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It’s one small step for you, and one giant leap for your young adult finances.
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Like some young Americans, I had a halfway step between living with my parents and living in an apartment of my own: living in college dorm rooms as an undergraduate student. As a result, it wasn’t until I was ready to start graduate school in my early 20s that I finally got my first-ever apartment and signed that first lease. It was an exciting but scary time, and while I have had my share of financial missteps in the past, thankfully I managed to avoid the following renting mistakes that first time. Make sure you do, too.
1. Budgeting only for rent
If you’re a new renter, it’s possible you’ve never had a full slate of household bills to be responsible for before, so it’s vital you understand what costs you’ll be paying. In some housing situations (such as certain apartment complexes), your monthly rent payment may include some or all of your utilities, which could make things very easy for you. I wouldn’t count on this being the case, however.
Even if your rent payment includes, say, your water bill, it’s likely you’ll have to cover your electricity, internet, and other household expenses. So before you decide if you can afford rent on that beautiful sunlit apartment, ensure your budget can support all the bills it will entail.
2. Not reading/understanding your lease
Ideally, you’ll be given a copy of a lease to review before signing on the dotted line and taking possession of your new rental. If it’s your first time as a renter, you may find unfamiliar terminology in that lease, or be unsure of what your landlord’s requirements of you will be. For example, you may not be allowed to have someone else move in with you without having them added to the lease officially.
If you’re confused by anything, now is your chance to ask questions of the landlord or property management company you’re dealing with. If they’re unwilling to answer your questions, or are rushing you to sign without reading, or if anything feels off, don’t sign that lease. Find another place to live, as you don’t want to be stuck in a lease agreement that’s unfair or shady in any way.
3. Agreeing to rent a home without seeing it first
Full disclosure, I have had to do this twice in my life as a renter (though thankfully not for my first several leases). My old career had me moving states and cities frequently for new jobs, and sometimes a lack of time and money prevented me from being able to see a place for myself before deciding to live there.
In one instance, this worked out fine. In the other, I ended up having to find legal help to break an (invalid) lease with a dishonest property management company and find a new place to live just 10 weeks after moving to the state I currently call home. It was a stressful situation, and I don’t want you to go through that. Make every effort to see a rental yourself and meet the people you’ll be dealing with before agreeing to move in.
4. Not getting renters insurance
Your landlord will have homeowners insurance on the property you rent, but that policy won’t cover you or your belongings in the event of a catastrophe like a house fire or flood. Do yourself a massive favor and get your own renters insurance policy. It won’t cost very much, and you can likely get a deal by bundling it with your auto insurance policy, if you have one.
5. Waiting until the last minute to start looking
The last mistake to avoid when you’re ready to find a rental is waiting too long to start your search. Thankfully, I’ve not had the experience of being unable to find a place to live when I needed one, but depending on where you call home, the rental market in your area might be extremely competitive.
You might also have specific requirements for a rental and will need more time to vet multiple possibilities. Either way, build yourself a nice time cushion if you can. If you know that come May 1, you need to be in a new home, start looking at the beginning of March. This way, you won’t have to rush and you can take some of the stress out of the process.
It’s a major step to get your first rental and truly be on your own for the first time. If you can avoid the above mistakes, you’re sure to find success in your quest for a new home.
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