People have different reasons for renting. Perhaps they have “graduated” from apartment living and want to get a sense of what they may expect from living in a home before they decide to buy. Perhaps, divorce, foreclosure or some other unforeseen circumstance is the reason behind renting or maybe, just maybe, a person simply has no desire to own a home because they don’t want the responsibility that comes along with home ownership. The list could go on and on.
Having over 10+ years of experience being a Landlord of my own properties and in Property Management, I’ve seen and heard it all. I always watched and paid close attention. This is how I learned. For all practical purposes, my focus in this blog is primarily for “home renters” although these basic tips/principles can be applied to renting an apartment as well. These hacks should prove helpful when renting:
- ALL RENT IS NEGOTIABLE: Just because the ad in the newspaper states rent is $1000 doesn’t necessarily mean that amount is firm. How motivated the Landlord/Property Manager/Owner is to lease the property MAY affect your ability to negotiate. NEVER LOWBALL. That’s the fastest way to have your application rejected because you won’t be taken seriously. Suggest an amount that is reasonable and fair, but be prepared to walk away if your counter is rejected.
- TAKE INVENTORY OF THE PROPERTY: Upon signing a lease, I give all tenants a checklist similar to what one would receive if renting an apartment. DOCUMENT EVERYTHING. Torn and/or loose carpet, cracked windows, carpet stains, anything other than normal wear and tear that could possibly be used by the Landlord/Property Manager to justify keeping a portion of your security deposit should be well-documented. Videotape your walk-through and take photographs to document the condition of the property prior to moving in. NOTE: Upon vacating the property/returning any keys, remotes etc., schedule a walk-through with the Landlord/Property Manager. One hanger left in a closet or cleaning supplies left under a cabinet can be considered “trash out” which could result in a deduction from your security deposit.
- UNDERSTAND WHAT A SECURITY DEPOSIT REALLY IS: A security deposit is usually equivalent to one month’s rent and it serves TWO purposes: 1) It covers the rent should the tenant decide to “skip out” on paying and 2) It covers any damages (other than normal wear and tear) the tenant may be responsible for. This is why it is necessary to schedule a walkthrough upon vacating the property. Holes in the wall/sheetrock, broken handles/fixtures ruined carpet and infestation are a few examples of deductions that could be taken from your deposit.
- DOCUMENT ALL REPAIR/WORK REQUESTS THOROUGHLY: This is for your protection. Did you know a tenant has the right to break a lease for “Landlord breach of contract?” In Texas, a tenant can. For example, if a tenant’s A/C conks out in the middle of the sweltering summer, the tenant made their first and second requests via phone call/text message (with no or slow response,) it has been longer than seven business days and the Landlord/Property Manager is taking longer than what is considered to be a “reasonable amount of time” to make the repair, send him/her a Certified Letter (Returned Receipt Requested of course) stating they have seven business days from receipt of the letter to make the repair. If the repair is not completed on or before the specified time, the tenant has the right to vacate the property and is entitled to ALL security deposits/pro-rated rent paid. NOTE: Rent cannot be withheld while repairs are being made. You are still responsible for paying the rent on time.
- BEWARE OF “RENT SCAMMERS” Always request to meet AT THE PROPERTY, not the local Starbucks or nearby cafe. If a Landlord/Property Manager refuses to meet you at the property especially for the initial viewing, an alarm should go off. Request proof of ownership. Explain this is for your protection. Any Landlord/Property Manager worth his salt would welcome the request. I do. This establishes trust between the Tenant and Landlord/Property Manager. If he/she gets angry and/or refuses to honor your request, (even if everything is legitimate,) that’s a sign to move on to the next property.
- RED FLAGS TO LOOK FOR WHEN VIEWING A PROPERTY: 1) The outer perimeter of the property is unkempt. If there’s trash in the yard and/or the lawn isn’t manicured (and by manicured I mean cut, edged, shrubs pruned) there may be very little hope to expect any better inside. Curb appeal is everything. 2) The utilities are disconnected. I don’t know about you, but I flip every switch, turn every knob open every door and push every button to make sure everything is working when “previewing” a property for a client. At the very least, the electricity should be connected. 3) An unkempt interior, signs of possible infestation, foul odors, torn, worn or dirty carpets/walls, holes in the walls, chipping paint, unclean appliances or appliances that don’t work, and bathrooms that aren’t clean are just a few items that should set off red flags. A lot of these are “no brainers.” Beware of the Landlord/Property Manager who makes a promise to repair/replace items and/or paint and replace carpet prior to a tenant moving in. DO NOT give him/her your security deposit let alone sign a lease until the repairs/upgrades have been made, you have viewed the property a second and possibly a third time and are satisfied with the property’s current condition.
- NOT ONLY SHOULD YOU ASK QUESTIONS, ASK THE RIGHT QUESTIONS: When is rent due? Is there a grace period? What about late fees? Is the property’s mortgage CURRENT? Is the property currently in foreclosure/pre-foreclosure? NOTE: You have the right to ask this question. There have been so many cases where tenants become displaced because the property owner continued collecting rent knowing foreclosure procedures have, had or are about to commence. Is the property pet-friendly? Is there a weight limit for my pet? Is a pet deposit required? Is the property “smoke free?” What appliances will the owner provide? What utilities am I responsible for? NOTE: Tenants, it is imperative to do your “due diligence” in finding out if registered sex offenders reside in the area or close by.
- BE HONEST: If your credit is “less than stellar,” let the Landlord/Property Manager know upfront. I don’t solely use credit scores to determine if I’m going to rent to a Tenant, but I do run credit reports. Case in point: My BEST tenant of EIGHT YEARS (and counting) had a credit score of 505 and has NEVER been late paying rent… EVER. Don’t tell the Landlord/Property Manager only you, your spouse and your young child will be residing at the property when it’s actually you, your spouse, your young child, your two step-children (who come bi-weekly) and your mother-in-law who will actually be living in the home with you. Any misrepresented information on your application could justify means for eviction. It’s easier to just tell the truth.
- KNOW HOW MUCH RENT YOU CAN COMFORTABLY AFFORD: Don’t look at homes to rent you know you can’t afford. I wish there was a “pre-qual” letter for potential renters as there is for potential home buyers. This way precious time isn’t being wasted. As a good rule of thumb, like a mortgage, the amount of rent shouldn’t be more than 28% of your net income.
- ALWAYS REVIEW YOUR LEASE (PREFERABLY WITH THE LANDLORD/PROPERTY MANAGER) BEFORE SIGNING: Ask for clarification on any clauses of the lease you do not understand. The duration of most home leases is one year. Find out procedures for renewing your lease (if applicable,) holdover amount (i.e. month to month) work/repair order procedures and the like. There is no such thing as a dumb question when it comes to understanding your lease and ignorance is no defense.
- SECURE RENTERS INSURANCE: I CANNOT TELL YOU HOW INPORATANT THIS IS. Many tenants assume because the property is insured, their contents are insured as well right? WRONG! If a catastrophic event at one of my rental properties such as a fire (God forbid) were to happen, and everything was completely destroyed, my insurance will cover the replacement cost of the structure ONLY. A Landlord IS NOT responsible for your property/personal effects, so if you have Cantoni furniture and top of the line flat screen televisions/surround sound systems in each room, even if you have your furniture from college, RENTERS INSURANCE is highly recommended. Paying $13/mo for approximately $20K of coverage is worth it. It’s always better to be safe than sorry.
These are just a few important tips any renter should know. Although a Landlord/Property Manager may be knowledgeable, there’s no reason why you, the tenant can’t be knowledgeable as well. Happy House Hunting!!!
~The Financial Hack
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