Renting out a house for the first time could be intimidating but very exciting for some of us. Getting settled into your new property is not as challenging as you think it is. The first thing to do is to decide whether it is more economical for your present situation to rent a new property rather than purchase a new one.
In the United States, the percentage of homeowners is still bigger as compared to renters. According to property management, there are about 82.8 million owner-occupied homes in the US. This made up about 65% of homeownership last year. On the other side, the renter-occupied units are composed of around 42 million. But this does not mean you should own a new house if it is beyond your financial capacity at present. There are other things which you can consider such as your lifestyle, sense of comfort, and your long-term goals for yourself. You would also need to balance out the risks involved from moving into another property.
There are several benefits of renting a house such as an agreed fixed monthly payment. This allows you to allocate the right budget for your rent. If you have repairs and maintenance problems you can raise them with your landlord to have them fixed. Renting also allows you to have more predictable expenses every month. You would know how much to budget for your utilities. If you are renting a house, this spares you from making a property tax payment too.
In addition, the amount of money required for you to pay upfront to move to a rented place is lesser as compared to owning a house. The upfront amount for house purchases is relatively huge. It could range between 10-20% of the total value of the house you like to purchase. In addition, you will also have to think about making the monthly mortgage loan payment should you decide to purchase a house through a mortgage.
House renting also offers more flexibility on the part of the tenant. You can decide where you want to live and if you are tired of the neighborhood you can pack up your bags and relocate to a new place. Moving to another house for owners is still possible but this requires a lot of things to consider and it is more financially demanding as compared to renting a house.
If you are a tenant you also don’t have to worry about property value as you can just simply move once there are major changes in the housing industry. Unlike owning a home wherein you will have to consider how much your property will be valued in the next ten years or more. In addition, the insurance cost for renting is lower as compared to owning a house where you would need to get insured.
The upkeep for the property is not something the renters should worry too much about as long as you abide by the contract. Unlike owning the house, you will have to worry about the leaking pipe, fixing the roof, repairing the heater, and other maintenance issues for the house. This also requires money and time if you will be fixing things yourself.
There are also downsides to renting a house. If your property owner decides to sell the house or refuses to renew the contract, you will have to look for another property to move in. For sudden changes in the contract due to emergency reasons, this could be daunting as you would need to move right away. Instances such as this require not only money but your time and effort as well. Having your own house provides you with that sense of belonging, having not to worry about the lease ending or the possibility of early contract termination. It gives someone that sense of fulfillment and pride in having something they can call their own.
Dedicate time to research well on the area you would like to move in. Check out the kind of neighborhood you will be living in, its proximity to your workplace, and the types of houses for rent available. You can either get yourself an agent to do this or you can do your research online. There are plenty of websites and social media platforms you can visit to get ample information.
Before signing the lease and making your move, first-timer renters need to remember these things. First, be clear on how much you need to pay upfront, how much you need to pay for security deposits, and advance payments, and how much is the application fee. Simply put, you need to be aware of the coverage of your payment. This will avoid any surprise payments in the future outside your budget. Second, identify the furniture and appliances included in your rental fee. If you are working with a tight budget, you will have to make sure to determine beforehand if the property you are about to rent is semi-furnished or bare. To make sure this is covered, set a property visit with the real estate agent or the landlord or landlady. Make sure to ask about the furniture and appliances during the tour and get permission to take photos of the space so you won’t forget what is to be included in your payment. Third, read the fine print of the contract properly. Take time to read the terms and conditions of your lease before you sign up. Highlight the text which is unclear and takes time to call the property owner for clarification. If you are sharing the house with a housemate you have to make sure that this person is also in agreement with the contract.
For anyone renting a house, first-timers or not, the terms and conditions of the lease must be understood. This will prevent any miscommunication in the future and would help maintain a good relationship with your roommate or landlord. The lease contract should also detail out insurance coverage if there are any, early cancellations for any unforeseen circumstances, utility payment, parking fee, obligations by end of the contract, method of payment, maintenance and repair coverage, security deposits, overdue charges, and other important details. If you have read the conditions of the lease you would have a better understanding of things you can change. Some property owners do not allow furniture to be removed from the place. Some even prohibit rearranging the appliances. This is important if you are to make major changes in the house such as repainting the walls, putting up fences, or even changing the pictures on the wall. If you are unsure if you can make such changes, it won’t hurt to check with the house owner. Getting permission before making any changes saves you from headaches and wasting money on prohibited changes.
Do not forget to communicate your special requirement. If you are a person with disabilities, you may be needing some special assistance within the house. Check the lease or discuss with the owner for any provisions in dealing with people with disabilities.
Keep an eye for local and national laws concerning rent. In the US there is a rent control where a ceiling price for rental property is placed. The rent control limits the amount of rent fee the property owner can place for his house for lease renewal. California, New York, New Jersey, and Maryland are some of the states which put this law in effect.
If you have the funds to spare, you may also get some professional advice for consultation. You can check with real estate agents which properties are the best to check out around your budget and your requirements. These people have the knowledge, skills, and experience to keep you in the right direction. To further save you from the hassle of moving and packing your things, you can also get a licensed mover to help you in moving your stuff around.
There is a difference between a rental agreement and a lease. Rental agreements are shorter compared to a lease. This is usually only good for a month and gets automatically renewed after depending on the mutual agreement of the renter and the tenant owner. Rental lease, on the other hand, pertains to a longer agreement. The term depends on the contract agreed but it usually covers six to 12 months or for some at least two years lease. This kind of agreement limits the changes the property owner can apply within the agreed lease period.
The real estate company or the house owner’s requirement could vary depending on the location and the contract. But it would be helpful if you could have the following handy already: proof of identification, certificate of employment or your company identification card, financial statement, social security number, reference. For short-term rental, the house owner may ask fewer requirements such as proof of identification and a financial statement.
You don’t have to be pressured with having your own house if you are not ready. Consider your current situation and if you think that renting is more convenient for you to take then go for it. At the end of the day, it is you who will have to live in that place, make the necessary payment and not the people giving out opinions.
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