2 months ago
Justin Becker ·
Comments Off on What Bills Come with an Apartment?
Moving into an apartment might be an exciting time, especially if you are a first–time tenant. The price tag, on the other hand, can be a bit scary. It is not simple to adjust to apartment living, including all of the costs that come with it.
If you are used to residing with your parents, you might be surprised by some of the costs.
Rather than being surprised by all the bills that come with apartments, prepare and familiarize yourself with what you will be liable for. Understanding your bills in advance will assist in planning a monthly budget. That said, break down your budget and do your best to keep track of where every dollar goes.
The good news about apartment renting is that if your monthly expenses appear to be excessive or exceed 30% of your monthly income, you might want to consider sharing an apartment with a roommate. With that in mind, let’s find out what kind of costs you should expect when renting your first apartment.
What Bills Come with an Apartment?
Typically, you should budget for the first month’s rent, a security deposit, pet rent (if applicable), and relocation expenses, among other things. Many apartments are pet-friendly and will allow you to pay a pet deposit in installments.
Consider reviewing your personal finances and making plans for everything. For example, knowing how much you spend each month on groceries, renter’s insurance, or any other housing expense is critical.
So, let’s dive in and discuss bills that come with apartments in detail.
Rental Application Fee
Before signing the lease agreement, the first step is to fill out a rental application (required by most property management companies), which the landlord/property manager will review to see if you satisfy the apartment community’s requirements. Learn more about how long it takes for a rental application to be approved here.
Often, the rental application will cost around $35 on average. It may appear to be a small fee, but it adds to a substantial figure when combined with other living expenses.
Security Deposit Fee
Typically, security deposits are equal to one month’s rent (usually part of the apartment upfront costs). It is frequently used to cover any damages you do to the apartment while you are staying there. If you want it back, you must take care of the apartment and leave it in as good of shape, if not better, than when you first moved in, except for regular wear and tear (consider reviewing your lease agreement). Learn more about how to get an apartment deposit back here.
The easiest approach to eliminate security deposit surprises is to budget for six months’ worth of rent; this will also double as an emergency reserve for your household’s needs.
Pet Deposit and Pet Rent
If you have four-legged friends, you will need to budget for a pet deposit and rent. On average, most apartments need a $250 to $300 one-time pet deposit and around $25 to $30 for pet rent every month.
It is important to remember that many apartments have pet restrictions and fines for breaking them, which could result in you paying extra money. To avoid any penalties, please be sure to read and understand the apartment pet policy.
If you are in need of a pet-friendly apartment, learn how to find apartments that allow dogs here.
Moving to your next apartment will cost you money. The amount will be determined by the distance, the size of the home belongings, and whether or not you will hire workers to assist you.
Plan on moving during the winter when fewer people are relocating, lowering the logistics demand. In addition, winter months often experience low rental prices, so not only will you spend less moving, but you could get discounted rental prices too. Checkout our tips for moving into your first apartment.
How much rent are you comfortable paying each month?
This is another bill to keep in mind. In fact, you will need to plan for several months of rent before moving in (typically six months). Renting apartments that cost more than 30% of your monthly income is never healthy financially. That said, negotiate for a lower rental price to save more money, if possible.
If you want to save money, again, consider renting during the winter months because demand for property is usually low during this time of year, and most landlords would rather negotiate a lower rate than have an empty apartment. Learn more about how to save money while living in an apartment here.
Most landlords demand renter’s insurance, so consider purchasing one to protect your personal belongings in the event of theft or damage. If you live in an area where natural disasters, like hurricanes, floods, or earthquakes, are common, purchasing insurance to insure your home will save you money. Typically, renter’s insurance will cost you around $159 per year or $13 per month, on average. Learn if renters insurance is required in Michigan here.
Living in apartments offers you a range of amenities you may not get in private homes. These amenities may include a swimming pool, fitness center, and clubhouse. Sometimes, the apartment complex charges you a fee to access these amenities. The cost of amenities may be included in your rent or charged separately.
That said, establish whether the fee is included or not. Nevertheless, make plans accordingly if you want an apartment with such amenities available.
Most apartment complexes provide trash pickup, meaning someone will come collect your trash while you focus on other things. Although it offers convenience, that comes at a cost. Talk to your landlord about the charges. In apartment complexes, trash pickup can cost around $8 to $15 per unit.
In apartment communities, the parking lot is sometimes a source of contention among tenants. This is the case especially when there is unassigned parking. If the apartment offers parking space, establish how much it costs monthly and plan for the annual cost. On average, parking can cost you $200 per year.
Many apartment complexes offer Wi-Fi services; all you have to do now is sign up for it (look for the utility providers/utility companies). With the rise of the work-at-home lifestyle, having an internet connection now appears to be a prerequisite.
According to Nerdwallet, in 2020, the average internet bill was between $47 and $69 per month, depending on the internet package.
It is easier to save more money by comparing the pricing of different utility providers. Consider signing up to providers with discounts.
The electric bill is usually one of the significant bills in apartments. Heating and cooling your apartment will cost you extra money; in fact, heating bills and cooling bills typically account for about half of your energy bill.
In 2020, the U.S. Energy Information Administration reported that Americans’ average monthly electricity costs were $117.46, up from $115 the previous year. The heating and cooling costs vary depending on the floor plan. For instance, the heating costs and cooling costs of a one bedroom apartment are likely to differ from that of a single-family house.
Although this is not a must-have service, the rise of work-from-home possibilities has prompted many people to subscribe to streaming services, like Netflix, in order to break the monotony. Subscriptions are frequently charged on a monthly basis. Plan your budget and determine whether you can afford this expense every month.
Water and Sewer Bill
Water and sewer can be billed directly to you or the apartment community, where the landlord will distribute them to each unit.Tenants then must include them in their next rent payment.
On average, a water bill will cost about $39 monthly, but this depends on your water usage. Sewer is often a percentage of your water usage bill.
According to CNBC, the average cell phone bill costs around $127.37 per month. However, you may lower your phone bill by switching carriers. Although switching carriers may be expensive upfront, if it saves you money in the long run, it is worth the cost.
Should Landlords or Tenants Pay for Apartment Utilities?
If you reside in an apartment, your landlord will most likely take care of the sewage bill, while you will be liable for the energy, water, and trash bills, among other things. Before signing your lease agreement or rental agreement, go over it again to make sure you understand what kind of utility costs you will be responsible for.
How to Make a Budget
Budgeting your apartment bills will help you remain on top of your payments so you don’t miss out on anything and end up paying the penalty.
Here are some recommendations for budgeting your monthly payments while renting an apartment:
Know Costs and Dates
Knowing the cost of each item is the best method to budget for your rental expense. For instance, if you are dealing with pets, calculate the monthly cost of the animal and project the annual cost.
Make a Calendar
Make a schedule for paying your expenses and add it to your calendar. It is easy to forget to pay rent or other bills, especially if it’s not automated. Google calendar offers a reminder feature that you can use to avoid penalties for late payment.
Payment history accounts for roughly 35% of your credit score (credit history), so paying bills on time will help you improve your credit score. Learn more about what credit score you need to rent an apartment here.
Try to Build an Emergency Fund
It is always a good idea to have an emergency fund. This could assist you in resolving any financial issues if your income source is interrupted or if catastrophe strikes.
Overestimating bills will help you avoid a budget deficit by allowing you to have a budget “spill over.” For example, if your electricity bill costs $120 per month, estimate it to be about $150 per month. However, this entirely depends on how you consume energy.
How to Keep Your Utility Costs Low in Apartments
Utility costs account for a large portion of your monthly rent costs, and lowering them requires understanding some utility consumption tips and tricks.
That said, here are some tips you can use to lower your utility bill:
Unplug All Appliances When Not in Use
If your appliances are not in use, unplug them from the wall socket. This will help you avoid paying unnecessary bills. Appliances, such as ovens and cookers, consume a lot of energy.
Use Energy-Efficient Bulbs
Incandescent bulbs are the most inefficient light source, consuming a lot of energy and having a shorter lifespan than LED bulbs. Incandescent bulbs have a lifespan of roughly 1,000 hours, whereas a 15-watt LED bulb has a lifespan of around 25,000 hours. Prioritize investing in LED bulbs to lower the energy bill. Learn more on how to save energy in an apartment here.
Regular Maintenance of HVAC System
If you go awhile without repairing your HVAC system, you may end up with a large bill at the end of the month. If you see a sudden increase in your energy bill despite consuming the same amount of energy as normal, your HVAC system is the most likely culprit. Request that your property manager/apartment management has a look at it and identify the problematic HVAC parts.
Fix Your Door and Windows
If your apartment lets in air through under-door spaces, like your windows, you may have a high energy cost. Visit a local hardware store and buy an air sealant; it’s a small price to pay compared to the energy bill.
The cost of your rent is not the only bill to be concerned about when living in a rental, which is why it is important to be aware of the full spectrum of bills that come with apartment renting. In a nutshell, apart from the rental price, here is what you should remember to budget for when renting an apartment:
- Security Deposit
- Pet Rent
- Pet Deposit
- Renter’s Insurance
- Electric Bill
- Gas Bill
The most important thing to do is review your lease agreement/rental agreement and confirm all associated fees before signing and moving in. If the bill appears to be a little overwhelming, find a roommate to split the bill and still enjoy the perks of the apartment community. If this is the route you choose to pursue, you will need to learn how to split up rent with roommates.
2 months ago
Justin Becker ·
Comments Off on How Long Does it Take to Tour an Apartment?
Browsing online and viewing virtual apartment tours are both excellent ways to find your new apartment, but they will not provide you with a complete picture of the property or its surrounding areas. This is why you should always make apartment tours a top priority while looking for a new home.
Virtual apartment tours will not provide you with all of the information actual in-person apartment tours provide. However, you, like many others, may be concerned about how long a tour will take when looking for an apartment, right?
How Long Does it Take to Tour an Apartment?
An apartment tour takes anywhere from 30 minutes to about an hour, on average, but it may take longer if you have additional questions for the property manager to answer. That said, the more concerns you have regarding the apartment, the longer your tour will be. However, it is often good to make sure the property manager addresses your concerns before signing the lease agreement.
Apartment tours can take much longer if you are not prepared, which is why it is recommended that you plan ahead of time. This entails, among other things, formulating your inquiries in a clear and specific manner and determining the number of apartments to visit. This is why you need to know what to ask when apartment hunting.
In addition, making an apartment checklist of items to keep an eye on will help you save time that you would otherwise spend being unsure if you have covered everything.
How Far in Advance to Book an Appointment for an Apartment Tour?
Generally speaking, an apartment tour can be scheduled days or weeks in advance. However, if the apartment is brand new and/or in high demand, you should schedule your apartment tour as soon as possible.
How Many Apartments Should You Tour?
Most people look at two to three apartment complexes before making a decision. However, it is often dependent on individual tastes and preferences. For example, some people may visit up to 10 apartments in a single day before deciding on their future residence.
Please note that it is crucial to spend enough time viewing an apartment to ensure that everything is in working order before paying a security deposit or any other form of payment. Be sure to ask the property manager to resolve any issues you have regarding the apartment.
What to Look Out for During an Apartment Tour
As previously stated, the way you prepare for your apartment tour can make or break your experience. Make a list of items to keep an eye out for when viewing the unit.
If you have no idea how to go about it, here are ideas for an apartment tour checklist that you can use:
Modern Living Room
You want to make sure that the new living room is large enough to meet your needs. A larger living room is necessary if you have oversized furniture; otherwise, you will wind up with a cramped space in which you can hardly walk around. Learn how to maximize space in an apartment here.
Check the locks on the front door to see if they are in good working order. If the apartment has already been occupied before, check to see if the floor is sturdy and free of buckled-up tiles. Another item to look at is the walls. Are there any cracks in the walls? Are the walls and paint in good condition?
Also, check the lighting. Turn on and off the light switches to ensure they are in good working order.
TIP: Apartment buildings with natural lighting will help you save money on your energy bills because you will not need to use the lights throughout the day. Having said that, check to see if the windows are large enough to allow more light in. Find out other ways on how to save money while living in an apartment here.
You want to make sure your kitchen is up to the challenge because it is likely one of the most used rooms in your apartment. Whether you like a closed or open kitchen layout, the most important thing is that it be functional.
It is nerve-wracking to move into an apartment and then schedule a repair request the next day. Scrutinize every part of the kitchen, including the cabinets, the sink, and the appliances to avoid any unpleasant surprises. Also, be sure to examine whether there are any leaks in the plumbing.
For cabinets, open them and determine if they have enough space to accommodate your utensils. A larger kitchen is also a bonus for an apartment, but if space is not a concern, at least ensure the items stated earlier are in working order.
The bathroom is another place where leaks are common. Check to see whether there is any faulty plumbing. Also, check the water temperature and water pressure; some units experience low water pressure, which could be daunting when taking a shower.
If everything is working to your liking, move on to something else. Flush the toilet and check whether it is functional. If it is not, ask the property manager to fix it.
Another thing to consider is the size of the bathroom. You do not want to feel cramped while showering.
Does the apartment have an on-site laundry room or in-unit laundry machines? If this is a concern to you, make sure you choose one that fits your needs.
If you have a car, you want to make sure the apartment has an assigned parking spot, or at least ample parking. This is because unassigned parking sometimes can be chaotic and you may end up parking far away from your unit or on the street.
Of course safety is important, too. Check to see whether the apartment has a smoke detector. Is there a surveillance system in place at the apartment building? Also, make sure the apartment complex has fire extinguishers. If the apartment does not have a fire extinguisher, ask the property manager to explain.
The circuit breaker panel in the apartment is another thing to look at; does it appear to be secure? Generally speaking, if you don’t think it is safe enough, let the property manager know and they should make the necessary improvements.
Check the power sockets and make sure they all have power. If there are any faulty sockets, ask the property manager to replace them.
Is the thermostat working? Keep an eye on this as well. Also, check the window A/C unit or central air conditioning to make sure it is functional. How about the ceiling fans, are they working?
Another thing to watch out for is the property manager’s behavior. If it is in a landlord’s character to be stubborn, you can’t change it; it’s better to look elsewhere. This is the reason why you should also talk to other residents about their rental history or experience and get their feedback about the landlord in general. If there are an excessive number of complaints, it is a sign that you have come to the wrong place.
Lastly, it is crucial to know the crime rate of the surrounding buildings. If neighbors complain about their belongings being stolen, that should be a red flag that the area is not safe.
Questions to Ask During Apartment Tour
Make sure you know what to ask your prospective property manager before going on an apartment tour. This is the time to become acquainted with the rules and regulations of your apartment complex and the surrounding neighborhood.
Consider the following on your apartment tour:
- What are the terms of the lease agreement?
- What is the rent price?
- Are utilities included in the rent?
*Some apartments include utilities in the rent, so be sure you know what kind of utilities you will be liable for when you pay your rent. Ask the property manager to clarify the utilities included. Also, read our guide on how to find apartments with utilities included.
- Is there a grace period for rent payment?
- When is rent due and how will you need to pay?
- How often will the rent be raised, and by how much?
- Is the actual unit/apartment community pet-friendly? Is there an apartment pet policy?
**If you have pets, you may want to make sure the apartment allows pets, and if there are any restrictions. The property manager should notify you in advance before paying a security deposit, one month’s rent, and signing the lease agreement.
- Is there a break-lease clause?
***You should get this straight from the property manager, and you should know the cost of breaking your lease before you sign it. However, there are always exceptions, such as active military service and domestic violence, among others. It is good to have a conversation about this provision with the property manager as well.
Things You Should Never Do while Touring Apartments
As terrifying as it may sound, you should never do certain things while touring apartments. This will make your apartment tour run more smoothly, while also saving you time and money.
Here are some of the things you should not do when touring apartments:
Do Not Forget to Bring Measuring Tape
Measuring tape is a must-have piece of equipment because, for instance, you will want to make sure the living room space is big enough for your furniture. If you do not have one, visit any local hardware store and buy one. It will cost you less than $20.
Do Not Arrive Late to the Showing
Do not turn up late in the evening if your booking is for the morning or midday. Property managers or leasing agents are always on the lookout for red flags, and showing up late can get you in trouble. Be punctual, you want to give a good impression, especially if the apartment is high on your list.
Do Not Come without Questions
It is a huge mistake to show up at the landlord’s door without questions pre-prepared. If you fail to do so, you may miss critical information that could cause you to break the apartment’s rules once you move-in, or you could miss critical details that may affect your apartment living experience. Also, an apartment tour takes longer when unprepared.
Spend some time figuring out everything that could have an impact on you as you adjust to apartment living, then create a list of questions based on your findings.
Do Not Assume Cell Service will be OK
Most people overlook the cell service because of the assumption that it will work perfectly as it should. Well, do not make that mistake! Make sure everything works before you leave the apartment.
Although an apartment tour takes typically 30 minutes (sometimes at least an hour), proper planning will help you spend less time viewing the apartment while still getting what you need.
During the apartment tour/apartment hunt, be on the lookout for a rental scam or fake apartment listing. If the property manager or leasing office/leasing agent asks you to pay to see the apartment, it is most likely a ruse. Do not move forward with such apartment listings.
Fake apartment listings are common in the rental market, and, therefore, being aware of the red flags will help you navigate the market without losing a dime. According to an analysis by Apartment List, 43.1% of Americans have come across or been victims of a rental scam (this includes phantom rental scams). So be careful out there and happy apartment hunting.
2 months ago
Justin Becker ·
Comments Off on Why Renting an Apartment is Better than Owning a Home
For many Americans, owning a home is the ultimate dream, but that does not imply it is suitable for everyone. That is because purchasing a home is a long–term commitment that necessitates a significant financial investment.
Having said that, whether your lease is coming to an end, you are looking for your first apartment, or you are considering buying a home, all of these decisions influence your finances and should be carefully considered.
If you are thinking about spending money on a home, you must ask yourself several questions, which includes, but is not limited to:
- Is there enough money in my account to cover a down payment?
- Is my monthly salary steady enough to cover the mortgage in the near future without going into default?
If you answered no to either of these, renting an apartment might be the best option for you because it makes financial sense.
Renting an Apartment is Better than Owning a Home
Renting an apartment is less expensive than buying a house, even though it may cost a few thousand dollars to pay for a security deposit, one month’s rent, and a rental application fee to move-in to your new apartment.
In addition, you won’t have the same maintenance chores as a homeowner, which means you will have more time for leisure and other pursuits. So, if you are debating whether to rent an apartment or buy a house, we are here to provide you with all the reasons you should choose the former.
Here are the reasons why you should consider renting an apartment rather than buying a house:
● Less Costly: Fewer Upfront Cost
● No Maintenance Costs or Repair Bills
● Less Time Commitment to Cleaning and Other Home Maintenance Duties
● No Property Taxes
● You Do Not Need to Carry Mortgage Debt
● More Freedom and Flexibility as to Where You Live
● Flexibility to Downsize if Desired or Needed
● You will have Lower Utility Costs
● No Worrying About Decreasing Property or Home Values
● Access to Amenities
● Renters Insurance is Much Less Expensive than Homeowners Insurance
● Homeowners Association Fees Generally are Not Your Problem
● You will Build a Sense of Community
Less Costly: Fewer Upfront Cost
Renting a home requires less financial commitment than buying a home. To be safe, you should save up for six months worth of rent, a security deposit, a rental application fee, a pet deposit if applicable, logistics costs, and other miscellaneous fees.
We recognize that apartment hunting involves spending potentially a few hundred dollars, but this is a small price compared to housing prices. A home requires 20% of the home value as a down payment. For example, if the house sells for $200,000 (purchase price), you will have to pay $40,000 as a down payment, which is a significant sum to pay upfront. In addition, the closing costs for buying a house are also another expense to incur.
That said, if you are on a tight budget, renting an apartment within your price range is a better option than buying a home.
No Maintenance Costs or Repair Bills
Landlords are responsible for the repairs and maintenance of the apartment. They always have emergency contacts or online platforms to send your repair requests through. However, to avoid confusion about who will pay for repairs and maintenance, you should always review your apartment lease agreement and seek a provision stating who will pay for them. Find out what is considered a maintenance emergency in an apartment here.
In a home, on the other hand, you are responsible for everything, including repairs and maintenance. This means that if something breaks, you must bear the cost of repairing it. Furthermore, it is up to you to find reliable plumbers, electricians, cleaners, or lawn services. Many apartments have all of these services vetted for you, so you won’t have to worry about whether or not the plumber will show up or if they will do a good job.
Less Time Commitment to Cleaning and Other Home Maintenance Duties
Learning how to adjust to apartment living lets you focus on more essential things rather than worrying about who will mow the grass or fix the lighting or plumbing. Apartment buildings have designated plumbers and electricians to respond to any emergency requests from tenants, which is more difficult if you live in a home because you have to find reliable tradesmen yourself.
The allure of owning a home and living the “American Dream” might cloud your judgment, causing you to overlook the fact that cleaning your apartment takes a fraction of the time it takes to clean a home.
If you cannot clean the home yourself, hiring someone to do it is another option that will cost you a few hundred dollars, but make more sense.
No Property Taxes
If you rent an apartment, you do not need to pay property taxes. Property taxes are the unit owner’s responsibility. Most aspiring home buyers/potential buyers ignore the property taxes and homeowner’s insurance expenses when they initially purchase, which can quickly add up to a significant financial burden if not planned for properly.
You Do Not Need to Carry Mortgage Debt
Mortgages are frequently thought to be good debt; however, this is not totally accurate. Even if you are building equity over time, the monthly mortgage payment (considering mortgage interest) can be burdensome if your income is not consistent. If you want to build equity, that is fine, but defaulting on a mortgage can result in losing the property entirely.
For your information, equity is the difference between your home loan balance and what you can sell your own house for in the current housing market. If you want to sell your house fast, head over to webuyanyhouse.co.uk.
Renting an apartment relieves you of the burden of mortgage payments; all you have to do is pay your rent on time. Even if you fail to pay, the worst that can happen is that you will be evicted, which is a minor inconvenience compared to losing your own home that you may have invested thousands of dollars in.
More Freedom and Flexibility as to Where You Live
The best thing about renting an apartment is the freedom to live wherever you want. You can move at any moment if necessary or if you desire something that a home may not provide.
Rental properties can easily be found near an affordable city, unlike homes where you may have to live in the suburbs, or maybe another option could be expensive townhouses. If you need to relocate for work or a change of scenery, you may have to break your apartment lease. If you live in a house, though, you may need to sell it first before thinking about relocating.
Flexibility to Downsize if Desired or Needed
It is simple to downsize when you live in an apartment, whether it is for financial reasons or simply to be more of a minimalist. The first reason is that you have fewer household things in comparison to other people living in homes. Secondly, it will cost you less to downsize in an apartment than in a home. Find out how to downsize from a house to an apartment here.
You will have Lower Utility Costs
One of the biggest perks apartments have over homes is the utility bills. Most apartment tenants pay lower utility bills compared to those living in homes. For example, heating or cooling a larger home will consume a lot more energy than heating or cooling a 1,000 sq. ft. apartment. This implies spending more money on energy in homes than in apartments. Learn how to lower your electric bill in an apartment here.
Furthermore, some apartments include utilities in the rent, so you don’t have to worry about them once you have paid your rent. Check whether utilities are included in the rent while you are looking for an apartment. If they are, figure out which utilities you will be liable for and which the landlord will cover. Learn how to find apartments with utilities included here.
No Worrying About Decreasing Property or Home Values
Whether the apartment complex loses or gains value makes no difference to you as a unit renter. When a homeowner’s property value drops, however, he stands to lose a lot of money and has a lot to worry about the selling price/asking price.
For example, if a home is worth $300,000 and the value drops by 20-25%, the homeowner will lose up to $75,000. However, if your apartment lease agreement specifies that your rental payments as $2,500 each month until it expires, you will pay that amount regardless of the property’s value increasing or decreasing.
Access to Amenities
Most apartment complexes feature a variety of amenities that you would not get in a home. For example, you may get access to a swimming pool, clubhouse, fitness center, and/or playground, among others.
If a homeowner wants to enjoy the same benefits, he will have to construct a swimming pool or a fitness facility, in most cases, which can be expensive. Besides, the cost of maintaining such amenities is equally high; hence any extra amenities will result in higher maintenance costs. On the other hand, the landlord is responsible for maintaining the swimming pool and other common areas in apartments.
Renters Insurance is Much Less Expensive than Homeowners Insurance
Homeowners must have insurance coverage, which is far more expensive than what most renters pay. Renter’s insurance is often cheaper and covers almost everything, including computers and furniture, among other household items.
According to a report by the Insurance Information Institute, the average cost of homeowners insurance is $1,249 per year, while the average cost of renter’s insurance is $179 per year.
Homeowners Association Fees Generally are Not Your Problem
Although it may appear crazy, homeowners association fees in some neighborhoods may be substantially costlier. According to Realtor.com, on average, homeowner’s association fees (HOA fees) run around $200-$300 per month (monthly payment).
When you factor in monthly house maintenance, utility bills, homeowner’s insurance, and mortgage payments (monthly payments), you can see how costly owning a home can be. If you rent an apartment, homeowners association fees will not be any of your concerns or worry.
You will Build a Sense of Community
Living in a rental property lets you interact with other people who share your interests and gives you a sense of belonging. In comparison to living in a home where your next-door neighbor is a little more ways away, the proximity between you and your next-door neighbor in apartments improves the likelihood of interactions due to sharing common grounds.
Things to Consider when Renting an Apartment
Now that you understand the financial benefit of renting an apartment as your primary residence, you should use some tips when searching for an apartment, such as:
● Home’s Location: The Proximity of the Apartment to Nearby Amenities
● Estimate Your Rental Budget
● Pet-Friendliness of the Apartment Community
● Natural Lighting
Always Make the Best Choice
In conclusion, renting an apartment is the best choice compared to home buying. If your income is irregular (financial situation) and you move around a lot, renting an apartment will help you save money and offer more flexibility.
Comparing renting versus buying a home, renting wins! It is even less costly to pick home renting rather than the actual purchase (home ownership). Although homes bring a sense of stability and some tax deductions along the way, the aggregate cost is way higher than that of an apartment.
It is important to prioritize financial health by renting an apartment rather than purchasing a property that might suck you dry and leave you in financial distress.
3 months ago
Justin Becker ·
Comments Off on Apartment vs. Mobile Home: Which is Better?
If you are reading this, you‘re probably undecided about buying a mobile home vs. renting an apartment. Thankfully, you have made the wise decision to conduct your homework and better understand the benefits and drawbacks of each option.
Buying a mobile home vs. renting an apartment is a significant financial decision that requires careful consideration. For example, if you are renting an apartment, plan to set aside about six months’ worth of rent, security deposit, and a pet fee (if necessary). If you are purchasing a mobile home, on the other hand, set aside approximately 3% of the purchase price for closing costs and other fees.
That said, planning or budgeting might assist you in achieving your financial objectives and spending sensibly on housing.
Apartment vs. Mobile Home
Whether you are a new apartment renter or mobile homebuyer, understanding the two options is critical. Fortunately, we have put together a detailed comparison of renting an apartment vs. owning a manufactured home to assist you in making an informed decision.
That said, here is what you need to know about buying a mobile home vs. renting an apartment:
Pros and Cons of Apartment Living
There are advantages and disadvantages to renting an apartment; so, here is what you should know:
Apartment living is often recognized as being affordable housing. Renting an apartment is less expensive than buying manufactured homes for sale. Despite the fact that mobile homes/manufactured homes are up to 30% less expensive than site-built homes, paying $50,000 or more is still a hefty sum for many Americans.
That said, before move-in, an apartment just needs a fraction of that. According to RentCafe, the average monthly rent (apartment prices) for a one bedroom apartment for rent can be as little as $635 per month, while the most expensive average monthly cost or average rent can cost well over $3,850. Learn everything you need to know about renting an apartment here.
Since the landlord is responsible for most repairs and maintenance, apartment dwellers can save money (learn more about how to save money while living in an apartment here). In addition, renters can dedicate their time to different activities instead of mowing the lawn or making apartment maintenance repairs, unlike homeowners.
For example, if you encounter plumbing issues, all you have to do as a renter is submit a repair or maintenance request and your landlord will handle the rest. Apartment complexes often have a dedicated team that will respond to your requests quickly.
However, it is crucial to remember that the lease agreement spells out your responsibilities, as well as those of the landlord. This helps to eliminate any uncertainty about who will pay for the requested repair or maintenance. Learn what is considered a maintenance emergency in an apartment here.
Fewer Upfront Costs
Renting an apartment involves much more affordable upfront costs compared to buying a mobile home/manufactured home. For example, you need a security deposit, one month’s rent, a pet deposit (according to the apartment pet policy), and an application fee. The application is often used for processing the application including background checks, and income verification process among other things. Learn how long an apartment application takes to be approved from our own blogs here.
For mobile homes, you need at least a 3.5% down payment plus closing costs to secure a manufactured home. According to the U.S. Census Bureau, the average price of a new manufactured home was $111,900 in November 2021, which equates to just under $4,000 just for the down payment.
The majority of apartment complexes have made significant investments in recreation. This includes the addition of onsite gyms, fitness centers, and clubhouses, as well as onsite swimming pools and playgrounds, which are all common features included nowadays within an apartment community. Also, owners managing communities or complexes plan for holiday parties and engage the residents to enhance community living.
If you put a manufactured home on private land rather than in a mobile home park, you may have to build your own swimming pool and add other amenities in order to partake in the same benefits of an apartment community.
Lack of Privacy
One of the biggest drawbacks of learning how to adjust to apartment living is the lack of privacy. Since just a wall usually separates you and your nextdoor neighbor, loud music might be annoying, especially when you are trying to relax.
However, in a mobile home park there is a decent distance between you and your nextdoor neighbor, giving you the space and solitude you require. Furthermore, compared to limited balconies in rental units, a mobile home usually has a wider backyard (your own space) to relax with family during leisure times.
Leasing an apartment does not give you any equity in the long term. As a result, there are no potential returns on the money you are shelling out if you rent an apartment. This is something that a mobile home buyer will appreciate if they decide to sell their home because they will build equity due to paying a mortgage.
So, if you are thinking about getting returns from your monthly bills, making monthly mortgage payments for a mobile home would be a better choice over paying rent.
Pros and Cons of Mobile Home Living
Mobile homes or manufactured homes are less expensive than permanent residences, but is this true when compared to living in an apartment complex? Let’s find out!
Buying a site-built home is often out of reach for many aspiring homeowners. According to Statista, in 2020, the average price of a home in the United States was $391,900, then rising to $453,700 in 2021.
In contrast, mobile homes offered an alternative housing option to aspiring homeowners. According to the recent data by the Census Bureau’s Manufactured Housing Survey, the average price of a manufactured home in the U.S. was $112,000 in October 2021.
That said, buying mobile homes is a less expensive option and financial burden than purchasing a traditional real estate home.
If you want to relocate, you can do so with your manufactured home, as opposed to real estate homes, where you must sell the entire structure before relocating. Mobile homes or manufactured homes are moveable structures that may be loaded onto a truck and transported to any site. Learn how much it costs to move a mobile home here.
On the other hand, a stick-built home cannot be moved; it is permanently affixed once constructed. The flexibility that a mobile home/manufactured home provides attracts many buyers.
Owning mobile homes or manufactured homes gives you huge freedom when it comes to customization. Owning mobile homes means you can decorate them however you want without restrictions from anyone. However, this is not usually doable in apartments, as most landlords have restrictions on how much you can decorate. In some cases, you may not be permitted to alter the house’s interior at all.
If you want to customize your living space to fit your personality, you may consider buying a manufactured home rather than leasing an apartment. This is not to say, however, that customization is prohibited in all apartments; always read your lease agreement to determine the extent to which you are permitted to make changes to your unit. Learn how to read an apartment lease here.
Living in mobile home parks/mobile home communities provide you with a great deal of privacy. In comparison to renting apartments, mobile home parks offer a less noisy atmosphere, with a larger backyard, more spacious living area, and reasonable distance between you and your nextdoor neighbor.
In addition, you will have your own space for parking, unlike apartments where you may have to consider street parking. There are sometimes disputes over parking spaces, something you would not encounter if you lived in a mobile home/manufactured home on your own property.
Bigger Upfront Costs
Despite the fact that mobile homes/manufactured homes are less expensive than regular residences, many buyers are concerned about the upfront fees. Closing costs, downpayment, and broker fees (someone who locates and brokers the deal with the mobile home seller on your behalf) are all expenses that can be difficult to offset in the beginning.
A downpayment of 7-10% on a manufactured home valued at over $100,000 is still a significant sum to come up with. Also, you may need to pay a lot rent before moving to a manufactured home community. Lot rent is like an apartment rent, you pay monthly even though you own the home itself. The upfront expenditures for an apartment, on the other hand, are likely to be lower than the down payment and other fees associated with buying a manufactured home.
That said, if you have a smaller budget and you often relocate, consider renting an apartment because it is less expensive compared to owning manufactured homes.
Fewer Mortgage Options
Manufactured homes are considered personal property, and, therefore, do not qualify for traditional lending. That said, the limited options could be a huge disadvantage to someone actively looking for manufactured home financing.
A mobile home is often financed by a personal property loan, unlike a real estate home that has a wide range of lenders at its disposal. However, if the mobile home is permanently attached to land (not mobile anymore), it could qualify for traditional lending, like real estate assets.
Maintaining a manufactured home is another expense that may cost you hundreds of dollars every month. In fact, if you place your manufactured home on private land, the responsibilities will be the same as that of a homeowner of traditional homes.
For instance, with manufactured homes, if you need your grass mowed, you may either do it yourself or pay for lawn services, which can be costly. In apartments, on the other hand, you don’t need to worry about the lawn or cleaning the community playground because all of these are taken care of by the property manager and their team.
Lengthy Buying Process
Buying a mobile home or manufactured home could take longer than renting an apartment. Handling all the paperwork could be daunting, especially if you are a first-time buyer. However, in apartments, all that is left for you to do before moving in is sign the lease agreement after your rental application is approved.
The majority of apartments complete rental applications within three days, as opposed to a manufactured homes’ lengthy buying process, which might take longer, especially if there is a lien on the property owner.
Renting an apartment is ultimately the better choice compared to buying a mobile home, especially if you are on a tight budget. Apartment living has fewer ongoing maintenance costs and concerns, allowing you to spend more time doing things like swimming or hiking on a nature trail, among other activities.
Also, renting an apartment allows you greater freedom than purchasing a mobile home. For instance, you can move out anytime after your lease expires, compared to living on a private lot, which may require you to sell the property or relocate the manufactured home.
3 months ago
Justin Becker ·
Comments Off on How to Split Up Rent with Roommates
In some cases, you might find yourself sharing rent with someone else to pay less rent, i.e. having a roommate. This can certainly help you afford a much nicer place than your budget may allow for.
With that said, splitting up rent with a roommate can present some challenges. For instance, one person might prefer the larger master bedroom or even a room with more light. If you were to consider the square footage occupied by each person to do the calculation, such a person might be forced to pay more rent. Learn about how much square footage you need for an apartment here.
So, how can you split rent fairly with your roommates without them feeling mistreated? Keep reading to find out.
How to Split Up Rent with Roommates
There are various ways to split rent fairly with roommates. Let’s go over them here:
Split Rent Evenly
There is no easier approach than splitting rent evenly. Here, you simply divide the total monthly rent between the total number of people or roommates in the apartment. This method does not factor in living costs, individual income, and room size variations.
Splitting rent evenly works best when everyone in the apartment has similar room sizes and amenities, such as windows and closet space. It is also perfect in situations where roommates are not as concerned with keeping track of their finances.
Split Rent Based on Income to Rent Ratio
This approach is common for friends and couples when one has a higher monthly income than the other. The idea here is to split rent such that everyone pays what they can afford.
There is no defined formula for splitting rent with this method since everything is based on personal agreement. We recommend adding each person’s income together, then dividing your income by the total income of the whole household. This will give you the percentage of the monthly rent you can comfortably afford.
The general rule of thumb is that you should pay at most 30% of your income as rent. Most people who choose this method typically like to have some side arrangements. For instance, you could find the person who pays less rent being assigned to some extra duty, such as watering the plants or taking out the garbage.
Split Rent Based on Room Size
If the bedrooms are designed in different sizes this is the best approach to use. Here, you and your roommates should split rent by square footage.
To achieve this, add up the square footage of each person’s individual space, such as their bedroom, balcony and private bathroom. You can then divide it by the total square footage of the entire apartment, outside of the common areas such as the living room and kitchen. This will give you the percentage of the apartment rent you should be responsible for.
Split Rent Based on Perks
While calculating how much rent each person will pay, you may want to factor in several other factors. For instance, you could consider whether some of the rooms have private space amenities, such as a walk-in closet, balcony, or bathroom. Some rooms may also present some disadvantages, such as scarce natural lighting, being more susceptible to noisy apartment neighbors, or having a lack of windows.
Split Rent as per Sperner’s Lemma
This approach was discovered in 1928 by Emanuel Sperner. Even though it is not the easiest approach to split rent, it brings some aspects of fairness into perspective.
The method is to divide rent between roommates based on their individual personal preferences. Learn more here.
Avoiding Rent Split Issues
Even after doing the math and agreeing to an action plan with a roommate, the plan may fail. For instance, one party might have second thoughts about the agreed plan, or they may find out later on that the plan is not working out for them.
Whatever happens, you need to have measures in place to prevent such rent disputes from ever happening. Let’s explore how to achieve this:
Put the Rent Splitting Agreement in Writing
An agreement becomes binding if it is written down and signed. This is always the case, especially where sensitive matters are involved, such as money. Nomatter if you are budgeting with your spouse, splitting rent with a roommate, or renting a two bedroom apartment with a friend, it would help to have a written agreement.
Lacking a written document leaves room for your roommate to change their minds at the end of the month. Therefore, when you decide to move in with a roommate, have an agreement in place and share the signed version with the involved parties.
Develop a Payment Schedule
You can also avoid issues with your potential roommates by developing a payment schedule. There is no hiding that people prefer paying rent in different timelines. Some prefer paying towards the end of the month, while there are others that prefer to pay at the beginning of the month.
For this reason, amongst others, coordinating rent payments with your roommates becomes very difficult. You can streamline everything by having one of you pay the rent for the whole apartment. The other roommates pay their share to the person who paid the rent.
The challenge with this process is that it will only work if you have mutual trust with your roommates. An alternative solution is to set up a payment process online. The challenge here is that some landlords do not accept online payments.
There are several online payment tools that you can use, including Trulia’s online rent tool and Zillow rental manager. These options allow the landlord to see the tenants that paid rent on time. They can then deal with defaulters as per the lease agreement.
Considerations While Splitting Rent
A series of factors influence the rent splitting process. For the process to be successful, you must consider all the factors.
Below are critical considerations to follow if you wish to split rent with roommates successfully:
In most cases, some roommates use certain amenities more than others. For instance, some roommates prefer to have a long hot shower, while others like to have the heat turned up throughout the whole night.
It is, therefore, important to determine whether or not you will equally split the utility costs among roommates or you will pay depending on individual usage. We recommend negotiating payment percentage for each, as paying based on usage can prove to be hard to track.
You need to check the lease before moving into an apartment. Ultimately, it is the leaseholder(s) that are legally responsible for rental costs. It may be beneficial to all parties involved if the roommates were both listed as leaseholders, this way if the rent is not covered, both parties’ credits will suffer.
With that said, if one roommate’s portion of rent is not paid, it is then up to the other leaseholder to come up with the difference. Typically, though, when people list themselves as leaseholders, they end up being more responsible.
We recommend that you make a roommate agreement if you want to save money and time in the long term. A roommate agreement outlines behavioral and financial arrangements between roommates and is a legally binding document.
With such a document in place, you will cover yourself if your roommate does not pay their fair share of the apartment rent.
Best Online Platforms for Splitting Rent
We recommend using an online rent split calculator or online tool if you want a straightforward process. Such tools enable you to divide your rental expenses in a variety of ways, such as by room sizes, amenities, and total rent. Below are top rent split calculators worth your attention:
Without question, Splitwise is among the best bill management platforms in the industry. It is easy and free to use. The benefit of this rent calculator is that you can employ it for monthly utility bills, rent, meals out, and holiday planning.
With Splitwise, you will be able to create groups with roommates for collective costs. You can then divide up what each owes, and keep track who pays. Additionally, you can settle one-to-one payments.
Here, the shared expenses are available on a dashboard for everyone to see what they are required to pay. You will also like this platform since it accumulates everything together and keeps a running total. You can carry out rent payments easily and quickly through Venmo or Paypal.
This is another free site that you can use to divide the amount that each roommate owes. Apart from just calculating the amount that each roommate owes the landlord, the platform will also provide a brief explanation of why and how the calculations are fair.
Handling Rent Split Conflicts
Sometimes, rent split conflicts are unavoidable. You should at least have an idea of how to handle them when they occur. Below are tips to help you handle rent split challenges:
When conflicts associated with dividing rent arise, things can become heated. We recommend that you start off on the right foot. It would be unwise to dismiss your roommate’s issues and concerns. Avail them with an opportunity to voice their concerns in an effort to work things out.
Explain to the Landlord
Before you approach your landlord, ensure that you pay your portion of the apartment rent. If your roommate refuses to pay their share, explain it to the landlord. The landlord, in some cases, may make an effort to work something out.
Always Refer to the Roommate Agreement
The agreement terms can be negotiated only when the parties involved are willing either to sign a new agreement or make changes to the original agreement. Always refer to it if a conflict is addressed in the agreement or if you are not willing to make adjustments to the original agreement.
3 months ago
Justin Becker ·
Comments Off on What is a Lease Takeover for an Apartment?
When someone leases their apartment to you, your lease obligations are typically the rent and utility bills. This is a great option for people looking for an affordable lease and a hassle-free move.
On the other hand, lease takeovers appear to be a feasible strategy to get out of a lease arrangement without paying the penalty. Lease takeovers are a great way to transition into a new living space, but finding a suitable renter to take over your lease may be difficult.
What is a Lease Takeover for an Apartment?
A lease takeover or a lease assignment is a process where you can take over someone else‘s lease with the consent of the property manager or landlord. This means that you will be responsible for paying the rent, and the current tenant will no longer be liable for it.
The current tenant has to agree to this, and they need to sign a lease transfer form that states they are transferring their rights and obligations under their original lease agreement with the landlord to someone else, including the security deposit. Under this circumstance, they will no longer be the official tenant.
Once the new tenant signs the document, the prior tenancy will come to an end, and the “old tenant” will no longer be obligated to pay rent.
Breaking a lease often means you incur penalties, but a lease takeover is a way around those penalties. With that said, there are other instances where you do not have to incur the penalties. For example, if your landlord fails to maintain a living environment, you may be eligible to terminate your lease. Similarly, if you are on an active duty military assignment and you get deployed or given any other military assignment during the term of your lease, you can break your lease with no repercussions. Learn more ways on how to break a lease without penalty here.
Is a Lease Takeover the Same as Subletting?
A lease takeover or lease transfer is not the same as subletting.
Subletting is renting out your space to another person, although they are not registered as the tenant responsible for the unit on the apartment lease agreement. The person renting your space becomes a new tenant and pays you a percentage of the rent each month, but they are not an “official tenant.” This can be beneficial because they cover part of the rent payments while you are still responsible for making sure that all bills are paid.
With that said, if the new tenant fails to pay rent and you fail to cover their part, your name is on the dotted line. This means your credit score can suffer, but not the sublettor’s because they do not officially take over your lease.
Is a Lease Takeover a Good Idea?
It is a good idea in certain scenarios. For instance, an apartment lease takeover is a way for renters to avoid being penalized when needing to move to a new location, such as in the case of a job change.
When the original tenant moves out, they will find someone else to take over their existing lease, who then pays the same amount of rent to live there as the original tenant. The new tenant takes over the responsibility for any damages or bills incurred, too
How Does a Lease Takeover Work?
The rental agreement is one of those documents that can be quite confusing for some people. In order to avoid any confusion or mistakes, you should take your time and be careful when reviewing this type of document. Learn how to read an apartment lease here.
Before you step in and take over, or let someone else take over the remaining rent, go over the lease agreement in great detail.
That said, here is how to go about a lease takeover:
Understand Your Lease Terms
If you are having your lease taken over, that means you will move-out of your current apartment before the lease is finished. Learn more on how to move-out of an apartment here. With that said, before you get too excited about moving to a new place, make sure you review your lease terms to establish that it allows for a lease takeover.
Many apartment leases have strict stipulations that prevent this; meaning that if you need to move out early, you may have to pay lease break penalties regardless of a lease takeover situation. You should also double-check with your state’s laws. Even if the landlord does not agree, some states allow for a lease takeover. So, in addition to verifying your lease agreement, your state or local laws should be the next best thing you can look at.
Read on to learn more about what happens next if the apartment enables lease takeovers/lease transfers. Some laws stipulate that if you engage or initiate a lease takeover, finding you to forfeit the security deposit or that you must give 60 days’ notice before moving out. Learn more about Michigan Security Deposit Law here.
Consult with Your Landlord
Lease takeovers are a great way to end your lease prematurely without incurring a penalty cost. However, before you jump into anything, you need to contact the landlord and get their approval.
Working closely with the landlord will make the process go more smoothly.This is because the landlord may be hesitant to let someone else take over your lease, especially if you have been a good renter. That said, you must persuade the landlord that you will be able to find a suitable tenant who will not cause any problems.
Once the landlord or the property manager understands your motives, acquire their approval in writing. Never proceed with a verbal agreement as this could be detrimental to your lease arrangement. Written consent of the landlord’s approval will help convince a prospective tenant that you have the landlord’s support.
Remember: If you want to take over someone else’s lease, the first thing you should do is make sure the landlord allows for it and has a written agreement signed. This will assist you in avoiding any issues that may emerge as a result of taking over a lease down the road.
Find the New Tenant
After the landlord has given you written clearance, the next step is to find the right tenant and vet them. Landlords may be more willing to let you continue forward with your lease takeover if you can locate someone as excellent as you, or even better.
Remember to mention that it is a lease takeover while advertising your apartment. When looking for someone to take your place, leaving out certain details could be risky. Some candidates will jump right in if it is a lease takeover because it is more convenient than hunting for an apartment from scratch, especially with the limited number of vacancies these days.
Once you have narrowed down a few candidates, double-check with the landlord about the vetting process to ensure you are both on the same page. For example, most landlords will want to take care of the credit and background checks for the new prospective tenant because of the potential risk when renting an apartment. In other cases, some landlords may prefer that you shoulder most of the responsibility for evaluating the prospect in accordance with their criteria.
Formal Lease Takeover Agreement
Once the current tenant finds someone to take over the lease, a lease takeover agreement will need to be prepared. The current tenant, the new tenant/future tenant, and the landlord will all need to sign it.
This agreement will state that the current tenant is transferring the tenant responsibilities to the new tenant/replacement tenant, who will take over the lease and that both the landlord and the new renter are aware of the terms.
Once signed, the original renter will no longer be obligated or responsible for paying rent; instead, the new tenant will be.
How to Take Over Someone’s Lease
When you take over someone else’s lease, there are a number of things that you need to be aware of. At the very least, you need to know how much the rent is and what the current balance on the security deposit is. You also need to know if pets are allowed in the building and about the apartment pet policy. Learn how to find apartments that allow dogs here.
That said, here are three main things you should do to prepare for taking over a lease agreement:
Prepare for a Credit Check
Credit checks are standard in the rental market, so expect a full credit history and background check if you are looking to rent, even if it is a lease takeover. Prepare all financial documents, including your credit report, bank statements, and any other documentation that shows you have the financial means to pay the rent.
Most landlords will put you through the same rental application as everyone else, so do not expect any surprises. Learn more about what credit score do you need to rent an apartment here.
Inquire About Conditions
Before signing the lease takeover/lease assignment form, ask the landlord about the condition of the unit. A landlord may stipulate that he will not participate in the apartment’s repairs, or may request additional payments in return. You must be aware of such matters and agree on everything that affects your tenancy. The present tenant may be prepared to undertake the cleaning and possibly repainting. You have the upper hand until you sign the agreement, so take advantage of it.
If you do not know how to go about the new lease, consider visiting a law firm to hire their services. You would be better off spending a few bucks on a new lease through an attorney than risk a potential penalty for future lease violations because you did not grasp the provisions.
Do Not Go Behind the Landlord’s Back
The greatest mistake you can make is to take over the lease without the landlord’s permission. Even if the departing tenant assures you that the landlord is in favor of the takeover, do not agree to go ahead unless you have received written permission from the landlord. To be safe, meet with the landlord in-person to confirm the same.
Think about this, if you take over the apartment without permission, how do you expect to request apartment maintenance or any other services from the landlord?
The lease agreement is one of those documents that can be quite confusing for some people. In order to avoid any confusion or mistakes, you should take your time and read the lease carefully when reviewing it. That said, the lease takeover can be a pleasant or stressful procedure, depending on how you go about the situation.