- Real Estate
Keys to Renting Your First House
Weigh the Cost of Renting a Home
Houses have hidden costs.
If this is your first time renting a home it is probably because you have lived in an apartment up until now. Realize that if you move into a house not only is the rent going to be more, there are likely to be utilities that aren't taken into account until you get the first month's bills.
In an apartment you typically pay electricity, gas, Internet, cable and a flat fee to the rental company for the rest. For a house the renters will typically pay all that plus water, trash and sometimes sewage and HOA. Also you're paying heat and electricity for a bigger space, so expect those bills to increase. Get good estimates for these bills in you area and keep them in mind because you'll use them down below.
You'll Be Under the Microsope
The landlord will do a background and credit check.
It's typical for a property management company or the private owner to have you pay for a credit check and a background check for every adult that is moving in. The credit check will show your score, any late payments that were reported and any accounts that have gone to collections. The background check will show any violent convictions or evictions.
That means it's important to pull your own credit report from a free or paid site before you start house hunting. It's also important to understand the credit and criminal history of everyone you're moving in with. Your buddy might have a charge a while ago he forgot to mention or your girl friend might have terrible credit because she doesn't have any history. You have to know this going in.
Important note: if you do get rejected after paying the application fee, ask why and ask for your credit report and background check results. The landlord or owner is legally obligated to provide you with the reports (you did just pay for them). Take a look at the negative information so you know why you were rejected. Now you'll know what every landlord will see when they run your reports so you can be upfront about the information.
How to rent if you have bad credit
In many cases the listing from a property management company will specifically state the minimum score they will consider (usually 600 or 650). This does not mean that if you are above this you are automatically approved. If you are below this there are cases when the landlord will accept your application with the stipulation that you pay a higher deposit up front. But if the market is hot they probably have enough applicants already that are over their cutoff so it's not worth asking.
That doesn't mean you're doomed to never find a home. There are listings you can find that say bad credit is okay. Also you might have better luck renting from a private owner. Most likely they'll run a credit check too but you can tell them up front what your score is and how you can compensate:
- Prove a gross monthly income that is 3x or more the rent
- Offer to pay a higher deposit
- Offer to pay the last month up front
- Show a solid rental history and provide previous landlords as a reference
Know what you want. And revise as you go
Before you run out and go to every open house in town, take a bit to think clearly about what you want in a house. Talk to the person or people you are moving with. Some important questions to have the answers to before you look at listings:
- Location? It's good to keep this broad at first but do set limits.
- Price Range? Think about what you can pay and what you should pay. Come up with a hard upper limit you know you can't go beyond. Keep in mine the criteria you would need a home to have in order to commit to one at your price limit.
- Lease Length? Most places rent for 12 months but some will only take tenants that will sign a 2 year lease.
- Move in date? If you're feeling particularly
- Number of bedrooms? Take into account kids or housemates and if you want an extra room for an office or guest room.
- Pets? Many places accept pets and most are more accepting to adults.
- What extras are important? This could be a yard, a garage, extra storage, garden, finished basement, etc.
Many rental search engines have filters you can apply with your answers to these to ensure you're not wasting your time looking at a place that isn't the right fit for you.
Combing through listings and going to a few showings might change your mind about a few of these. And that's okay. It will help you realize which ones are important to you and which ones you can be flexible on.