10 Steps to Finding Your First Rental

February 6, 2013 By Leave a Comment

Apt. for rent

When you’re looking for an apartment for the first time, it can be overwhelming. The best way not to panic is to break the process down into 10 sequential steps. The timeline will mostly depend on how long it will take you to save the upfront cash you’ll need, but after the money is in the bank, you should be in your own place in no time.

Determine your price range

There are two common ways to do this: You can divide your monthly take-home income by three. (For example, if you take home $1,800 a month after taxes, you could afford a place that costs up to $600 per month.) Or divide your annual gross income (before taxes and other deductions) by 40. (For example, if you made $40,000 a year, you could afford a place that cost up to $1,000 per month.) Either way gives you a rough idea of your maximum budget.

Start saving

Before long, you’ll need to put down a security deposit (usually equal to one month’s rent), plus the first month’s rent. And that doesn’t even include application fees and credit-check fees you may be charged. So start saving now, particularly because moving itself can cost anywhere from $200-$2,000, depending on the distance of the move and how much you do yourself.

Check your credit

Management companies will be checking your credit once you start applying. You don’t want to be caught flat-footed, so check if there are any blemishes on your report at the free Annual Credit Report website, which is sponsored by the federal government. If you have great credit, you have nothing to worry about. If your credit has blemishes, you may need to ask a friend, parent or relative if they would be willing to serve as your co-signer on a lease. In any case, be ready to explain your low score to potential landlords and what you are doing to fix it.

Settle on a neighborhood

Whether you’re moving crosstown or across the country, the best way to decide on a neighborhood is to visit. Also, ask friends who already live in the neighborhood what they think. Another thing to consider is affordability — we’d all love to live in SoHo, but most of us can’t afford it. In other words, be realistic. To determine the cost of a neighborhood, go online to see what an average 1- or 2-bedroom runs. A good rule of thumb is that at least a third of the listings in your neighborhood of choice should be within your budget. If it’s any fewer than that, you’re going to have limited options.

Start looking

Find listings online, but also remember to network among friends and colleagues, respond to “For Rent” signs you see in-person and cold-call management companies that have appealing buildings. If the rental market in your chosen city is really tight, you may need to use a broker. That will typically cost one month’s rent, so to move in you’ll need to have three months of rent in cash. Ouch! Also, be wary of red flags. If you know a particular landlord or management company is involved in poor practices, don’t even bother looking at their places.

Another word of advice: If something seems too good to be true, it probably is. When dealing with a potential landlord, the conversation should be respectful and straightforward. And remember to always Google the address of the building as a final precaution.

Put in an application

Once you find a great place, don’t get cold feet. If it’s within your budget, in a neighborhood you love and with a solid management company, then apply. If your credit score is good — or you have a co-signer lined up — you’re likely to get it!

Sign the lease

Your lease is a contract, so make sure you understand it. Often, if you have issues with certain points on the lease, you can alter or discuss them with the management company before signing. So read the lease carefully. A few things to look out for: the penalty for breaking the lease early, the policy for fixing issues with the apartment, how much notice you must give if you want to renew and the rules for getting your security deposit back.

Transfer/set up your utilities

Call the utility companies at least a week in advance, so you have a buffer in case you need to schedule an appointment. Other things to think about: You should get renter’s insurance before you move in, and you should also change your address with the USPS. Depending on where you’re moving, you may also need to register for parking stickers, change your driver’s license (if you’re changing states) and get a local library card.

Conduct a walk-through

During the walk-through, you need to document any pre-existing problems you find with the apartment, so that you’re not held liable. This means testing everything from the burners on the stove to the quality of the carpet to the functioning of the refrigerator. If anything’s off, document it. If the landlord needs to fix something, get it in writing. This is the best way to protect yourself, your future home and your security deposit.

Make the move

If you’re moving long distance, schedule movers several weeks in advance (prime dates book up quickly). If you’re finally moving out from your parent’s basement, they’ll probably help you pack up the station wagon and drive you! In any case, start packing early: It takes longer than you think, and if you’re not totally packed when the movers arrive, you’re courting disaster. Also, label your boxes and make sure you have staples such as toilet paper, light bulbs and cleaning supplies at the ready. You’ll need them right away when you move in.

This may all seem like a lot, but if you break it down step by step, finding and moving to a new apartment becomes very manageable. And nothing beats that great feeling you’ll have when you first walk into own apartment.

Find Rentals on The Peral Group

Filed Under: Uncategorized Tagged With: , , , , , , ,

Can a Landlord Force Tenants to Have Renter’s Insurance?

December 19, 2012 By Leave a Comment

DATE:DECEMBER 18, 2012 | CATEGORY:TIPS & ADVICE |AUTHOR:PROFESSORBARON.COM

More and more landlords these days are requiring renters to have a renter’s insurance policy in place during their tenancy. There are a lot of benefits to both the landlord and the renter as a result of the tenant having a policy. And renter’s policies are inexpensive — about $125-$175 per year — and give a renter decent coverage for the cost. Let’s first talk about why you should have the insurance in place, then answer the question of whether a landlord can require a tenant have renter’s insurance.

Why have a renter’s policy?

Unfortunately, things happen. Houses get robbed, units flood and suffer property damage, fires destroy belongings. The reason you have insurance is so that when these things happen, you don’t have to shoulder the entire cost on your own. The insurance company steps in and helps out, so the problem isn’t as disruptive to your life and livelihood as it would have been if you had not had that policy coverage in place.

And a renter’s policy protects not just your personal property — like TVs, clothing, couches, computers — in case of a loss, but it also provides some liability protection in case the dog bites someone, you cause a flood to other units or a guest at the property gets hurt.

Lastly, many policies will provide cash to cover temporary living costs and rent on another unit in case you cannot live in the apartment due to damages. Talk to your insurance agent regarding this and all the coverage components.

Can insurance be mandatory?

Insurance is a contractual issue between you and the owner of the property. If you have an existing lease that doesn’t require it, then you don’t have to carry it.

But when your lease is up for renewal, the owner can require it as a term of your new lease or any lease extension.

Overall though, it’s a small price to pay for some fair coverage. Before you fight having it, call your insurance agent and get a quote for basic coverage, like $25,000 in personal property coverage. You’ll probably get a lot more information from your agent, and hopefully decide that getting the coverage is really a good idea to give you some added insurance protection in life.

Courtesy of your Arcadia Real Estate Agent

 

Filed Under: Bussiness Tagged With: , , , , ,

Rising rents outpacing home sale prices

November 11, 2012 By Leave a Comment

By Vicki Needham - 11/05/12 04:30 PM ET

Increasing rents are outpacing the rise in home prices as the housing market makes gradual improvement.

Rents rose 5.1 percent year over year, with price increases driven by job growth, fewer vacancies and completed foreclosures, according to a housing index released Monday by Trulia, a group that tracks the market’s trends.

Asking prices rose 0.7 percent in October, while increasing 2.9 percent year over year.

“Home prices are climbing in most local markets and in eight of the 11 swing states,” said Jed Kolko, Trulia’s chief economist.

 

“Rising prices have taken pressure off the presidential candidates from having to come up with detailed plans to help the housing market, and that’s a big reason why they haven’t focused on housing in the 2012 campaign.”

 

Rents were up even in cities where sales prices fell, with bumps of 7.7 percent in Chicago and 8.6 percent in Philadelphia.

Excluding foreclosures, asking prices rose 3.6 percent.

Home prices were up year over year in 69 of the 100 largest metros, with prices in Phoenix up almost 25 percent, while they were down more than 5 percent in Chicago.

The top 10 price increases, which ranged from 8.7 to 24.9 percent, included three cities in California — San Jose, Oakland and San Francisco.

By the end of December, prices nationally should be just 1.1 percent below their level in January 2009.

Houston led the way in rising rents, with the top 10 metros seeing increases between 6 and 16.5 percent in the past year.

“Continued widespread price increases are good for homeowners but not for home-seekers,” Kolko said. “For homeowners, rising prices add to their wealth and help bring underwater borrowers closer to positive equity. For home-seekers, however, rising prices could put homeownership out of reach.”

COURTESY OF YOUR NUMBER ONE ARCADIA REAL ESTATE AGENT
Filed Under: Market Tagged With: , , , , , ,

1.7 million new renters expected in next three years

November 7, 2012 By Leave a Comment

Posted by kpanchuk on 11/6/12 at 8:59am

The changing dynamics of today’s housing market could create 1.7 million new multifamily renters between now and 2015, Freddie Mac’s Multifamily Research Group said this week.

The government sponsored enterprise expects the homeownership rate to fall 1 to 2 percentage points if the slow economic recovery continues.

The nation’s expanding renter pool is the result of economic stress, high foreclosure rates and changing demographics, the research group asserted in a new study.

The takeaway from the study is that rental demand is only expected to rise in the coming years.

Individuals and families looking for homes to rent also increased in recent years as the pool of qualified homebuyers shrinks.

The single-family rental market has grown 16% since 2007, suggesting renting is popular across housing product types.

“The research supports the optimism that currently pervades the multifamily market,” said David Brickman, senior vice president of Freddie Mac Multifamily. “It confirms that multifamily is a bright spot in the real estate market and the economy more broadly, and it will likely continue to shine for quite some time.”

kpanchuk@housingwire.com

COURTESY OF YOUR NUMBER ONE ARCADIA REAL ESTATE AGENT

Filed Under: Market Tagged With: , , , ,

Are Rising Rents Too Much of a Good Thing?

October 30, 2012 By Leave a Comment

Oct 19, 2012 12:18 PM, By Bendix Anderson, Contributing Writer

It seems like such good news—apartment rents are rising faster than inflation. That means more profits for real estate investors.

 But there’s also a risk. When rents rise faster than the paychecks of your residents, then that puts pressure on their budgets. Eventually they may look for other options. If you’ve carefully marketed your apartment community to a certain set of residents—say retirees or workers at the local hospital—it’s bad news for you if those people can no longer afford to live there.

“Landlords need to be careful,” says Brad Doremus, senior analyst for data firm Reis, Inc., based in New York City. “They can’t raise rents forever or they come up against that budget constraint.” Property managers should worry about competition from new rental housing, cheaper rental housing and even for-sale housing. Eventually it will become clear to everyone that the for-sale housing market has bottomed and prices are rising, and residents paying sky-high rents will start looking seriously at homes or condominiums.

 

INCREASED PRESSURE ON RENTERS

 

How high is the pressure on your renters? The cost of housing rose 52 percent between 2001 and 2010. The cost of transportation rose 33 percent. Taken together, that works out to a 44 percent increase. But over the same period, household incomes rose just 25 percent. Taken together, it adds up to a huge loss of disposable income, according to “Losing Ground: The Struggle of Moderate-Income Households to Afford the Rising Cost of Housing and Transportation,” a new report from the Center for Housing Policy and the Center for Neighborhood Technology.

And a loss of disposable income is a big problem for many renters.

The cost of rental housing has risen even more since 2010. Effective rents on average grew 2.9 percent between end of the third quarter 2012 and the same time last year, inching out the consumer price index, according to Reis. CPI rose 2.0 percent over the year that ended in September. The year-over-year rent hikes were much higher in hot markets like San Jose (4.2 percent) and San Francisco (5.8 percent).

Once you add transportation and housing together, the cost can be overwhelming for moderate-income people. The report defines “moderate-income” as people who earn between 50 percent and 100 percent of the area median income. That’s between $30,000 and $60,000 a year in most markets. These families now pay more than three out of every five dollars—59 percent of their income, on average—on housing and transportation costs.

“The landlord might think there is an opportunity to raise rents, but the market might be volatile enough that they back themselves into a corner,” warns Scott Bernstein, president of CNT. Rental residents may be forced to downsize to other, cheaper housing.

 

THE NUMBERS HAVE A BRIGHTER SIDE

 

But Bernstein also sees an opportunity in the numbers. An apartment community that is located in a place where transportation is less expensive may become much more attractive for households looking to reduce their expenses.

If a moderate-income family can live in a place where the need one less car to get around, that works out to a 10 to 15 percent increase to their disposable income. “It’s the equivalent of 10 percent to a 15 percent raise,” says Bernstein. Smart Growth advocates like Bernstein encourage “location efficient” new development, where residents can walk or take the train to amenities like shopping and employment.

Looking at the cost of housing and transportation together also shows real estate investors what not to worry about. Competition from for-sale housing built far away from jobs and services is probably not coming back anytime soon. “This undercuts the whole idea of ‘drive till you qualify,’” says Bernstein. “I don’t see those markets turning around quickly.”

In contrast, apartments in efficient locations are attractive to renters on a budget. “Press your advantage on transportation,” says Bernstein. “Tell people what it costs to get to a from that building typical locations.”

COURTESY OF YOUR NUMBER ONE ARCADIA REAL ESTATE AGENT

Filed Under: Market Tagged With: , , , ,