6 Crucial Money Mistakes First-time Renters Can Make
How to Avoid Common Mistakes
With so many of the nation’s urban rental markets short on inventory, rents have risen to record levels in many parts of the country. Now, more than ever before, it is crucial that renters, especially first time renters, really do their research before signing a lease.
There are many ways to go wrong with your first rental. Here is a list of six common mistakes (many of which carry a strong financial penalty) made by first time renters — with a little bit of luck and plenty of knowledge, you can avoid these errors.
1 – Failing to Do Any Research Prior to Signing a Lease
It can be tempting, especially if you’re dealing with a time crunch or trying to find a place you can live (with) in a market with low vacancy rates, to forego the research that most seasoned renters would never think of skipping.
But — you need to research the market to make sure that you’ll be charged a comparable amount in rent, your prospective landlord or property management company to make sure they don’t have a history of unethical or illegal practices, and the neighborhood to make sure that it’s a good fit for your lifestyle as well as your budget. You will also want to educate yourself regarding landlord/tenant law in your state, county, and town.
2 – Signing a Lease Without Taking the Time to Read It Carefully
A lease is a legally binding document that can only be broken under very specific circumstances without costing the renter a serious amount of money. Read your lease before you sign to make sure that it doesn’t contain anything you won’t be able to live with, conditions outside the normal range in terms of penalties for breaking it, and anything else that seems sketchy, unethical, or downright illegal.
3 – Failing to Procure Renter’s Insurance
Renter’s insurance is optional, and your landlord’s insurance will cover the building and grounds, should a disaster happen. Your landlord’s insurance may even protect you and your guests should someone injure themselves while visiting your property.
However, your landlord’s insurance will not cover you or your possessions in the case of a disaster, burglary, or house fire. Protecting yourself, your guests, and your belongings for a nominal sum is the intelligent thing to do.
4 – Failing to Take Pictures Upon Move In
If you don’t take pictures of every nail hole, cracked window pane, mildew spot, dirty kitchen drawer, carpet stain, damaged set of blinds, and anything else that isn’t in perfect condition when you move in, you may be financially responsible for getting into perfect condition when you move out.
Protect yourself by spending thirty minutes with your cell phone or digital camera and provide your landlord with the photos, so that everyone is on the same page.
5 – Failing to Clean Up After Yourself
Unless you paid a non-refundable deposit (illegal in many places), you have a financial interest in cleaning up your rental when it comes time to move out. Not bothering to put in the work to at least remove all trash and to do a basic cleaning will most likely forfeit the better part of, if not all of your deposit.
6 – Failing to Fully Evaluate Their Financial Situation
Lastly, before you assume that renting an apartment or single-family home is the best solution for you and your loved ones, take some time to examine the market and your own finances.
You may be able to buy a condo or home for less money (monthly) than you’d be spending in rent, and with a down payment that you could contribute to with what you’re paying that landlord in deposits. Why pay to build someone else’s equity when you can build your own?
Do the Work, Protect Yourself
If the overarching theme of this list has been anything, it’s this—take the time, do the research, and protect yourself. Most financial mistakes that first-time renters make are made out of lack of knowledge. Take the time to educate yourself, and you and your bank account will be happy for it.
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