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National lender honored for its excellence in helping low-income homebuyers
MERIDEN, Conn., May 17, 2023 /PRNewswire/ — Planet Home Lending has been named a 2023 winner of the Freddie Mac Home Possible RISE Award ®, which recognizes lenders that are making great strides in helping low-income homebuyers through the Home Possible® loan program.
The honor is especially meaningful as it recognizes Planet’s commitment to core values of supporting, strengthening and caring for people during the most important financial moments in life.
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Life happens and sometimes you need to get out of your lease early. However, if you’ve signed a long-term lease, you may not be able to break your contract without financial or legal repercussions. This is called a sublet, and we’ll share the definition and meaning here.
Subletting is a viable option for those who need to get out of their lease early. Here’s everything you need to know about subletting so you can understand if it’s the right option for you.
What is subletting?
Subletting, also known as subleasing, is when you add one (or more) people to an existing lease. Typically, the subletter, signs a lease agreement with you directly, instead of the landlord.
Simply put, you are still the primary renter and are on the original lease, but have a sublet agreement where someone takes over in your place for a designated amount of time. The subletter will move in, take over rent payments and live in the space until the sublease contract is up.
When to consider subletting
You may be wondering what scenarios make sense to sublet an apartment. Well, here are a few cases where it might.
- You are going on an extended trip or vacation
- You need to move temporarily for work, family or personal reasons
- You have a roommate who moves out and you need to fill his or her place in the existing apartment
- You are considering moving to a new city and want to test living in that area before making a long-distance move
While each situation is different, the common theme here is that the renter needs to vacate their current apartment for a period of time before the original lease ends without breaking the terms of the lease.
Subletting is a great option if you need short-term coverage of your rental property.
9 things to do before subletting your apartment
Before you post a “wanted” ad and start interviewing potential subletters, you need to do your homework first. The last thing you want is to be in violation of your lease. So, here is everything to consider before you sublet your apartment.
1. Read your existing lease
When you signed your lease, you may not have read all the fine print. The first thing you need to do is to re-read the original lease agreement to see if subletting is allowed. If so, great! You can move on to step two and talk to your landlord. If subletting is not allowed, you need to come up with a plan B if you really must break your lease early.
2. Talk to your landlord
Clear communication is key when subletting an apartment. Before you sign any paperwork, talk to your landlord and tell them the situation. Explain why you need to move and by when, plus talk to them about your subletting plan and make sure you’re following the proper protocol for subletting.
3. Check out local renter laws for a sublet
Another smart thing to do is to read up on your local renter’s laws. Different states have different laws around things like subleasing, rent pricing and maximum rent prices and length of the lease. Make sure you are in compliance with your landlord and local laws.
4. Draft up a sublease agreement
Even if you’re subletting to your family or BFF, you need to make it official and create a sublease agreement. Word-of-mouth agreements will not provide legal coverage should the worst happen. You can work with local lawyers or your landlord or find a template online for a sublease agreement.
In the sublease, you need to include things like the pet policy, smoking policy and any other rules and regulations that must be followed as part of the original lease. You don’t want to be on the hook for a bad subletter causing damage to the apartment.
Make sure your subletter puts pen to paper, understands the terms of the lease and signs the sublease agreement.
5. Determine the financial responsibilities of the subletter
Chances are you aren’t able to pay rent in your existing location and a new location. So, you need to outline the financial responsibilities for the subletter. Let them know how much they owe in rent and how much they can expect to pay in utilities. You may need to change names on the utility accounts or have the subletter pay you directly for the cost of utilities. Make sure the numbers are clearly outlined so there isn’t confusion about who owes what each month.
6. Outline a timeline for the sublease
If you are in a 12-month lease but are subletting for six months, let the subletter know that. You need to walk through the timeline of how long a subletter will sublease from you and when they need to move out or re-sign in their own name.
7. Talk to other stakeholders
If you have roommates, you need to loop them into the subletting discussion. While they likely don’t want to experience a rent increase by having to make up for the difference, they also want a say in who lives with them when you leave. Before you make any subletting arrangements, talk to the relevant stakeholders about your plan to move out.
8. Post an ad and market your rental opening
Once you’ve dotted your “i’s” and crossed your “t’s” with the steps above, it’s time to market your open rental space. You can use places like online housing boards, social media groups or local newspaper ads. Remember that you are still responsible for rental payments until a subletter is officially in place.
9. Plan your move
Last but not least, it’s time to plan your move. Let the relevant people know when you’re leaving and when you’ll be back.
Pros and cons of subletting
Now that we’ve talked about the logistics of subletting, it’s time to talk about some pros and cons.
Benefits of subletting
Here are some of the pros of subletting:
- You can end your lease early without being in breach of the contract
- You can maintain your renter reputation without breaking your lease early
- You can supplement your income by having someone else pay your lease
- You can tend to the business that required you to move out in the first place while having your current apartment taken care of.
Downsides to subletting
Here are some of the cons of subletting:
- It may not even be allowed by your property manager or existing lease
- Your subletter might not be as good of a roommate as you were
- You need to find a reliable subletter to take over the sublease
- You still need to maintain communication with your subletter, even when you move out
- You’ll need to deal with the paperwork of ending your original lease when the time is up
Is subletting right for you?
We can’t make the decision for you, but subletting might be a good option if you need out of your lease without breaching the contract. A sublet, if allowed by your apartment complex and state, is a great way to keep your rental history reputation strong and have viable rental coverage when you move out early.
Make sure you follow proper rules and procedures when subletting. If you’ve done that, then it’s time to find your next apartment in your new destination.
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This is a guest post from Lisa Lessley Briscoe.
My friend (and fellow Bearcat) Lisa writes: “I was just poking around on GRS (I don’t usually read) and noticed that you’d posted an entry for college graduates recently. Funny how summer rolls around and you start thinking about stuff.” She’s passed along some additional advice for those just entering the workplace.
Congratulations, you just graduated from an excellent liberal arts college!
You worked incredibly hard to complete your degree and now it’s all behind you: general education requirements, a wealth of extracurricular activities, those classes for your major and minor, perhaps a semester abroad, and a thesis and its accompanying oral defense. You’ve invested a great deal of time, effort, and money into your degree and now you’re ready to conquer the world.
Where to live? Pack up that futon and wave goodbye to your family! You find a city that suits you (say, Seattle), settle in after an age-old argument with your housemates over who gets which room, and get started on the job search.
Sure, your resumé isn’t bursting with experience (after all, how far can you stretch your meager retail and accounting clerk duties from summer jobs?), but you know you’re smart, energetic, and ambitious, not to mention the liberal arts clincher: you’ve “learned how to learn.”
You mail your resumé to a number of prospective employers, but no one calls back. You try to network, but no one knows of any available jobs. Your mother begins asking how long you’ll look before you decide to move back home. Things are bad.
What to do? The rent must be paid, not to mention the car insurance and grocery bill, even if it’s just Top Ramen. Ah, well, it appears that Queen of the Photocopier is the best title you’ll get. Your roommates are bank clerks and receptionists, and the all-you-can-eat buffet at the local pizza joint becomes a regular event in your week. (One roommate sneaks out extra slices in her pockets.) You are underestimated, frustrated, and misunderstood.
I was there, believe me. And I feel your pain. Looking back fifteen years later, here’s what I wish someone had told me…
You lack experience. Regardless of all your education and energy, you just don’t have it. And there’s no way to gain that experience without working for a while. It stinks and it’s unfair, but that’s the way it is. To really excel in a field — any field — you must be in it day after day.
Out in the world, you need to have something to show, and you often have to earn it by tedious drudgery. While you’re busy being a peon, some people will completely ignore your existence, some will assume that you aren’t capable of an intelligent thought, and some will be downright condescending and mean. It’s profoundly frustrating.
However, working for a few years as a copy clerk, a receptionist, an office boy, a customer service representative, or whatever, does not condemn you to a permanent career in that position. When I turned 25 and found myself working as a receptionist, I was profoundly depressed. I was certain that I would be stuck in that chair with a headset forever. It may take a year or two, but you certainly can transition into something else if that’s what you want.
Now, here’s what I really wish that I’d known… If the less-than-entry-level jobs are virtually unavoidable when you have just finished college, use them to your advantage. So, you have to be a receptionist/copy clerk/customer support rep for a year or so; make the most of it. Take a job in a field that interests you. Use your time to be exposed to the jargon, attitudes, and daily vibe of the field. Sure, you may have limited exposure, but every little bit counts.
- While you’re answering phones, you’re also meeting people in the field who will be invaluable contacts later on.
- While you’re transcribing dictation, you’re learning the terminology used in the field.
- While you’re numbering legal documents, you’re seeing how a court case is supported.
For example, I worked for a few years at a law firm, a field that had never held much interest for me. I almost put myself into law school, in large part because of some experience and a glowing recommendation from a partner in the firm. (Why I didn’t go is a long story; suffice it to say that I’m glad I didn’t do it.)
Law-firm Lisa, circa 1993
Want another story? My husband applied to a number of architecture schools without much success a year or so after graduation. The following year, he worked as an office boy at an architecture firm (while working as a barista on the weekends). The combination of resources for creating a more sophisticated portfolio and references from within the field produced a completely different experience the second time he applied: he had a number of excellent choices for school.
Okay, one more that doesn’t involve graduate school. After parting ways with the law firm, I decided that I wanted to be a technical writer in high tech. My year of purgatory as a receptionist was unsurpassed in misery, but I transferred straight out of that into the job I wanted and soon thereafter into a company where everyone wanted to work.
My primary regret now is that I didn’t do those peon jobs in fields that fascinated me. Why not be a receptionist at an art museum? How about a translation company or one that did language classes? There was a world out there that I didn’t reach out and grab, and I regret it.
Now that I have job experience, my job searches are different. It is unnecessary for me to take an entry level job to get where I want to go. And my liberal arts education certainly is an excellent asset when it’s paired with experience. I wouldn’t have it any other way.
But for you, O recent college graduate, do your drudgery but make it count… Pick the field and then the job; I certainly wish that I had.
Thanks, Lisa! The recommendation to find an entry-level job in a field that interests you is spot-on. I wish I had done this, too. For more advice about starting a career, check out:
Look for a second guest-post from Lisa in mid-July.
Source: getrichslowly.org
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Interested in a career as a cosmetologist? Enrolling in an accredited beauty school is a smart first step to take.
One important consideration is how much cosmetology school costs. Tuition can run several thousands of dollars per year and will likely be one of your biggest expenses. But there are other costs to consider as well. Keep reading to learn about the cost of cosmetology school and ways you can help lower your financial burden.
How Much Does Cosmetology School Cost on Average?
Beauty school students can expect to spend anywhere from $5,000 to $20,000 for tuition and fees. The cost of cosmetology school can vary based on location. Schools in major cities tend to charge more than those in smaller communities. To get a full list of expected tuition and expenses, contact the school’s admissions office.
How Much Do Books and Materials Cost?
In addition to tuition and fees, you’ll also want to budget for the cost of books and materials. Textbooks alone can range from $2,000 to $3,000 or more, depending on your instructor. Add to that the cost of any supplies and tools you’ll need to help you practice your craft. Think shampoos, conditioners, styling products, scissors, electric clippers, mannequins, and more. Your cosmetology school may provide some of these materials, but others you’ll need to buy.
How Can You Reduce the Cost of Cosmetology School?
Though cosmetology school typically takes less time to complete than a four-year college, the costs of those few semesters can add up quickly. The good news is, there are different ways you can help lower your financial burden.
Apply for Scholarships and Grants
Scholarships may be based on merit or financial need and generally don’t need to be paid back. Cosmetology schools can point you toward scholarship opportunities, or you can do an online scholarship search to find out what’s available to you.
Grants are typically based on financial need and are offered by the federal government, state government, private companies, and nonprofits. They’re generally awarded in a federal financial aid package. Like most scholarships, grants don’t have to be paid back.
Consider Student Loans
Student loans can help you cover the cost of attending cosmetology school. In general, it’s a good idea to exhaust all possible federal student loan options first before applying for private student loans. Federal student loans have a fixed interest rate that’s usually lower than private loans and also provide certain safety nets like forbearance or deferment.
Recommended: The Differences Between Grants, Scholarships, and Loans
Fill Out the Free Application for Federal Student Aid (FAFSA)
Filling out the FAFSA application is how students can find out how much federal financial aid they’re eligible for, including loans, grants, and scholarships. The FAFSA applies to a single academic year, which means you’ll need to submit a new form each year. To maximize your potential aid, aim to turn in the FAFSA before the annual deadline.
Recommended: FAFSA Tips and Mistakes to Avoid
Save on Textbooks
Cosmetology school textbooks can be pricey. To help lower costs, look into renting textbooks or buying them used. If you do purchase textbooks, consider selling them once the semester ends and putting that cash towards the next set of books.
Rent Supplies
You may be able to rent certain supplies or supplies instead of purchasing them. This is especially helpful for equipment you won’t need after graduation, like practice mannequins.
Live at Home
If possible, move in with family or friends while you’re in school to save on housing and living expenses. If that’s not an option, look into renting a place with roommates and splitting the costs.
Find a Part-Time Job
Getting a part-time job can help you cover some of the cost of cosmetology school — and maybe even take out less in student loans. Look for gigs with flexible hours that allow you to more easily balance work and class. Consider working in an on-campus student salon, if one is offered at your school. Besides the additional practice, you could also make some extra money.
The Takeaway
The cost of cosmetology school can be significant. Tuition runs anywhere from $5,000 to $20,000, and textbooks, supplies and living expenses can add to your financial burden. But there are ways to cover costs, including scholarships, grants, a part-time job, and student loans.
3 Student Loan Tips
Here are our top three tips to help you understand and navigate student loans.
Complete the FAFSA
Even if you don’t think you qualify for financial aid, you should still fill out the FAFSA form. Many schools require it for merit-based scholarships, too. You can submit it as early as Oct. 1.
Understand Your Borrowing Options
Would-be borrowers will want to understand the different types of student loans peppering the landscape: private student loans, federal Direct subsidized and unsubsidized loans, Direct PLUS loans, and more.
Consider Federal Aid First
It’s a good idea to exhaust all available federal aid options before exploring private student loans.
Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.
FAQ
How much is one year of tuition at an accredited cosmetology school?
Beauty school students can expect to spend anywhere from $5,000 to $20,000 for tuition and fees. But the amount you’ll pay may vary depending on where your school is located.
How long is cosmetology school?
It depends on your program. The national average for a full cosmetology program is between 1,400 to 1,600 hours, according to the American Association of Cosmetology Schools. Full-time students typically finish that program in less than two years. But certain programs are shorter and can be completed in six months or so. For instance, the national average for nail technology is 300 hours; for electrologists is 500 hours; and for esthetics is 650 hours.
Is a high school diploma required to attend cosmetology school?
Some states require a high school diploma or G.E.D., but others do not. You may also need to be a certain age to apply for beauty school. Check the rules in your state to find out if you’re eligible.
Photo credit: iStock/Kemal Yildirim
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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Source: sofi.com
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Inside: Are you thinking about moving out? This guide will help you figure out how much money you need to save and where to find affordable housing. Will $5k be enough to move out?
Moving out for the first time is a huge milestone. It’s a chance to start fresh, create your own space, and live on your own terms.
But it can also be a daunting prospect, especially when you’re trying to figure out how much it will cost.
You want to know if $5,000 is enough to move out?
But there are a lot of factors to consider before making the decision to move out, and we’ve laid them all out for you in this ultimate guide.
So whether you’re just starting to think about moving out, or you’re ready to start packing your boxes, read on for everything you need to know about making the big move.
How much money do I need to move out?
Experts recommend having at least $6,000 to $12,000 saved up before moving out.
However, it’s possible to move out with as little as $5,000 if you focus on knowing how to live cheap and have a stable source of income.
However, if you don’t have a job before moving out, the need for a huge savings account is huge.
How much money should I have if I want to move out?
The minimum amount of money required to move out will depend on where you plan to live and your living expenses.
Shortly you will learn factors to include initial moving costs, rental deposit, and ongoing costs like rent, utilities, and food.
If you are looking to move out in an HCOL area, then you will need more than an LCOL city. At this point in your life, it is important to understand HCOL vs LCOL and how it affects your finances.
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
What are the expenses you should consider when moving out?
Moving out on your own can be a daunting and expensive task.
There are many expenses to consider when budgeting for your new place especially when you are learning how to move out at 18.
This guide will help you estimate the cost of moving out and provide tips on how to save money.
1. Rent/Utilities
The cost of rent varies depending on the location and size of the apartment or home, with the median rental cost in the US being around $1700 per month.
Along with rent, utilities like electricity, gas, water, and internet can cost around $400 per month.
To save money on rent and utilities, consider finding roommates to split costs or negotiating with landlords for a lower rent.
Rent is your biggest expense when figuring out the ideal household budget percentages.
2. Rent Deposit
When renting an apartment, you will typically need to provide a rent deposit. This deposit is a sum of money paid upfront to the landlord to cover any damages or unpaid rent at the end of the lease.
The cost of a rent deposit can vary depending on the location and the landlord’s requirements, but it can range from $1,000 to $5,000 or one to three months of rent.
To save money on a rent deposit, consider looking for apartments with lower deposit requirements or negotiating with your landlord for a lower amount. A clean rental history will help you with this.
3. Moving Expenses
Moving out can be an expensive process, but with some planning and budgeting, you can keep costs under control.
When considering moving expenses, be sure to factor in the costs of moving truck, packing supplies, such as boxes and tape, as well as the cost of hiring movers
To save money on these expenses, try finding free packing materials on Buy Nothing groups or ask friends and family to help you move. You can also minimize your possessions and have less to move.
4. Renter’s Insurance
When moving out and renting a home or apartment, it’s important to consider getting a renter’s insurance policy to protect you from unforeseen events.
Home insurance, also known as renter’s insurance, is a special type of insurance policy that protects your property against losses or damage stemming from covered perils, including fires, storms, or theft. It can give you peace of mind and help you repair or replace your possessions in the event of unforeseen situations.
Insurance premiums are based on various factors, including where you live, how much you choose to insure, and your deductible. Your credit score and history may also affect your insurance rates.
5. Furniture and Appliances
When moving into a new home, it’s important to consider all the necessary expenses for furnishing the space. This includes appliances like a refrigerator, stove, oven, and microwave, as well as daily living items such as a mattress, table, and couches.
I remember when I moved into my first apartment by myself and there wasn’t a washer or dryer in the apartment. Just hookups. I had one of two choices: 1) rent from the management company for $35 a month or 2) buy new appliances with 0% interest for $35 a month. I choose option #2 and it saved me money in the long term.
To save money, consider buying used furniture from thrift stores or online marketplaces like Facebook Marketplace. You can also find plenty of free furniture if you are not picky.
By being thrifty and smart with your purchases, you can furnish your new home without breaking the bank.
6. Housewares
When moving out on a budget, it’s important to consider the essential housewares you’ll need to make your new place feel like home. Here’s a list of must-haves and their estimated costs:
By prioritizing these essential housewares, you can make your new place feel like home without breaking the bank.
Don’t forget to check out thrift stores and Facebook Marketplace for gently used furniture and household items. With a little creativity and resourcefulness, you can furnish your new home on a budget.
7. Internet and Phone Bills
The average cost of internet and phone plans varies depending on the provider and the plan you choose. However, you can expect to pay around $50 to $100 per month for internet and $40 to $80 per month for a mobile phone plan. In addition, there may be additional fees, such as equipment costs or activation fees, which can add up quickly.
To minimize these expenses, consider bundling services with one provider. Many companies offer discounts for bundling internet, phone, and cable services.
8. Credit Card Payments
If you thinking about moving out and are currently swaddled in debt, then you probably don’t have enough money to move out. If you have high-interest credit card debt, prioritize paying it off before moving out.
Automating savings on essential bills using Truebill can also help you manage your credit card payments while covering the costs of moving out.
Additionally, ensure that you have an emergency fund and enough money to stay a year to handle unexpected expenses.
Things may get harder if you have to pay for college without help from parents.
How to calculate your moving out budget
Moving out on your own requires careful planning and budgeting.
- To calculate your moving-out budget, start by determining your monthly expenses once you move out. Make sure to include the factors discussed above.
- Then, decide on your target move out date.
- Now, figure out how many months you have to save.
For example, if your target move out date is in 6 months and you need to save $5,000 to cover your expenses, you’ll need to save about $833 per month.
Additionally, create an emergency fund to cover unexpected expenses such as medical bills or car repairs. Aim to save at least 3-6 months’ worth of expenses in your emergency fund.
By creating a detailed monthly budget and sticking to it, you can ensure that you can afford to live on your own and achieve your goal of moving out.
Tips and tricks on how to move out
So, you’re finally ready to move out and start your life as an independent adult.
But before you can start your new life, there are a few things you need to take care of first – like, you know, finding a place to live and figuring out how to pay for it.
Learn the lessons from those who did not move out with enough cash – like me.
Tip #1: Create a Budget and Stay Within Limits
Moving out with only $5000 can be challenging, but creating a budget and sticking to it can make the process much easier.
To start, subtract your monthly bills from your monthly income to determine your basic budget.
- For instance, if you make $2500 per month and pay $1500 for rent and bills, you have $1000 left for living expenses.
- Allocate $400 for groceries and other necessities, $200 for transportation, and $100 for utilities.
- This leaves you with $300 for entertainment and other non-essential expenses.
To stay within your budget, consider using a budget binder to track your income and expenses.
Be mindful of living within your means and avoid overspending by resisting the temptation to spend your first paycheck on new household items or entertainment. Instead, opt for more affordable options such as walking around your new neighborhood or having a picnic in the park.
Tip #2: Reduce Expenses Where Possible
One of the hottest topics is becoming frugal green. To save money and the environment at the same time.
When it comes to furniture, try buying used or refurbished items or borrowing from friends and family. Additionally, cutting back on unnecessary expenses such as dining out and entertainment can free up more money.
By being resourceful and creative, it is possible to move out on a budget without sacrificing quality or comfort.
Remember to allocate 50% of your monthly pay towards necessary expenses, 30% towards things you want, and 20% for debt repayment and long-term savings.
Tip #3: Look for Low-Cost Rentals
Finding low-cost rentals can be a challenge, but there are several options available to those who are willing to be flexible and creative.
- Renting a basement suite or studio apartment can be a more affordable option.
- Consider couch surfing, subletting, or home-sharing arrangements.
- Home-sharing can be particularly attractive as it allows you to pair up with an elderly homeowner who needs a little extra help in exchange for low rent.
- Find a tiny home rental.
- If you don’t mind sharing the space, you can also consider getting a roommate or looking into pod shares. Pod shares are co-living spaces where individuals rent a bed in a shared room, with access to other community spaces like a bathroom and kitchen.
- Become a housesitter and be paid to move out. Learn more with Trusted Housesitters.
With a little bit of research and creativity, it is possible to find low-cost rentals that fit your budget and lifestyle. Remember to determine exactly how much you can spend on rent and be open to alternative housing solutions to help keep your costs at a minimum.
Tip #4: Look Into Getting Renters Insurance
When renting you are more than likely going to live closer to others, which means more things can go wrong. Don’t skip out on renter’s insurance, as it can provide the peace of mind and protection you need as a first-time renter.
Without renter’s insurance, unexpected disasters such as fires, storms, or theft can leave you with thousands of dollars in damages that you would have to pay out of pocket.
Renter’s insurance typically costs around $20 per month and can save you a lot of money in the long run. Some affordable options for renter’s insurance include Lemonade, State Farm, and Allstate.
It’s important to shop around and compare policies to find the best one for your needs and budget.
Tip #5: Plan for Emergencies and Unexpected Expenses
It is crucial to plan for emergencies and unexpected expenses.
Start by setting aside a minimum of $1000 for an emergency fund.
Ideally, you should aim to save at least three to six months of living expenses in a rainy day fund. Remember, having a contingency plan and emergency fund can provide peace of mind and protect you from financial hardship.
Tip #6: Start Saving for a Security Deposit
Remember to prioritize saving for a security deposit by setting a specific savings goal and putting aside a portion of your income each month before you move out!
With dedication and discipline, you can reach your goal and move out with confidence.
More than likely, if you are a good tenant, you should get your full security deposit back after your lease is over.
Tip #7: Start a Side Hustle
Starting a side hustle can be a great way to earn extra money while still maintaining your full-time job. You can earn extra income through various side hustles depending on your skills and interests.
The most common side hustles are online jobs, such as transcription, virtual assistance, proofreading, blogging, freelance writing, data entry, graphic design, and web design. These jobs are flexible and eliminate the need for driving anywhere, requiring only a laptop or computer and a good internet connection.
In fact, learning how to make money online for beginners is a trending topic.
As you start your side hustle, put in as much time as you have available to maximize your earnings. Remember that a side hustle is unlikely to replace the need for a real job, but it can provide a great way to earn extra money and pursue your passions.
Tip #8: Plan Ahead and Create a Timeline
When planning to move out on a budget, it’s important to create a realistic timeline.
Start by mapping out all the expenses you’ll need to cover, such as rent, utilities, food, and transportation. Along with how much money you have already saved for unknown expenses.
Stay organized by keeping a checklist of everything you need to do and when it needs to be done. Don’t rush the process – take your time and make sure you have everything in order before making the big move.
Remember the millionaire quote, failing to plan is planning to fail, so take the time to plan ahead and create a realistic timeline.
Is 10000 a good amount to move out with?
According to various sources, $10,000 is generally considered enough to cover moving out expenses and leave room for emergencies.
However, the actual cost of moving out can vary depending on location, rent prices, and cost of living.
Learn how to save 10000 in a year!
FAQ
So, is 5000 enough to move out?
It really depends on your situation.
- If you’re moving to a cheaper area and don’t have many expenses, you might be able to make it work.
- However, if you’re moving to a more expensive city or have a lot of bills, you might need to save up more money.
When determining how much money is needed to move out, there are several factors to consider, which we covered above. These include where you plan to live, your living expenses, initial moving costs, ongoing costs, and emergency funds.
It’s essential to have a budget and do the math to determine the minimum amount required for a smooth transition to independent living on a tight budget.
Ultimately, it’s important to do your research and figure out what’s best for you.
Source: moneybliss.org
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St. Louis is known as the “Gateway to the West” to tourists, but locals are more than happy to simply call it the “Lou.” No matter what you like to call this Midwestern hub, one thing’s for certain: There are a lot of excellent St. Louis neighborhoods to call home.
St. Louis really does have it all: great architecture, a sense of community pride (especially when it comes to great beer making), a thriving sports scene, and lot of friendly locals ready to welcome in new residents. The best part? There are 79 distinct and wonderful St. Louis neighborhoods located in the city proper.
Like any big city, neighborhoods in St. Louis are diverse, eclectic, and have their own distinct history and personality. Here are a few of the most popular St. Louis neighborhoods to start apartment hunting in if you’re a new resident:
Central West End
Bordered by St. Louis University and Forest Park, the Central West End is a beautiful neighborhood known for its diverse crowd. Here you’ll find a mix of young singles as well as families. There are many great bars, shops, galleries, and fun sidewalk cafes that line the area.
However, perhaps the most famous building in the Central West End is the Roman Catholic Cathedral Basilica, which boasts one of the largest mosaic art structures on earth. Another major landmark in this neighborhood is the Chase Park Plaza Hotel, one of the city’s most historic hotels.
Due to the neighborhood’s age, there are lots of apartment styles to choose from, from townhomes to high-rises, all with some of St. Louis’s finest architectural highlights. The area hosts a lot of the city festivals too, so be prepared to be out and about– especially during the warm-weather months.
Maplewood
Known as a young, up-and-coming neighborhood, Maplewood could be the perfect area for a resident looking to plant roots and save some green during their first few years in St. Louis. Many locals think Maplewood is the city’s hipster area, and they might not be too far off in their assumptions. For instance, offbeat shops are everywhere in Maplewood, as are laid-back coffeehouses buzzing with creatives and college students.
One of St. Louis’s relics also calls Maplewood home: Saratoga Lanes. This vintage bowling alley is the oldest west of the Mississippi River, according to Explore St. Louis. Beer lovers will also be more than happy to be living in Maplewood, as Schlafly Bottleworks (St. Louis’s most respected craft brewery) offers tours there.
Clayton
Clayton is the famous home of the St. Louis Art Fair, one of the most celebrated events in the city, where 150,000 people flock annually. However, the community events don’t stop there in Clayton. There is also the Gallery Nights receptions and Parties in the Park cocktails (perfect for a roomie weekend outing).
It’s a busy and fast-paced place to call home, but Clayton always presents renters with something to do, whether you’re headed to one of the best bars and restaurants in St. Louis or finding your cultural bearings at one of Clayton’s many art galleries. Clayton is also the home of the St. Louis city government and the Center of Clayton, which is a 136,000-square-foot sports and recreational complex.
Cherokee Street
This is the one neighborhood that everyone in St. Louis is buzzing about. Cherokee Street is full of beautiful vintage and antique shops, artsy and progressive locals, and plenty of Mexican restaurants. If you love all things retro and tacos– this is definitely the place for you.
However, the appeal of Cherokee Street goes well beyond great food and shopping. A lot of renters are flocking here due to the welcoming atmosphere for young startups and business owners.
Many of the businesses here are locally owned and source from excellent vendors. Most have a certain beatnik vibe, making Cherokee Street the perfect place for first-time apartment dwellers or young renters.
If you’re renting with multiple roommates or love to decorate with an industrial, business vibe, then this is the place for you.
Be sure to do some exploring while in St. Louis during your apartment hunt. With literally dozens of neighborhoods, there’s bound to be one with your name on it.
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[UPDATED, 2021]
Pay Private Mortgage Insurance (PMI) or play the wait-and-save game? That’s the dilemma for a majority of would-be homebuyers. It’s rarely an easy (or fun) choice.
The Dilemma
Coming up with a 20% down payment can take years. With home prices increasing 5-10% annually, the home of your dreams is sure to cost quite a bit more in 2026. Rather than save, some homebuyers opt to pay PMI instead. Most future homeowners don’t know what PMI is and how much it may cost them.
What’s the Purpose of PMI?
Usually you purchase insurance to protect yourself. PMI works differently: basically you pay to protect the mortgage lender in the event you can’t pay the mortgage. It’s basically a mortgage lender’s insurance to protect themselves if a borrower stops making payments.
In general, mortgage lenders consider buyers who put at least 20% down to have enough skin in the game that they’re low risk. That makes everyone that puts down less than 20% a riskier investment, so they require them to pay PMI.
The Upside of PMI
The good news about PMI is that it’s not too expensive and you don’t pay it forever. Your lender typically requires you to pay PMI until you get to a Loan-to-Value (LTV) ratio of 80% loan to 20% equity. Once you do, you can request your PMI be cancelled, unless you’ve taken out a FHA loan (PMI never falls off when you choose this loan type). PMI also doesn’t cost too much, although the amount you pay can vary. Below are a few ways to lower your payment.
Commonly Asked PMI Questions
How much will I pay in PMI?
Homebuyers required to pay PMI typically pay around 0.5% annually of the total amount borrowed, with the cost split across all 12 months. Here’s some examples:
- $180,000 loan ($200,000 with 10% down), PMI $75/mo
- $285,000 loan ($300,000 loan with 5% down), PMI $125/mo
When will I be done paying PMI?
This depends on what type of loan you take out. Here’s a quick guide:
- FHA: If you take out an FHA loan, mortgage insurance continues for the life of the loan. Ouch. You’d have to refinance your loan to get rid of it.
- Conventional: On a conventional loan you only pay PMI until your equity reaches 20%.
How can I avoid paying PMI entirely?
Your house is probably your biggest expense, and the thought of spending extra money each month is as appealing as week-old sushi. Do you have to pay PMI? No, not if you do any of the following:
- Put 20% down. Call the parents, check in with Grandma, collect every debt from your former roommates. When you put 20% down, you don’t pay PMI at all.
- Opt for an 80-20 piggyback loan. 80-20 mortgage is paid through two loans, a first and a second mortgage. The 80 first mortgage covers the home loan; the 20 second mortgage is the down payment. The second loan in a piggyback loan usually has a higher interest rate.
- Look for owner financing. In some situations, owner financing works like rent-to-own, in which case you probably won’t be required to pay 20% down or PMI.
- Shop for homes at a lower price point. Consider the difference in down payment for a $250,000 home versus a $300,000 home: (we’ll save you the math: it’s $10,000). Lower price homes may fit your savings account better—and you can trade up or add on later.
- Check out Homie Loans™. Homie Loans™ can look at your personal financial situation and tell how you can lower your PMI. Homie Loans™ may be able to help you with a new loan.
To Pay or Not to Pay? The Decision is Yours
No one wants to pay extra each month for their home, but if paying PMI means you can buy a $300,000 home now vs. waiting five years while you save, paying a few thousand in PMI over that same period can make a lot of financial sense. Plus, the $300,000 home you purchase now starts building equity ASAP and will likely increase in value each year you live there.
We’re Here to Help
There’s a lot to consider when choosing to pay PMI vs. wait and save for a 20% down payment, but we hope we’ve given some helpful tips to guide you in the right direction. If you have any additional questions, or would like to begin the home buying process, click here to learn more about how to get started. We’d be happy to help you start your search for your dream home!
Source: homie.com
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Keeping a dog in an apartment is much easier with a dog park right next door.
As much as we love our pets, it can be hard to be a dog owner living in an apartment. There isn’t as much space and you likely don’t have a private backyard where they can run and go to the bathroom.
Plus, some breeds simply aren’t suited for apartment living. That means that most apartment-dwelling dog owners need to use neighborhood or community dog parks. But this isn’t always the most convenient option. Maybe the nearest dog park isn’t within walking distance, meaning you need to drive there. Maybe your dog is still learning social skills and you still aren’t comfortable taking them to a large dog park.
The solution could be found in choosing an apartment complex that has its own dog park on the property. Exclusively available for the use of four-legged residents and their human companions, apartment dog parks have many benefits for apartment dog owners from their proximity to your home to reduced attendance. Plus, dog parks are amenities commonly found at higher-end luxury apartment buildings, meaning that there are likely tons of other desirable perks and amenities for you to enjoy.
13 reasons to look at apartments with dog parks
Every dog has its day, or at least it will once it lives in an apartment with its own dog park. Here are 13 benefits to dog owners and their canine roommates of choosing apartments with dog parks.
1. Your dog can get more frequent exercise
If you have a dog park in your apartment complex, you don’t have to drive or walk long distances to reach a nearby park. It’s easier to fit in multiple visits per day, giving your dog more opportunities to stretch their legs, run around and get some fresh air and exercise. Your dog will be happier and healthier for it.
2. Get in your daily steps
It’s not just your dog who can get in some exercise during dog park visits. It also gives you a chance to get in more daily steps while walking to, from and around the dog park. If your dog likes to run around, you can even get in some light jogs and cardio during dog park playtime. Having an on-site dog park gives you a chance to fit some easy exercise and stretching into your day as well.
3. It’s easier and more convenient
In general, having a dog park close at hand is more convenient for everyone. If you work from home, it’s easier to fit dog park visits into your schedule when it only takes a few minutes to get there. Instead of needing to plan outings around your work schedule, you can quickly run your dog down to the park to use the bathroom and exercise before a meeting starts. If it’s late at night and your dog needs to go out before bed, you don’t need to get dressed again and walk around the neighborhood. Early mornings are also better when the dog park is a few minutes away.
It’s also easier for pet sitters. If you don’t work from home and someone needs to let your dog out during the day, they don’t even need to take the dog off-site.
4. Meet and connect with other dog owners in your apartment complex
Apartment dog parks are also great places to socialize and meet your other neighbors who are dog owners. If you’re new to the complex and want to introduce yourself, saying “hi” and chatting at the dog park is a casual, easy way to get to know other dog owners in the complex. You can also meet and welcome new residents to the complex.
Not only can you make new friends this way, but knowing who among your neighbors are dog lovers can come in handy. If you’re going on a trip and need someone to watch your dog, you can simply ask trusted neighbors instead of needing to find someone new. If you’re away for work during the day, you can also ask work-from-home neighbors if they’re willing to help out with getting your dog their daily bathroom runs.
5. Your dog can make friends as well
It’s not just you who can make new friends and acquaintances while hanging out at your apartment dog park. Your dog can also make friends and become playmates with other resident pooches.
Larger neighborhood and community dog parks usually attract a bigger crowd, but a small apartment dog park that only caters to a particular complex will have a smaller pool of dog visitors. That way, your dog is more likely to bond with other dogs that they see more frequently and become friends.
6. Extra safety and security
Apartment dog parks are also generally safer for both dogs and their owners. At larger neighborhood dog parks where everyone is welcome, there may be run-ins with aggressive or untrained dogs. At a smaller apartment dog park, you’re more likely to know all the dogs there and whether or not they’re well-behaved or can become aggressive.
Having a dog park just steps from your apartment is also safer for humans too. For early morning or late nights, you don’t need to walk around a dark neighborhood or an empty dog park where there’s no one else around in case something happens. If your dog park is on your apartment complex’s grounds, it’s in a secure, safe area that likely also has better lighting.
7. Keeps messes to a minimum
The whole reason to take your dogs to a dog park is so they can have a good time, but sometimes they get messy in the process. Maybe they roll around in the mud or get covered in dust. If you need to drive to your nearest dog park, that return trip will get dirt, mud and other messes around your vehicle.
While your dog can still get dirty at an apartment dog park, at least your nice, clean car doesn’t have to pay the price. Plus, your apartment is right there for a fast clean-up.
8. Let your dog run free
Apartment dog parks may be one of the few places where you can let your dog off-leash for some untethered fun and exercise. Not all dog parks allow this because of the risk of violent or aggressive encounters. But in quiet apartment dog parks, you can usually give your dog free rein to run around and have fun.
Plus, you can quickly leash them back up if someone else comes to use the dog park that isn’t comfortable with off-leash dogs. Since you’re more likely to know all the other residents who use the dog park, that also means you can preemptively avoid encounters with aggressive or reactive dogs.
9. The apartment may have other pet amenities like dog washes
If your apartment complex has pet-friendly amenities like a dog park, they definitely cater to and understand the needs of pet owners. That means there’s a good chance they have other pet-friendly amenities like dog washing stations or dog spas like these dog-friendly apartments in Los Angeles.
No more getting your bathroom all dirty giving your dog a bath or hauling them to the pet groomers. You can take care of it yourself at your apartment’s on-site dog-washing spa.
10. Some dog parks may come with agility equipment
Offering chances for more enrichment play or learning new tricks, some apartment dog parks also come with agility equipment. These can help your dog keep their health and agility up, train for competitions or just have a good time.
11. Your dog will be less restless
Taking your dog out more frequently during the day means they’ll be less restless back at the apartment. Instead of hassling you to play or give them attention, they’ll relax or take a nap.
If you work from home or have lots of chores, it’s easier to work through your to-do list without a dog in the way. You’ll be more productive or can simply unwind and relax as well.
12. Better behavior both in and out of the apartment
Not only will having closer access to a dog park make your dog less restless, but they’ll be less disruptive. Dogs who are stuck indoors all day can bark, be noisy or make messes around the apartment.
This isn’t just disruptive to you, but can also impact your neighbors. A barking dog can lead to noise complaints and issues with your neighbors and building management. Making sure your dog gets plenty of fresh air and exercise at a dog park that’s close and accessible can help avoid these issues.
13. Living in a pet-friendly community
Living in an apartment complex that has its own dog park means that the overall community is pet-friendly, and there are many benefits of living in a pet-friendly apartment building. Firstly, it can be hard to find pet-friendly apartments sometimes. Even if you do live in an apartment that allows dogs, your neighbors might not, which can create conflict.
In an apartment complex that caters to pet owners with amenities like dog parks, odds are that many of the residents love and have their own furry best friends. You’re living in a community of understanding, like-minded people who share a common interest and passion, which makes for a more comfortable, happy living situation.
Find the perfect apartment for you and your furry best friend
From its convenience to helping you and your pooch make new friends, living in an apartment with a dog park offers numerous benefits for both you and your dog.
To find apartments with dog parks in a dog-friendly city, use the Pet Policy tools on Rent.com to look for apartment complexes that allow dogs. This will filter results to only dog-friendly apartments, which you can then browse to find complexes that come with pet amenities like dog parks.
Source: rent.com
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Having a roommate can be great; you have companionship and someone to split the bills with. But that sharing of expenses can sometimes get challenging and tense even. Roomies can wind up arguing over who is using up all the toilet paper or sending the electricity bill through the roof.
To help keep the peace and control costs, there are smart tactics you can use. Try some or all of these tips to keep your household as fun and argument-free as ever.
One of the easiest ways to ensure everyone feels satisfied with how the household bills are handled is to be direct and upfront with financial expectations. And this means being straightforward about what those expectations are before anyone moves in.
When negotiating moving into a new home, consider asking how bills are handled now and how it will change when you or someone else moves in. Additional questions to wrangle can include:
These can be helpful, because everyone can understand what’s expected. It also sets ground rules moving forward.
As for the best way to split bills, that may depend on the household situation. For example, if the home has two evenly-sized rooms and a shared bathroom, kitchen, and living area, it may be easiest to simply split the bills down the middle as everyone has an equal space. But, if one room is exponentially larger than the other and has its own en suite bath, the bills could be split proportionally to reflect the extra space for one roommate versus the other.
It is a good idea to tackle the grocery issue head on. For instance, address such questions as:
• Is the house going to split groceries?
• Is everyone going to enjoy one shared meal together at night?
• Are the roommates going to split common goods like cleaner and toilet paper?
• Or is each person going to fend for themselves?
Any way you choose to go about it is fine, as long as it’s all out in the open — before someone accidentally finishes someone else’s ice cream without asking.
Picking Who Is Responsible for Which Bill
Once it’s decided how a bill will be divided, one other idea may be assigning each roommate ownership of bills for things like the electricity, heating, gas, water, trash, cable and internet, and more, depending on the rental agreement. Perhaps you’re able to get a better deal based on a roommate’s existing account with a certain biller. That may be one way to decide and to lower expenses.
Or, another common method is to have the roommates divide up the bills evenly in order to distribute the responsibility. Doing things this way may also ensure everyone pays bills on time. Being late with bills can lead to fellow roommates being surprised with a service being interrupted and their credit being dinged if they are listed on the account that’s unpaid.
You might also look into changing the due date on bills; this can sometimes be accomplished and can ease cash flow.
Creating a Roommate Bills Contract
Once the lease has been negotiated, the bills have all been cleared up, and everyone is in agreement, you may be considering some sort of “roommate contract” spelling out exactly what was decided upon, which everyone reads and signs.
That way, no one can ever claim they were confused about the household budget and how bills are split, when money is owed, and who is responsible for what. It is recommended to share the fully executed contract electronically and then a printed out copy for all to review and retain.
Recommended: How to Rent an Apartment With No Credit
Sharing a Spreadsheet of Expenses
Settling into a new home and arrangement might be a good time to finish up the admin work by creating and sharing a monthly spreadsheet of expenses.
This spreadsheet could be kept in a common gathering area for easy reference and shared online as well. In the spreadsheet, each roommate can keep track of the expenses they are responsible for, as well as who has paid and what is outstanding.
This spreadsheet may also come in handy for adding in shared groceries and necessities like milk, eggs, toilet paper, and paper towels. That way, everyone can keep track of who bought the last batch to avoid an argument later. You’ll also see how much your household is spending on groceries per month and other expenses.
Recommended: Different Types of Budgeting Techniques
Sitting Down Together at the End of Each Month
It is said that one of the quickest ways to ruin a roommate relationship is for one person to get passive-aggressive about the bills. That’s why it’s recommended to avoid leaving little notes around the house about who owes what (or who hasn’t done the dishes in far too long) and instead face those issues head on.
At a good time for everyone, perhaps toward the end of each month, schedule a 10-minute roommate check-in. In this meeting, everyone can share household happenings, announcements, and any updates on household bills.
By sitting down in person, no one can avoid possible uncomfortable questions about money. You all can figure out potential sticky situations together.
As a bonus, roommates can also use this time to go over any other to-dos around the house. You might also discuss ways to economize, such as saving money on water bills.
Keeping Some Personal Purchases Separate
Though some may be tempted to fully invest in a roommate relationship by sharing the financial burden on just about everything, there are some items that are better left in a budget’s personal spending category.
That includes the purchase of any big-ticket items you’d like to take with you if you ever move out. These might include such items as a TV, couch, tables, glasses, or an expensive Crockpot purchased on a whim.
It may also be helpful to distinguish an area in cabinets and the fridge for each individual roommate to place specialty or expensive food items they do not want to share.
If one roommate has a pet they adopted on their own, it is a good idea to keep those bills completely separate.
Recommended: How to Save Money on Pets
Another common recommendation is for everyone to invest in their own renters insurance. This will protect all their items in case of a fire, flood, burglary, or more. This type of insurance could save everyone a lot of money and heartache if disaster strikes.
Using Modern Technology to Split Bills with Roommates
Fortunately, splitting bills with roommates is easier than ever, thanks to the advent of P2P transfers. You might all pay bills via PayPal, Venmo, or Zelle, and then one person transfers the appropriate amount to the payee. Your bank may also have tools you can use to quickly send funds to others.
It can be fast and free to transfer money this way and can make the bill-paying routine quick and simple.
The Takeaway
If you need flexible banking (whether or not you have roommates), consider what SoFi offers. With an online checking and savings account, you can not only access your money at any time from anywhere but also transfer money to pay bills directly online. Plus, you can complete peer-to-peer transfers between SoFi Checking and Savings members and non-members.
More perks: No account fees and a competitive annual percentage yield (APY) to help your money grow faster.
SoFi Checking and Savings: The smart, simple way to manage your money.
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The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
SoFi members with direct deposit can earn up to 4.20% annual percentage yield (APY) interest on Savings account balances (including Vaults) and up to 1.20% APY on Checking account balances. There is no minimum direct deposit amount required to qualify for these rates. Members without direct deposit will earn 1.20% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 4/25/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
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Source: sofi.com
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Finding the best renters insurance policy is what most renters want but aren’t interested in spending a lot of time weighing all the different options.
Worse, a lot of renters don’t know much about it, or think it’s important.
But if you rent the home you live in, whether it’s a house, a condo, or an apartment, renters insurance is no less important than homeowner’s insurance is to a homeowner.
Renters often assume if they experience any losses due to disasters, such as fire and theft, they’ll be covered under the landlord’s insurance. That’s almost never true!
The landlord’s property insurance will cover destruction of the building, but not the contents that are within it. And since virtually all of the contents in a rental property belong to you, the renter, you will be completely out of luck if disaster strikes.
Best Renters Insurance Companies
It would be impossible to say which company offers the lowest premiums on renters insurance. That’s because the quotes you’ll get will be different, based on your personal needs and profile, other insurance policies you might bundle with the renter’s policy, your geographic location, and the type of property you live in.
And while some companies seem to provide additional coverages, it’s hard to know if what they were giving were actual extras, or if they were simply giving more detailed quotes. It’s possible that similar types of coverage are available with all five companies.
What is Renters Insurance?
Renters insurance is a specific type of coverage that insures the possessions that are stored in your rental property. Exactly which possessions are covered depends upon the type of renters insurance you have. Whether you want to protect your prized jewels, new laptop, big screen TV, or a number of other items that are near and dear to your heart, a good renters insurance policy is probably well within your reach.
Renters insurance helps you with replacing stolen or damaged property, but also with protecting yourself from liability on your property and providing you with a backup plan in the event that your home itself is damaged. Let’s take a closer look at those below.
What Renters Insurance Covers
There are three standard provisions that will be found in nearly all renter’s insurance policies:
Personal Property
Similar to a homeowners policy, renters insurance covers the contents of the home you are renting. That includes furniture, electronic equipment, clothing, appliances, and personal effects. You will typically take a policy that will cover anywhere from $10,000 to $100,000 in personal property, though it can be higher.
To determine how much personal property coverage you need, you should take an inventory of everything you have. List the inventory, and then get retail prices on the cost to replace each. It’s tedious, but that’s the only way to really know how much coverage you’ll need.
It’s usually best to take photos, particularly of high-value items. That will make it easier if you need to make a claim with the insurance company.
Personal Liability
Personal liability coverage will protect you if an accident or injury happens to someone else who’s in your home. This can be someone slipping and falling in the home, being bitten by a family pet, or other types of injuries.
It could include visitors, repair people, or even the landlord if the cause of the injuries is determined to be your fault.
Personal liability coverage will protect you and your assets from lawsuits brought against you by injured parties who are holding you responsible.
Additional living expenses
This is coverage that pays in the event you lose the use of the rental premises. For example, if the property is destroyed or damaged by a fire, the insurance policy will pay for reasonable relocation expenses, such as reimbursement for a hotel stay, meals, and other expenses related to the temporary lodging situation.
Non-standard Renters Insurance Provisions
The following may be offered as part of a standard package with some insurance companies, but are additional provisions with others.
Off-premises coverage
This is coverage for possessions beyond the rental property itself. For example, it could include possessions stored in the common area of the basement of your apartment, that are subject to either damage, destruction, or theft. It can also extend to personal items stolen from your vehicle, if those items would normally be covered under your rental policy. This might be a laptop computer, as long as it’s specifically covered under your renter’s policy.
Some renter’s insurance may also include a provision to cover lost luggage, which might be lost by an airline.
Specific coverage items
You should never assume a renters insurance policy covers every possession you own. Some have specific exclusions, and others will exclude an item if it is not specifically listed.
Common specific coverages include home computers, jewelry and furs, business personal property, and firearms. If you have these items, be sure to check to make sure they’re included in your coverage. If not, you may have to get special coverage for each category individually.
Some policies do specifically include all four of these categories. State Farm is an example (see policy quote below). But never assume they’re automatically covered in your policy.
What Renters Insurance Doesn’t Cover
In the broadest sense, renters insurance doesn’t cover any hazard that is not specifically listed in the policy.
Got that? That’s the general rule, but there are certain specifics you should be aware of.
For example, just as is the case with homeowners insurance policies, renters insurance doesn’t usually cover losses due to floods and earthquakes. Those are considered a special category of hazard, specifically requiring either flood insurance or earthquake insurance.
While a renters policy may cover damages sustained as a result of a burst water pipe, you won’t be covered if your home is destroyed as a result of a river that floods your neighborhood.
If you live in an area that’s subject to natural disasters, you should look into getting a policy specifically for that hazard.
When is Renters Insurance Needed?
When required by a landlord – Large apartment complexes typically require you have renters insurance, but so do a lot of individual landlords. It’s likely they have this requirement to protect themselves from tenants filing suits to get compensation for possessions lost due to fire or some other hazard. The requirement is written into the lease.
When you want your possessions protected – Even if your landlord doesn’t require you to have renters insurance, you should have at least a small policy to protect your possessions. Though your stuff may not seem to be worth much, it could easily cost several thousand dollars to replace it, should most or all of it be destroyed or stolen.
College students – Whether you live in a dorm or off-campus, renters insurance is worth having. You probably have at least a laptop, clothing, and some entertainment equipment that would need to be replaced upon loss. You can usually get an inexpensive rider added to your parent’s policy to cover your dorm room.
Retirees who rent – Like college students, retirees may assume that what they have isn’t of much value, particularly if much of it is more than a few years old. But once again, the cost to replace your possessions could be many thousands of dollars. Renters insurance would provide you with the cash for the replacements.
Anyone who rents their home – You might assume if your rental is short-term you don’t need renters insurance. Or, if you’re renting a house, you may assume you’re covered under your landlord’s homeowner’s policy. Both assumptions are wrong.
Renters insurance is necessary anytime you’re in a rental situation.
How Much Renters Insurance Do You Need?
As I wrote earlier, you need to do an inventory of your possessions to determine how much coverage you’ll need to replace everything you have that could be lost. You might also have to get additional coverage for gray-area possessions, like business property, computer equipment, or jewelry and furs.
Liability coverage requirements are harder to estimate. $100,000 should probably be a minimum. But you should also adjust for factors such as how frequently you have visitors or people coming and going to and from your home, as well as any maintenance considerations. For example, if you live in an area where snow and ice are common, and you’re responsible for keeping walkways and stairwells clear, you may need more coverage.
As to the additional living expense portion, try to come up with a reasonable estimate of how much it will cost to live in a hotel for maybe 30 days, while repairs are being done to your rental property. If it’s a severe situation, you might need several months. But the cost of that coverage could be high.
Replacement cost versus actual cash value
This might be the most important single factor in choosing a renters insurance policy. It will determine how much you’ll receive on a claim, so you need to know which provision your insurance company is using.
Under a replacement cost provision, the insurance company will pay a sufficient amount to replace the lost items based on retail cost.
Under actual cash value, the insurance company will reimburse you for the depreciated value of the item. Let’s say you paid $1,000 for a flatscreen TV five years ago, and it’s destroyed in a fire. The insurance company may decide the value of the TV is just $200, based on its age. That’s the amount you will be reimbursed for.
Now actual cash value policies are less expensive than replacement cost policies. But as you can imagine, they’ll also pay you a lot less if you file a claim.
Unless you’re in the habit of buying your possessions at flea markets and garage sales at deep discounts, you’ll be much better off with a replacement cost policy. It may cost more for the premium, but it will do its job better when disaster hits.
How Much Does Renters Insurance Cost?
According to the Minnesota Department of Commerce renters insurance averages between $15 and $30 per month.
How much renters insurance costs depend on the usual factors that affect all insurance policies. These can include the amount of coverage you want, the deductible you’re willing to accept, your history of claims, and even how you plan to use the property.
But where renters insurance is concerned there are more specific considerations. For example, the number and type of pets you have can be a factor. Certain breeds known to be more aggressive will result in a higher premium. So will a wood-burning fireplace. The number of occupants might also figure in. Presumably, the higher the number, the more likely a claim will be paid out.
A higher premium might also be charged if you’re running a business out of the residence. In fact, certain types of businesses might require you get a commercial policy, rather than a standard rental policy.
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One of the biggest single factors is property location.
Urban locations typically cost more than rural ones, due to the closer proximity of buildings and the likelihood of fire. If the property is located in a high-crime area, it can also increase the premium. So can a location in an area that’s more prone to natural disasters, such as tornadoes and hurricanes.
The type of construction of the building is also important. For example, a building made of brick, rather than wood, would have a lower premium. The age of the building might also be a factor, since newer buildings generally have better fire protection features, like smoke alarms and sprinkler systems.
Here’s a table put out by the Insurance Information Institute that shows the average cost of both homeowner’s and renter’s insurance from 2006 to 2015. Notice how inexpensive renters insurance is compared with homeowners? It is a common misconception that insurance is too expensive for renters.
In fact, it is affordable and well worth the cost for the peace of mind and protection you receive. In 2019 and beyond, you can expect the same kind of minimal changes and affordability to remain intact, as the table below suggests.
How to Lower the Cost of Renter’s Insurance
Whatever the situation with your renter’s insurance premium, there are ways that you can keep the cost down.
Don’t buy more coverage than you need – Take an inventory of the contents of your home, and make a reasonable estimate of the replacement value of what you have. If it’s only realistically worth $25,000, then you don’t need a $50,000 policy.
Security and protective systems – Residences that have smoke alarms, fire extinguishers, indoor sprinkler systems, deadbolt locks, and security systems will usually have lower premiums.
Bundle renters insurance with other coverages – If you have auto, life, or health insurance, consider bundling your renter’s insurance with one of these policies. It can result in small savings on the premium.
Claim-free history – Like all other types of insurance, your claim history will be a major factor in determining the premium. When it comes to renters insurance, companies normally look back at least five years. If you had no claims filed in that time, you’ll get the best premium rate.
Policy exclusions and limitations – You can specifically exclude any types of property that you don’t actually own. For example, if you don’t have much in the way of high-cost jewelry, you won’t need coverage for jewelry and furs. Also, you can save a good bit of money by increasing your deductible from $500 to $1,000, or even higher you have the liquid savings to cover the difference.
What to Watch Out for With Renters Insurance
There are a few situations that might cause your premium to be higher, or even cause the insurance company to deny your application.
High-risk renters
This could be the result of the location of the rental property or even certain risks associated with you as a tenant.
Location can be a factor if you’re living in a high crime area, or in an area that has seen an above-average number of fires and other hazards. A location may be considered high risk if it’s located too far away from fire hydrants or fire stations. Your premiums will be higher if you’re located in such a neighborhood, or you may find that an insurance company is unwilling to extend coverage at all.
You could be considered a high-risk renter if you made one or more claims against your policy within the past five years (this is a standard question on renters insurance applications, so be ready). Some insurance companies may not offer a policy at all if you have one.
Still another possibility that would make you a high-risk renter is if you run a business out of your home. While a work-from-home situation won’t usually be a problem, having the type of business where you have people coming and going from the residence could be an obstacle.
One prominent example is if you’re running a childcare business out of your home. A situation like that would probably require a business insurance policy, in addition to renters insurance.
Sub-letting the residence
This is where you are the primary tenant in the property, but you might then rent the property out to another party on a temporary basis. While renter’s policies do provide for roommates and other regular occupants, they generally frown on transient arrangements. This will pretty much preclude using a rental premise for AirBnB customers!
Dangerous or exotic pets
Since certain types of pets are statistically more likely to cause injury to people, the insurance company may either charge you a higher premium for these pets, or even refuse to issue the policy entirely.
This is a common occurrence with certain dog breeds. For example, most insurance companies will have a problem if you have a pitbull, a German Shepherd, or other dogs deemed to be aggressive.
You might also run into a problem with certain exotic pets. A good example might be an iguana or a 10-foot python. Both are considered to be potentially dangerous, and don’t fall within the definition of ordinary pets. You probably won’t be able to get a renters insurance policy at all if you have this type of pet.
Unusual possessions
The same can be true of jewelry, furs, artwork, or antiques. If you have items that have significant value, either individually or collectively, you may need a separate policy that specializes in that particular type of possession.
Should You Get Renters Insurance?
Unless you’re the kind of person who travels light in life – like really light – you absolutely need renters insurance. That means anything more than the clothes on your back, and an overnight bag with toiletries. It can be furniture, computer equipment, photography equipment, family heirlooms, appliances – you name it. If it’s worth anything at all to you, to the point that you would need to replace it if were lost, then you need renters insurance.
Never assume your personal possessions will be covered under your landlord’s homeowners insurance, or under any other policies you may have. Renters insurance is a very specific type of coverage, and there’s no substitute for having your own policy.
Source: goodfinancialcents.com