8 Things Nearly All First-Time Renters Get Wrong
Want to rent a room? Join the club! By the end of 2021, rental applications returned to pre-pandemic levels, with applications up 13 percent over the previous year. And among those actively seeking apartments, the largest surge in renters was among Gen Z (up 39%) – many of whom were entering the rental market for the first time.
But with all those newbies to renting, there are sure to be mistakes made, especially during the seismic shifts in the COVID-19 altered real estate market.
To help, here are some common mistakes that today’s novice renters make that can cost them dearly. Read this list carefully to make sure you know these common mistakes.
1. Not bothering to check your credit score
While checking credit scores may not be the first thing a renter does, it’s now more important than ever.
“With more renters than available properties, landlords are being more stringent about creditworthiness,” says real estate agent Denise Supplee, co-founder of Spark Rental.” Since there are more and more applicants to choose from, people with good jobs, good credit and high income will get apartments over people with little to no credit.”
The good news is that all renters can easily check their credit through a number of free services, such as Credit Karma, which also provides information on ways to repair credit if there are problems.
2. Not having your rental paperwork ready
Many first-time renters make the mistake of thinking they can see the apartment first and then get their application paperwork together. But in the land of rentals today, things move fast and landlords don’t wait while you go home and put together your paperwork.
“Today, if you don’t have a completed application and six months of pay stubs/tax returns/references, your application usually gets thrown to the bottom of the pile,” says Jameson T. Drew, president of Anubis Realty.
Drew advises applicants to bring scanned or electronic copies of all the documents most landlords require to showings.
“If you are a first-time renter,” says Drew, “make sure your co-signer has all the forms ready as well.” The last thing you want to do is start asking Dad if he can send you his bank statement. You’re not going to get that unit.”
3. Assuming you’ll get the rental just because you apply
First time renters often think that once they find a place they like, all they have to do is apply and they will get it. However, even if your credit is good and your finances are in good shape, the current market is very competitive, so that may not be enough to guarantee you’ll get ahead.
“As a property manager, it’s not unusual to receive more than one application, and a few may be a toss-up,” says Bruce Ailion, a real estate broker and attorney with Re/Max Town & Country in Atlanta.” At this point, we present the advantages of each to the homeowner in order to make a decision.”
In this case, you may want to try to sweeten the deal and make yourself stand out. While bribes are prohibited, Ailion suggests you can say you’re willing to pay a little more in rent – perhaps $25, $50 or $100 more per month – to secure the property.
“Tenants rarely offer to pay extra rent, so just stating your willingness is enough to get your application noticed,” Ailion says.
4. Paying higher rent than you can actually afford
Unfortunately, many renters make the mistake of not thinking through how much they can actually afford to pay up front each month in a tight market, and then they find themselves completely “unaffordable” to rent.
It’s easy to get carried away with your emotions and push your budget when you’re looking for an apartment to rent,” says Michael Cannivet, president and chief investment officer of Silverlight Asset Management, a financial advisor.
To avoid this pitfall, Cannivet advises renters to adopt the 30 percent rule. For example, many landlords require your gross annual income to be 30 to 40 times your monthly rent. So, if your annual income is $75,000, you can afford to pay about $1,875 a month in rent.
5. Panic renting
Many renters are now just grabbing whatever they can get without thinking through what they really need.
“During and after the pandemic, things moved quickly and people wanted immediate solutions,” said Tammy Bonell, co-chair of EXIT Real Estate, Inc. said Tammy Bonell, co-chairman of the international firm.” People were making decisions based on emotion rather than facts.”
As a result, Bonnell said she saw many people having to downsize, or not being able to find the size they wanted. Then they have to put things in storage – which costs them money they could have used to pay rent.
Take a breather and make sure any apartment you apply for fits your life.
“Make a list of needs and must-haves, and make sure you’re asking the right questions,” Bonnell says.
6. Having too narrow search criteria
Too many renters stick to their guns and have no flexibility, which limits their options to the point where they may have trouble finding any place at all.
“While amenities may not be as good as newer buildings, for example, older buildings may have rent control or rent stability,” says Valerie Fitzgerald, author of “Hearts and Selling: How to Survive and Thrive in Real Estate” and a top broker with Coldwell Banker in Los Angeles.” This limits the percentage of rent increases a landlord can make each year.”
7. Not clarifying all costs
Many renters believe that the “rent” figure they are told is all they will pay. However, this is a mistake. Gone are the days when everything was automatically included in your monthly bill.
“A few years ago, people thought landlords would cover everything that went wrong with a home,” says Jason Garrios, a real estate agent with Community Choice Realty of Southeast Michigan and author of the book Think Like a Realtor. Today, landlords now write into the lease that the tenant is responsible for certain things, including potential repair service calls, up to a certain amount.”
So you need to make sure you know what you’re signing up for.
Cannivet says, “It’s important to read the fine print and look for additional fees such as trash collection, parking, community amenities, concierge services, Wi-Fi and pets.” Pay special attention to any rules regarding the requirement to get your deposit back.”
Before signing a lease agreement, renters also need to ask if any utilities are included in the rent.
“Renters may have to pay for electricity, gas, water and sewer,” says Brian Davis, a real estate investor and co-founder of Starfire Rentals.” Try to get estimates for gas and electric bills at different times of the year, as these costs can fluctuate significantly depending on the season.”
8. Not doing a walk-though with your landlord before you move in
Renters should be aware that they need to protect themselves by looking for damage before taking possession of a space.
“Before moving a plate into an apartment, you should have an in-person walk-through with the landlord or property manager,” Davis says.
The landlord should provide a written form, and both of you should make note of any pre-existing problems in the unit.
“At the end of the walk-through, both parties should sign the form documenting the exact condition of the unit at the beginning of the lease term,” Davis advises. That way, the landlord cannot claim that the tenant caused pre-existing damage, and vice versa.
Also, take time-stamped photos yourself before moving in.
“It’s important to take pictures so that there are no discrepancies in the condition of the rental unit when you move in,” says Cannivet.