected. In addition, the rental agency will repossess the items and re-rent “your” furniture. This is a loss-loss scenario for you.
3: Do not base your ability to pay your rent on overtime money.
Base your ability to pay your rent on your base pay. Why? Because there is no such thing as guaranteed overtime. Basing your ability to pay your rent with overtime included means you actually cannot afford the rent.
Case in Point
I have a customer who was injured on his job. He was placed on restriction. This meant no overtime. His ability to pay his rent is based on overtime. As of now, he is facing eviction for non-payment of the rent.
History Lesson: Overtime is a penalty that unions placed on companies. It is not a benefit. The penalty kicked in when employers forced employees to work past their usual hours. In the past workers did whatever hours their bosses demanded without compensation. Since overtime is a penalty, companies look to avoid overtime. They can end it anytime.
4: New apartments are not always your best bet.
Improvements in gas boilers allow for the installation of gas boilers for all apartments. This means the heat; cooking gas and hot water are on your gas bill. Add electricity and the only thing included in your rental is cold water. All other utilities are on you. Upside to this, you control the heat. The thermostat in your apartment.
Utilities Included
Do you want utilities included in your rent? Consider renting in an older building. Older buildings usually burn oil for heat and in some cases hot water. Hot water may come from a hot water boiler. This boiler feeds the entire building. The owner pays for supplying the heat and hot water. You still pay for cooking gas and electricity.
The downside, you don’t control the heat or hot water. If you are a person who likes your apartment toasty warm and takes long hot showers you are out of luck. Owners do not have to keep the apartment toasty warm. The minimum temperature for heat is set by the city. Hot water maximum temperature is also done this way.
As long as the owner follows city guidelines for heat and hot water you can complain but it will not do any good.
See: Residential Heat and Hot Water Requirements
Note: The city changes the location of webpages with various information from time to time without notice. If all else fails, go to the online 311. Use the search function to locate the information you need.
5: Hiring a real estate professional
Broker’s Fee
Using a real estate company to locate a rental property will incur a broker’s fee. The broker’s fee is equal to whatever amount the listing broker wants to charge.
There is no set amount. This is by law so don’t blame the listing broker. In your meeting ask about the broker’s fees. Inquire about the amount of broker’s fee. Find out when it is to be paid.
Who sets the broker’s fee
If your broker has the listing for the apartment then your broker sets the broker’s fee. If your broker or agent shows you a rental listed by another agency. That agency’s broker set the broker’s fee. Your broker or agent cannot do anything about it.
Two more items
Agency Disclosure. You need to be familiar with it before your work with a realty company. See: Agency Disclosure: Why is it important
Rental application fees. This fee coupled with others can really cost you. See Rental Application Fees to learn about rental application fees.
There you have it, the five things you need to consider before you rent. I tried to be brief because each one of these items can be an article in their own right. In fact, a few already are. I hope you found the information to be of use to you as you begin your rental search. Share this with anyone you know who is about to rent their first apartment.
Disclaimer: I am not a lawyer and nothing stated here is legal advice. This article applies to the five boroughs of New York. All information deemed accurate but not guaranteed. Always check the real estate laws in your part of the country.
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