Guide to Renting

Renting an apartment may not be as big a financial commitment as buying a home, but it can still be a daunting process if you haven’t done it before. This guide covers the basics of what you need to find and move into your new place with as few bumps as possible.

Creating a Wish List
Before you start looking, it is a good idea to think about what you want. How much can you afford to spend? (Don’t forget you will likely be paying some utilities on top of rent.) How many bedrooms do you want? What is your ideal location? What amenities do you want? Do you want a place that is pet-friendly? Write it all down on a piece of paper. Then review your list and prioritize – unless you have an unlimited budget, you probably will not be able to get everything. What things on your list are must-haves and what can live without?

There are several ways to find available apartments:

  • Go on-line: In many cities, Craigslist is a popular source of apartment listings. You may also be able to find them on your local paper’s website. Many real estate agencies have apartment listings as well.
  • Cruise the neighborhood: Go to the neighborhoods that you are interested in and look for “For Rent” signs.
  • Use word of mouth: Ask people you know who rent if there are any vacancies in their building. (And don’t forget to get the scoop on what they think of the place.)
  • Hire a broker: Just like you use a real estate agent to find a house, in some places, it is common to use a broker to find an apartment. They do a lot of the leg work for you, but they usually charge a fee (although some landlords will pay all or part of the broker’s fee).

After you find a place that looks promising, you will want to arrange a visit. If there is no open house, you can just contact the landlord or property manager to set up a time to see the place. You don’t want to rush, so go at a time when you have at least an hour free. Observe the apartment and surrounding area carefully. Is street parking readily available? What is nearby? Does the building look well cared for? In the unit, are there any signs of condition problems (e.g., mold, leaks, cracks)? Can you hear the neighbors or street traffic? Do the appliances look to be in good condition? Is the water pressure satisfactory? Don’t be afraid to ask the landlord questions about anything that is not readily observable. You may want to take pictures and notes to help you remember your visit.

You have found the place you want to call home! Now you have to submit an application. (Many landlords charge an application fee, so don’t apply unless you are sure you want the place.) A rental application will typically ask for your basic biographical information, past addresses and contact information for previous landlords (if applicable), income (which you may have to verify by providing a pay stub), employer, and perhaps references. Many landlords will also check your credit report. Having late payments, an eviction, or other negative information on your credit report or not having any credit history can make a difficult to find someone willing to rent to you. That does not mean your only option is to move back in with your parents, though. Explain the reasons for any past payment problems and why they will not happen again. If you have a positive payment history for non-credit bills, such as utilities, offer to show that to the landlord. If that is not enough, you can ask the landlord if he or she is willing to accept a co-signer with a good credit history (The co-signer signs the lease with you and can be held responsible for paying the rent if you fail to pay it.) Of course, you will need to find someone who is willing to co-sign for you!

Usually within a few days or so of applying, the landlord will let you know if your application is approved. Generally, it is not illegal for a landlord to not rent to you because you have poor credit or insufficient income to cover the rent or another qualified applicant submitted an application before you. However, federal law does prohibit landlords from discriminating against applicants based on their race, national origin, religion, sex, family status, or disability. If you believe a landlord illegally discriminated against you, you can file a complaint with the Department of Housing and Urban Development (, (800) 669-9777).

Security Deposit
Before the landlord gives you the keys and allows you to move in, you usually will have to pay the first month’s rent and security deposit. As the name implies, the security deposit provides security to the landlord – he or she can take money from the security to cover money you owe. State law dictates the maximum amount that landlords can charge for the security deposit as well as the specific circumstance in which they can take from the deposit. (It is helpful to be aware of what your state’s laws are so that you know if your landlord is trying to take advantage of you.) Generally, if you cause damage to the apartment beyond normal wear and tear, the landlord can deduct the money for the repairs from the security deposit. (It is a good idea to do a final walkthrough with the landlord before you move in to document any pre-existing damage to the apartment. You would not want to be charged for something a previous tenant did.) In many states, a landlord can also deduct from the deposit to cover unpaid rent.

When you move out, the landlord is required to return the security deposit to you, minus any deductions that were made. If deductions were made for repairs, the landlord must typically provide you with an itemized statement that shows specifically what supplies and services were purchased. If you disagree with the deductions made, it is a good idea to first try to work it out with the landlord before taking him or her to court.

Signing the Lease
Another step that you will probably have to take before moving in is signing the lease. The lease is a legal document that governs the terms of your tenancy. It typically spells out the rent amount, date you must pay it by, length of the lease, and rules that you must follow (e.g., how long a guest can stay, what types of pets you can have, if any, whether you can paint the walls). Before you sign the lease, it is important to read it over carefully. If you disagree with anything (perhaps you want to have hot pink walls and the lease says that no painting is allowed) ask the landlord if he or she is willing to change it. Once you and the landlord sign the lease, it is binding for the length of the lease. This works both ways, meaning that not only do you have to follow the terms, but your landlord does too. If the lease says that the rent is $700 a month, your landlord cannot change it to $800 a month. However, once the existing lease ends, your landlord can create a new lease with different terms.

Most leases are for an extended, fixed time period (usually a year). If there is no specified time period, the lease is month-to-month. (It may be called a rental agreement instead of a lease.) It automatically renews each month unless one party terminates it. Generally, only 30-days notice is needed to terminate or change the terms of the lease, unless state law says otherwise.

If there is no written agreement at all, you are also considered a month-to-month tenant. It is generally not wise to rent without any sort of written rental agreement. Memories are not perfect, and it is easy for disagreements to arise over what was said. Also, if you wind up in court, it may be difficult to prove any verbal promises the landlord made.

Roommate Issues   
Having a roommate can be a good cost-saving move, but it is important to put the same care into selecting a roommate as you do into selecting an apartment. First, you want to look at compatibility. What is your neatness level? How often do you like to have friends over? How do you feel about having overnight guests? What is your noise tolerance? You don’t have to have the exact same lifestyle, but if you would like nothing more than to have a quiet evening of reading a book and your roommate wants to throw raucous parties three nights a week, it probably won’t work out.

You also want to consider your roommate’s level of financial responsibility. Ask to see his or her credit report and offer to show yours as well. Why is this so important? While some landlords will allow a separate lease agreement with each tenant where each is only responsible for his or her share of the rent, it is more common for there to be one lease agreement and for each tenant to be held “joint and severally liable” for the rent – meaning that you can be held responsible for the full amount of the rent. You don’t want to have a roommate that will skip out of town for after a few months and leave you to pay his or her share.

If you choose a roommate carefully, hopefully you will not have any problems. However, it does not hurt to create a roommate agreement that spells out the rules of the apartment and what percentage of the rent and utilities each of you is responsible for. If your roommate agreement says, for example, that you and your roommate are each responsible for half of the rent, that does not stop your landlord from collecting the full amount from you if your roommate does not pay, but you can go to court yourself to collect from your roommate.

After Moving In
Once you move in, it is very important to pay the rent on time and follow the rules. Failure to do either could result in you being sent an eviction notice. If you do ever find yourself in a position where you cannot pay the rent, call your landlord right away and see if you can work something out. Also notify your landlord promptly of any maintenance issues, such as a leaky rook or clogged pipe. In virtually all states, the landlord is required maintain the apartment in habitable condition. If your landlord fails to complete repairs, you may have the right to “repair and deduct” – pay for the repairs yourself and deduct the cost from the rent. Before you do this, you should be aware of the laws in your state and know under what circumstances you can repair and deduct.

Renters Insurance
Getting renters insurance can help you protect your finances. Renters insurance is just like homeowners insurance – only it is for renters. If your property is destroyed, you get money to replace it. You may feel that your ratty old futon and television are not worth much, but if you add up the value of everything you have, it is probably worth at least a few thousand dollars. However, even if the value of your personal property only totals a few hundred dollars, renters insurance could still be beneficial. It may only cost you $200 to replace your futon, but your personal liability is virtually limitless. A friend could trip on your rug and sue you for $100,000. Or your barbecue could get out of hand and destroy your neighbor’s apartment. If you have renters insurance, your insurance company will cover at least some of your costs. Don't just rely on your landlord's insurance - it most cases, it will not cover you.

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