Apartment buildings and detached single-family home rental properties are the first things to come to mind when looking for a new space. But what about condo living?
In real estate, condos are very similar to standard apartments in that they’re individual units rented out to tenants by the owners of the property or condo owners.
What differentiates a condo vs. other types of rental units is that adjacent condos often have different unit owners. Some condos are actually lived in by the person who owns them.
A condo community comes with shared amenities, similar to an apartment building. It also includes homeowners association restrictions, condo association fees, exterior maintenance and private outdoor space. So what is a condo? Keep reading before reaching out to your real estate agent.
What is a condo?
So, what is a condo? A condo is a real estate property where an owner owns one unit in the building. The condo owners buy a condo in the building with a down payment and pay property taxes, monthly fees, HOA fees and the mortgage lender. All are similar to a single-family residence.
Condos are often popular choices for those who want the benefits of homeownership and community living without the hassle of maintaining a yard or general property upkeep like snow removal. If you don’t need much square footage, a condominium unit may be the right bet for you
Buying a condo is definitely a part of real estate investing as you get your own private residence with community amenities like swimming pools without large crowds and tennis courts and other common spaces.
Though a unit owner can own multiple condo units, it’s common for owners to own just one condo unit that they will either live in or lease out to apartment renters, depending on the condo association. They may rent the unit through a property management company, or the owner may do it themselves.
Condo owners may even rent their units for years and still choose to move in themselves later down the road into their living space. This is a stark departure from a standard apartment community or housing complex where all rental units share a singular owner.
Condos can be more high-end than standard apartments
Because condos are owned individually, owners may choose to outfit their private space with higher-end fixtures and features than other rental units. This is especially the case if the owner of the condo intends to occupy the unit themselves eventually.
This doesn’t make condos cheaper. Because of the added luxury often found in condos, they’re frequently more expensive than other rentals due to many condo fees. That isn’t the only reason condos may be pricier, however.
Most condos are individual pieces of real estate. Their owners are often subject to HOA fees generally passed along to the renter at the owners’ discretion.
Condo vs. apartment: What’s the difference?
In general, apartment buildings are rental properties owned by a landlord or property management company, while condos are owned by individual condo owners. You often have a lease in each scenario, but some key differences exist.
A condominium complex often has more benefits than apartments, such as access to shared amenities and the ability to upgrade the unit. Condos tend to come with responsibilities such as paying an HOA fee and adhering to rules and regulations set by the condo board. And you, as the renter, must also adhere to these rules that, are often more strict than standard apartment complexes.
Not every condominium association lets owners rent out their units, so confirm that you can before moving in and avoid eviction.
Are condo owners different than landlords?
A condo owner can be a landlord, but a landlord is not always the owner of the rental property. Landlords may own detached single-family homes and rent out the rental property to prospective tenants, or they can be a property management company that only manages. In that case, you are leasing the apartment and setting up your own utilities.
With a condo building, the condo owner covers the HOA fees, property taxes, condo fees and utilities since they are in their name, but these are tacked on into your monthly rent. They are essentially buying a condo and owning real estate.
Condo owners share the exterior costs with other condo owners in the complex by paying the homeowners association a monthly fee and covering maintenance costs.
As a benefit between condo vs. apartment, condo communities allow you to have a more personal relationship with the owner, mainly because they can keep turnover to a minimum. Because of this, there might be more flexibility in negotiating the monthly rent.
What is a condo fee?
Many condo associations consider external areas joint ownership when buying a condo in their complex. Most condo fees go to the condo board for maintenance costs like landscaping, lawn care, cleaning common spaces, funds for unexpected repairs, maintaining fitness centers and insurance.
The condo fees vary depending on various factors, such as the unit’s size, the building’s age, and the amenities the condominium offers. So keep this in mind when looking at your final monthly rent.
Renting at a condo community might be right for you
Renting a condo vs. an apartment might be a perfect fit if you’re looking for a living space with small square footage and trying out condo life in your own unit but want to wait to pay a down payment and closing costs.
If you’re looking to rent a high-end, well-cared-for apartment from a landlord you’ll likely be in direct contact with, a condo is the ideal type of rental for you. Otherwise, consider other types of rentals first, like a single-family home or standard apartment. Condo living is not for everyone.
Ready to find the condo of your dreams? Start your search here.
Muriel Vega is an Atlanta-based journalist who writes about technology and its intersection with arts and culture. She’s worked on content for startups like Mailchimp, Patreon, Punchlist, Skillshare, Rent. and others. Muriel has also contributed to The Washington Post, Eater, DWELL, Outside Magazine, Atlanta Magazine, AIGA Eye on Design, Bitter Southerner and more.
Yes, you can rent an apartment without a credit history.
There are a few major challenges in finding no credit check apartments. Weak credit history can not only make it harder for property managers to take you seriously, but it can also make it more difficult for you in a competitive rental market. While no credit check apartments do exist, it’s best to not limit yourself, even if you know an uphill battle with property managers may ensue.
“Credit history plays a major role in securing many of the things you need for everyday life from lines of credit, utilities and even an apartment,” said Nova Credit.
It’s such a regular part of everyday life that it doesn’t take long to begin establishing it. However, if you’re ready to rent before you’ve got a credit history, there’s a way.
How to rent an apartment with no credit
Property managers prefer you to have a credit history for more than just your credit score.
According to Self, “The two primary factors landlords look at are your past payment history and your current debt load.” This means they want confirmation you pay your bills on time and that you have enough money to afford the rent each month.
While not having a credit history makes it harder to prove you’re a worthwhile tenant to have, it’s not impossible. Know going into the rental process that you aren’t the first person trying to rent an apartment with no credit.
Consider these strategies to help convince a property manager you’re a good tenant, even without the history to prove it.
1. Don’t hide the truth
Property managers are typically not big on surprises, so you don’t want to catch them off guard. If you know, when you fill out a rental application, that your credit history is going to trigger some cautionary flags, get out in front of it.
Have a conversation with the property manager before they pull your credit report letting them know what they’ll find. Explain the circumstances leading up to these blips, or lack of credit history, and avoid any surprises.
2. Enlist a co-signer
The No. 1 best way to land a great apartment without a credit history is to find yourself a really responsible co-signer. This is someone with great credit like a parent, older sibling, a close friend or other family members. Even if you do have some credit, property managers like to see co-signers for young renters because it gives them a safety net. If, for any reason, you can’t pay your rent, your co-signer becomes liable.
Keep in mind that this legal responsibility could seriously hurt your co-signer’s credit if you fail to stay current on your payments. Failure to pay entitles your property manager to file a lawsuit or even try to evict you.
Make sure you’re not taking the support of your co-signer for granted. Have a plan in place should you need to rely on their help so they know you’ll pay them back, and show your appreciation for the favor they’re doing for you, making it possible to rent an apartment with no credit.
3. Find a roommate
Moving in with a roommate can help take the pressure off your credit history much like a co-signer can — as long as they have a good credit history themselves. If your combined income, and one person’s credit history, meet your property manager’s rental requirements, there’s a good chance you’ll get the apartment.
Again, when relying on the credit history of another, it’s important to take the situation seriously. If you don’t hold up your end of the rental agreement, their credit rating could get a major ding, not to mention it will mess with your friendship.
To protect you and your roommate, consider writing a thorough roommate agreement before moving in together.
4. Show financial proof
Having a steady income and solid finances are one way you can demonstrate to a property manager you’re fit to rent that doesn’t involve enlisting another person for help. Even without a history of whether or not you pay your bills on time, with a firm financial foundation, you can assuage any fears.
If you don’t have a credit history, the next best way to show you’re able to afford the rent each month is with proof of income. This is especially important for no-credit-check apartments.
Generally, property managers want your income about three times more than the monthly rent. To prove your income, bring at least three month’s worth of pay stubs. They not only show your regular income but also that you have a steady job.
Add to this documentation your last month’s bank statement and information on any assets you may own. This all counts as money you can use to pay rent. The more you have in savings, the better a property manager will feel about not being able to review credit history.
5. Make an offer they can’t refuse
There are two ways you can appeal to a property manager without having to prove you’re the perfect tenant. By playing to their weaknesses, you can make a big first impression.
Weakness #1: An unrented property is an expensive property. Even when an apartment is vacant, it’s still costing a property manager money. Especially if the unit isn’t in high demand, the longer it sits empty, the more it’s going to cost them in mortgage payments, utilities and property taxes. Offer to move in immediately and stop your property manager from having to cover all these expenses out of pocket.
Weakness #2: Money equals security. If a property manager is hesitant about letting you sign the lease, offer to pay more upfront. Whether it’s a larger security deposit or an extra month’s rent, making this gesture without anyone asking shows you’re serious about the apartment. It also shows you’re responsible and have thought this through.
Using either of these strategies may work best when figuring out how to rent an apartment with no credit. You may make such a great impression that credit history doesn’t even come up.
6. Promote yourself
Often, when applicants have a credit history, they’ll attach a letter explaining any questionable parts. Property managers always appreciate the clarification.
If there’s an understandable or legitimate reason you don’t have a credit history, it can’t hurt to explain it to them either. Especially if the reasons are out of your control, don’t keep them to yourself.
Reiterate what you might have mentioned as you filled out your rental application with a formal write-up. Toss in a few reasons why you’d make a great tenant as well. Promote yourself when you already have their attention.
On the same note, don’t feel uncomfortable asking for others to promote you, as well. Collect a few written references from employers, professors or teachers or even your family. These endorsements are a great way for property managers to get a feel for your dependability.
7. Inquire about a short-term lease
Though it’s pretty standard, a 12-month lease is a major commitment for both the tenant and the property manager. For this reason, trust is a big factor when it comes to tenant selection, and trust is harder to establish without a credit history. As an alternative, try to negotiate for a short-term lease.
If that doesn’t seem of interest to the property manager, ask about going month-to-month. This enables them to end the lease after just one month if they’re not comfortable having you as a tenant. It also demonstrates your confidence in yourself as a renter, agreeing to such a risky arrangement.
Both of these options allow you to prove you’re responsible while taking the stress off the property manager to give you a full-year lease. If all goes well, they can extend the lease, or change the terms, after you’ve proven you can handle it, just make sure you pay your rent on time or early.
8. Search for no credit check apartments
The alternative to worrying about your credit history, and how to prove you’re a good tenant is to bypass the need for a credit check altogether. Independent or private property owners are often more flexible with applicants who don’t have a credit history. These are individuals managing their own properties rather than going through a management company or condominium association.
The best way to find no credit check apartments is to look at specific listings. Is the contact an actual name or a company? You want to get to a person.
You can also look for listings outside the normal apartment finder websites. Those renting by owner might look to social media first to find a tenant rather than listing elsewhere.
When in doubt, word of mouth can make a great way to find a listing. Ask friends and family if they know of anything coming up where the owner might not worry too much about a lack of credit history. You could then use that person as a referral to help get in good.
How to improve your credit score
Even as you search listings and figure out a strategy for how to rent an apartment with no credit, you can actively work toward increasing your credit score. If you don’t already have a credit card, apply for one. Start simple by asking your bank about opening a credit card with a low limit. This is a great way to build credit without risking a lot of debt.
You also want to make sure you only apply for credit cards as needed. This is not a ‘more the merrier’ scenario, since unnecessary credit can do more harm than good.
At the same time, don’t close any credit cards you’ve already opened. Even if you’re not using them anymore, as long as they aren’t costing you anything in annual fees and you still only have a few different cards, keep them open.
If your credit history isn’t great because of a large amount of debt, consider consolidating it with a debt consolidation loan. Even though this is another loan, you use it to pay off all your existing debt. This means the individual payments you make to cover your car, student loans and more are all merged into one payment, which can help.
If your debt centers around high credit card balances, you can consolidate those too with a balance transfer. That way you’re only paying off one card each month rather than a bunch.
Once you’ve secured your apartment, make sure to pay all your bills on time. This includes utility bills, your cell phone bill and even your credit card bills. If you have any loans, paying those on time counts too. Believe it or not, all this helps boost your credit score and establishes a positive credit history.
Taking any or all of these steps can help improve your credit score, making it easier to rent down the road as well as make major purchases in the future.
Keep the future in mind with no credit check apartments
For those embarking on an apartment search for the first time, or if you simply don’t have the best credit history, the process can feel stressful. Even though it’s possible to figure out how to rent an apartment with no credit, be ready to put in some work. Make sure you have the right documentation available and the right support if necessary.
No credit isn’t the end of the world when it comes to renting, but it’s something to avoid dealing with more than once. For that reason, once you’re in your first apartment, start thinking about how to improve your credit score for the next time around.
Can you negotiate rent? The short answer is yes. After all, you never get anything unless you ask for it.
So, how do you go about negotiating rent? Rental negotiations can be tricky, so it’s always in your best interest to be strategic when talking to landlords. Here are different ways to negotiate rent, gain bargaining power, take action and (hopefully) get a lower rent from your property manager.
1. Understand the rental market
The first step in negotiating rent is to do your research ahead of time. Look around and understand what surrounding apartment rates are. Compare apples to apples. If you’re interested in a new development, then look at other new developments.
Make sure you have a clear understanding of the amenities that are available and how they compare to the unit you’re considering. For example, if one neighboring apartment complex offers covered parking, a gym and a pool, you’ll want to compare that to an apartment complex with similar offerings. After all, those amenities increase the price of rent. Make this info known to your property manager.
Rental rates are not a secret, but they can change from day to day. Get a competing rate in writing if you can, and if it’s lower than the one being offered, have it with you when you go to negotiate. A lower rate in a similar apartment is a great tool for negotiating a lower price on your own apartment.
2. Consider the time of year
For property managers, timing is everything and there are seasonal trends in the moving and rental industry. In other words, think about the broader supply and demand trends during any given season.
If it’s the end of the month, vacancies are high and you’d be willing to leave if you don’t get what you want, that could be a time when a manager is more likely to be amenable to your offer. However, if you don’t have an alternate place to move ahead of time, you may not want to start negotiating rent until something else is lined up.
As a rule of thumb, winter is usually a good moment to broach the topic of cheaper rent, as it’s harder to find tenants during that time of year. Summer is peak rental season, so you’ll need to be a little more persuasive if you’re trying to negotiate rent during the peak moving season.
3. Sell yourself as a good tenant
Looking for another lesson on how to negotiate rent? If you’ve never rented in that particular complex a few letters of recommendation from personal references will go a long way toward convincing a manager you’d be a tenant worth having, even at a lower rate.
Think of it as a resume for your living situation. Get a letter from previous landlords or apartment managers that says you make on-time rent payments and cause them no problems. Get letters that speak to your character from a former boss, neighbor, or someone in a non-profit organization or church. Just like in a job interview, these professional references can help you negotiate rent and sell yourself as a good tenant for your potential new landlord.
If you’re trying to renew your existing lease at a better rate, remind the manager that you’ve always paid your rent on time and anything else that’s positive. Have you kindly alerted them to maintenance concerns? Have you helped in an emergency? Have you assisted during holiday parties? These situations can go a long way and help you lower the cost of rent on your upcoming lease.
4. Exchange value for price
What’s a lower rent price worth to you? Would you consider doing something above and beyond paying rent that offers tangible value to your property manager?
Think of jobs or tasks around the property — maintenance, cleaning, administrative, marketing — that would increase the underlying value of the owner or manager’s investment. Helping with some of these activities could cut down on expenses and thus, justify the price reduction you’re looking for.
Another “how to” negotiate your rent tip is to bargain with amenities and other things of value. Are you willing to give up your parking space to reduce rent each month? Or, can you pay six months of rent upfront or in cash? Would you be willing to sign a longer lease at a lower rate?
Think like a manager. Everything has a value and most everything is fair game to negotiate or trade with. Don’t be afraid to ask what your manager needs. If he or she has flexibility in pricing (and they usually do), then you might be able to help each other.
5. Experiment with the lease terms
Offering a different move-out date, extending your lease term or reworking the end of your lease term to fall during high season (spring or summer) are some of the ways you may be able to play with lease dates and terms that might be attractive to a leasing manager.
Get your negotiation in writing
As with many things in life, you can ask for and negotiate anything — including rent. If you’re a good tenant, can be persuasive and ask for what you want and need, you can negotiate the terms of your lease and rent prices and walk away with a lower rental rate.
After you’ve worked out a reduced rate with your landlord, make sure you get the new deal in writing so you have a paper trail and proof of your newly negotiated rate.
FAQs around rent negotiations
Rent negotiations are tricky and require a wealth of knowledge and understanding.
How can I negotiate rent for a rent-controlled apartment?
Negotiating rent for a rent-controlled apartment is different. In these cases, research local rent control laws and regulations to understand your rights and limitations. While you may not have as much room for negotiation on the base rent, you can explore negotiations on other aspects, like utilities or improvements.
How can I negotiate rent if I have a low credit score or a poor rental history?
If you have a low credit score or a poor rental history, you can still negotiate rent. Tips to overcome this include offering to pay a larger security deposit, providing a co-signer or demonstrating your commitment to improving your credit and rental history. This can help build trust with the landlord and potentially secure a lower rate.
What if my landlord refuses to negotiate the rent?
If your landlord is unwilling to negotiate the rent, consider proposing alternative terms, such as a longer lease or prepayment of rent. If negotiations remain unsuccessful, you may need to decide whether you’re willing to accept the current rent or look for another rental property.
Can you negotiate rent? It’s worth a shot!
Negotiating rent is not only possible but also a valuable skill for renters. By following these steps, you can strategically and effectively negotiate your rent with confidence. Understanding the rental market, considering the timing of your negotiation and presenting yourself as a desirable tenant are essential elements in the process. Remember, communication is key in this process, and being prepared, courteous and persistent can lead to a mutually beneficial agreement with your landlord.
The information contained in this article is for educational purposes only and does not, and is not intended to, constitute legal or financial advice. Readers are encouraged to seek professional legal or financial advice as they may deem it necessary.
Wesley is a Charlotte-based writer with a degree in Mass Communication from the University of South Carolina. Her background includes 6 years in non-profit communication and 4 years in editorial writing. She’s passionate about traveling, volunteering, cooking and drinking her morning iced coffee. When she’s not writing, you can find her relaxing with family or exploring Charlotte with her friends.
The world of real estate is vast and varied, with numerous options catering to renters’ diverse needs. Among the many choices available, private-owner house rentals have carved out a distinct niche, appealing to those seeking a more individualized experience.
These rentals, run by individual homeowners rather than large corporations, possess their own unique set of merits and challenges. We’ll provide an in-depth exploration of the benefits, drawbacks and nuances surrounding houses for rent by a private owner, contrasting them with more traditional rental avenues.
Defining private-owner house rentals
Private-owner house rentals refer to properties that are rented out by individual homeowners rather than by property management companies or real estate corporations. These private-landlord rentals can range from vacation homes to apartments to single-family residences and more.
Pros of privately owned house rentals
If you’re looking for a place to rent, private-owner house rentals emerge as a unique option, often favored for their personalized approach and distinct charm. Unlike properties managed by larger firms, these rentals offer potential benefits that arise from direct interaction with individual homeowners and the idiosyncratic character of their properties. Let’s delve into some of the prominent advantages of choosing private owner house rentals over those run by large companies.
Personal touch: Private homeowners might offer a more personal touch compared to larger property management firms. This could mean more flexibility in terms of lease agreements, move-in/move-out dates or any other limitations and stipulations.
Direct communication: Renters often communicate directly with the property owner, often leading to quicker response times for maintenance requests or other concerns.
Unique properties: These rentals might have distinctive and unique properties that aren’t typically found in larger apartment complexes or managed communities. Think crown molding, brick walls, hardwood floors and more.
Potential for lower costs: Without the overhead of a property management company, private owners might offer better rental prices.
Flexible terms: Some private owners might be open to short-term leases, month-to-month arrangements or other non-traditional rental agreements.
Cons of privately owned rental properties
Now that we’ve covered some of the most appealing aspects of private-owner rentals, let’s dive into some of the downsides and pitfalls that can potentially affect your experience with a private-owner house rental.
Inconsistency: The experience can vary widely from one private owner to another. While some might be highly professional and organized, others may be less so.
Limited amenities: Private rentals might not offer the same amenities that larger complexes or communities do, such as swimming pools, fitness centers or security services.
Maintenance delays: Some private owners might not have the resources or connections to address maintenance issues as promptly as larger management firms.
Lack of formal process: There may be a lack of formal processes in areas like application screening, security deposits and lease agreements, which could lead to potential legal disputes.
Potential for bias: Without the procedures and policies of a larger company, there might be more room for unconscious bias or discrimination in the rental process.
Private-owner house rentals present a compelling blend of advantages and challenges. While their personal touch can provide renters with a tailored experience, the potential inconsistencies and lack of standardized processes can pose challenges.
As with any rental decision, potential tenants should carefully consider the pros and cons before making any decisions, ensuring that their choice aligns with their preferences, needs and expectations for a harmonious living arrangement.
Other considerations when looking at houses for rent
Like most of life’s major decisions, there’s more to consider about private-owner house rentals than just the pros and cons.
Research is key: Due diligence is essential when considering a private owner house rental. Potential renters should research the property, check references and understand the lease terms thoroughly.
Legal protections: Both renters and landlords should be aware of local rental laws and regulations to ensure that they’re both protected. This might include understanding rights related to security deposits, eviction processes and property maintenance.
Contracts: even if renting from a private owner, having a written lease or rental agreement is crucial. This document should clearly outline the terms of the rental, including rent amount, duration of the lease, maintenance responsibilities and any other relevant details.
While there are many advantages to this type of arrangement, potential challenges can arise. As always, thorough research and understanding of the rental agreement are essential for a successful rental experience.
Nuances in legalities between a house and an apartment
Understanding the differences between renting a house and an apartment from a private owner goes beyond just the physical structure; there are also legal nuances to consider. Both situations will involve lease agreements and rights for tenants and landlords, but there are some distinctions to be aware of:
Zoning and land use
Houses might be situated in areas with zoning restrictions that dictate how the property can be used. For instance, certain residential zones might prohibit running a business from home or may have specific parking regulations. On the other hand, apartments are generally in zones designated for multifamily dwellings, which can come with their own set of rules and regulations.
Maintenance and repairs
For houses, the responsibility for external areas like lawns, gardens and driveways often falls on the tenant unless otherwise stipulated in the lease. With apartments, the responsibility for maintaining common areas typically rests with the property management or homeowners association.
Security deposits
Both houses and apartments usually require security deposits to cover wear and tear. However, with houses, there might be additional deposits or fees for landscaping or potential damage to larger outdoor areas.
Utility responsibilities
In apartments, certain utilities like water, trash collection or electricity might be covered by the landlord or the property management, especially if they are shared resources. In contrast, tenants renting a house usually bear the responsibility for all utilities, including water, electricity and garbage.
Liability
Homeowners might have broader liability concerns. For example, suppose a person gets injured on the property, like slipping on an icy driveway. In that case, the responsibility might fall onto the homeowner or the tenant, depending on the terms of the lease. In apartment complexes, the liability for common areas is usually on the property management or owner.
Subleasing and assignments
Lease agreements for houses might be more flexible compared to apartments, which may have stricter guidelines enforced by property management. This isn’t a strict rule, but a general trend given that a private landlord might negotiate these terms.
Pets and modifications
Apartments often have strict rules regarding pets, alterations or additions to the unit. Houses might have more flexibility, but that’s not a given. Still, a house renter might have more latitude to request permissions for larger modifications or to keep larger pets, possibly dodging some breed restrictions in the process.
Is a private-owner house rental right for you?
While the basic principles of landlord-tenant law apply to both houses and apartments, the specific responsibilities, rights and restrictions can differ based on the nature of the property. Renters and landlords need to be clear on these nuances to ensure a smooth rental experience and avoid potential disputes. Navigating the intricacies of real estate rentals requires a nuanced understanding of each available option. Private-owner house rentals offer an alternative to the conventional rental route, underlined by a personalized touch and distinctive property features.
However, as with all choices, potential renters must balance these benefits against possible drawbacks. By staying informed and conducting thorough research, renters can make educated decisions and find a home that aligns seamlessly with their needs.
A native of the northern suburbs of Chicago, Carson made his way to the South to attend Wofford College where he received his BA in English. After working as a copywriter for a couple of boutique marketing agencies in South Carolina, he made the move to Atlanta and quickly joined the Rent. team as a content marketing coordinator. When he’s off the clock, you can find Carson reading in a park, hunting down a great cup of coffee or hanging out with his dogs.
You’re going to have to do more than just pay rent to get new digs. Get ready to fork over a security deposit before move-in day comes.
When it comes to renting, there are costs that everyone is familiar with. These include application and move-in charges, first and last month’s rent, utilities, parking, storage and so on. In particular, the security deposit is one large expenditure that’s standard for anyone who signs a lease for a rental property.
The term “security deposit” is pretty vague, though, so a lot of renters aren’t sure what it’s for. For many people, it seems like a way for the property management company to squeeze even more money out of a renter! In this article, we’ll answer all your questions related to this crucial, one-time payment. That way, you’ll be as informed as possible when it comes time to sign the lease and pay all the associated rental fees.
What is a security deposit?
A security deposit is a set amount of money that a tenant pays to a landlord before moving into a rental property. Essentially, it’s like insurance for the managers/owners to protect their property from damage. The amount of money varies by state or property. So, the payment could be one month’s rent, two months’ rent (also known as twice the amount) or another flat fee set by the property manager.
The funds are held by the manager for the duration of the lease. In fact, state laws dictate that the money must sit in a bank account. At the end of the lease, the landlord returns that money to the tenant, in part or in full, following a move-out inspection of the rental. Or, the property manager can keep it to cover damage other than normal wear and tear. If the damage costs less to fix than the security deposit, the landlord will return the remaining amount to the tenant. So, you might not lose all of the last month’s rent, but you could lose some of it.
When do I pay my security deposit?
The entire security deposit is usually paid when you sign the lease. Often, they’ll also be paying for the first months’ rent, last month’s rent and any other related costs. Tenants pay security deposits by check, money order or electronic payment.
How much is a security deposit?
In general, the amount of the security deposit will be the equivalent of one month’s rent, or maybe two. For example, if your monthly rent is $500 and your landlord requires first and last months’ rent for the deposit, you’ll need to have $1,000 on-hand for the security deposit.
Credit score can also impact how much you need to put down. Low credit scores can turn into a higher security deposit unless you have a co-signer.
Other factors, like the rental application, determine how much to charge for an apartment security deposit. A potential tenant with solid employment history and no criminal record is likely charged less. Also, the rental type and quality, state laws and local market rates all play a part. Often, states limit the security deposit amount, so that renters aren’t totally price gouged.
Why do landlords collect security deposits?
While not all property managers collect security deposits, it’s a pretty standard part of the rental agreement. Property ownership is a difficult business with significant risk, so this helps landlords cover their bottom line.
Property owners collect security deposits as a financial safeguard to protect their properties from damage or other irresponsible actions by residents. Here are some examples of what a security deposit would cover.
Property protection
Accidents happen throughout a lease. If a tenant breaks a light fixture or cracks the drywall, the cost to fix those would come out of the security deposit as they were the tenant’s fault. Knowing that they’ll be out of a hefty chunk of change if they aren’t careful incentivizes people to avoid damaging the unit. Renters who want to get their entire security deposit back should treat the apartment with care and respect.
Financial protection
Security deposits also cover any bills or rent that are delinquent at the end of the lease agreement. So, if you were behind on rent for one month and still haven’t paid that back to your landlord by end of the lease, or you have unpaid utilities on your account, they could take the amount out of the deposit.
Pet protection
If you’ll be sharing your new home with a furry best friend, chances are you’ll have to pay a pet deposit, in addition to the security deposit. This would cover any damages your pet makes to the rental, like tearing up or soiling the carpet. Some landlords will also charge a small amount in “pet rent” on top of the deposit.
What does a landlord do with a security deposit?
The security deposit is “just in case” coverage. For the duration of the lease, the funds will be kept by the landlord in a bank account that generally is separate from their business bank account.
Because of this, the security deposit may collect interest. Some state laws say that the tenant gets those earnings when the landlord returns the deposit money, but in others, the landlord retains the interest earnings. This is something to think about and confirm with your landlord before you lease the apartment.
Can my landlord make deductions from my security deposit?
Remember, a security deposit is a measure to protect the property manager, not the tenant. There are certain circumstances under which your landlord can deduct from it. Here are the most common reasons a renter won’t get the security deposit back.
There’s significant damage
Wear and tear are normal and expected, which is why it’s the landlord’s job to fix or repair things like old appliances, worn-out carpeting and mold damage. However, if you gouge a hole in the drywall or generally damage the unit in an abnormal way, it’s your responsibility to pay for repairs, and the cost of such repairs will come out of your deposit. So, if you want to get your security deposit back, treat the rental unit gently.
In most states, though, there are provisions in place to protect the tenants from having unreasonable or unnecessary dollars taken from their deposit by the landlord. For example, in California, landlords can’t withhold security deposits to pay for things like painting or carpets unless they were totally wrecked by the renter.
The landlord is also prohibited from using a deposit to fund repairs for preexisting problems in an apartment. Don’t be afraid to ask for an itemized list of repairs if you suspect something dishonest is going on.
You owe unpaid rent or fees
If you have any late fees or unpaid apartment rent at the end of your term, your landlord can take that out of your security deposit. To avoid this, pay rent on time every month, and keep an eye on related bills, as well! Avoid overpaying, though. If you put down last months’ rent at the beginning, don’t forget and double down!
You broke the lease
Sometimes, a landlord can also deduct from your security deposit if you break the contract without providing adequate notice. So, avoid this unless it’s absolutely necessary. If you can’t get around it, give your landlord as much notice as possible. Everyone appreciates a thoughtful renter.
You left the unit in a mess
Not cleaning the unit before vacating is grounds for landlords to deduct from the security deposit. That’s why it’s always a good idea to make sure the apartment is tidy before moving out.
However, renters are only required to leave the unit as clean as it was when they first moved in, so that’s what you should aim for: that it’s clean enough to move in for the next tenants. Empty the refrigerator, wipe up any big spills and otherwise “broom clean” the place. Most landlords don’t expect it to pass the white glove test but want it tidy and relatively easy for professional cleaners to handle. Don’t lose a months’ rent because you were too lazy to straighten up!
How long will it take to get my security deposit back?
This can vary by the property manager and state, but most require the landlord to return your security deposit within 30 days of the tenant vacating the premises. Your landlord will include the timeframe in your lease, so make note of that when agreeing to the lease. Also, pay attention to how your landlord will return the payment so you know what to expect when you leave your apartment.
If you’re not getting some or all of your money paid back, the property manager has to provide a written explanation detailing why, including an itemized list of deductions. In many states, they even have to provide receipts detailing repairs.
What if I don’t get my deposit back?
If you don’t get all or part of your money paid back, the simple answer is that it’s probably because your landlord had to make deductions to cover costs. If you disagree with the reasons they deducted from the deposit, there are some options for recourse.
First, before you turn over the apartment keys, take pictures of every room and closet. That way, if the manager tries to pull a fast one you’ll have photographic evidence.
Next, if you disagree with the deductions, write a demand letter to the landlord disputing them, and explain why you’re entitled to the deposit refund. Be sure to retain a copy for your files.
If you’re unable to come to a satisfactory agreement, you can file a lawsuit in small claims court, which handles cases valued at less than $10,000. This is a relatively inexpensive and relaxed court option. Or, you can turn to a professional mediator to help everyone see eye to eye.
Are there alternatives to security deposits?
Thanks to rent, application fees, security deposits and move-in charges and so on, renting is an expensive process. Luckily, there are some emerging security deposit options that cost less and are more efficient and painless for everyone involved.
Lease insurance
Increasingly, landlords are pursuing lease insurance options like LeaseLock to eliminate security deposits altogether. Similar to other types of insurance, the tenant or landlord pays a small fee (starting at $19 for LeaseLock) per month for coverage against thousands of dollars in property damage.
Pay-per-damage
Instead of dishing out a huge amount to the landlord upfront as a security deposit, some landlords choose to bill for damages on a case-by-case basis. They can only charge for damages up to the amount of a traditional security deposit, though, and a third-party company oversees the claim and process to ensure the landlord isn’t over-billing the tenant.
Surety bonds
Facilitated through a third-party bonding company, surety bonds allow renters to only pay a small fraction of the security deposit to the landlord. Because the bonding company guarantees that the tenant will pay and abide by the terms of the bond, landlords are able to accept a much smaller amount as there’s legal protection in place.
Do security deposit laws vary by state?
The short answer is yes, security deposit laws can vary widely by state. Some states do not have statutory limits, which means they don’t specify how much a landlord can charge for a security deposit. In that case, the amount is at the discretion of the landlord.
In other states, though, there’s a cap limit to what the landlord can charge for a security deposit. Many states also have strict laws regarding when to return the security deposit to the tenant after vacating the premises. Here, you can find a full run-down of security deposit laws state-by-state.
Don’t feel insecure about security deposits
Having to save and temporarily sign away a month’s rent (or more!) for a security deposit can feel scary. But it’s completely normal and is in the best interest of both parties. If you maintain the terms of your contract and don’t leave anything grossly damaged, you should get your deposit back. So, as long as you keep the parties and destructive animals to a minimum, you’re covered.
The information contained in this article is for educational purposes only and does not, and is not intended to, constitute legal or financial advice. Readers are encouraged to seek professional legal or financial advice as they may deem it necessary.
The White House released its first-ever standards aimed at reducing a bevy of safety and security concerns raised by artificial intelligence.
The order is sweeping and addresses potential risks AI technology poses to consumers, workers, national security, privacy, innovation and immigration.
“One thing is clear: To realize the promise of AI and avoid the risk we need to govern this technology,” said President Joe Biden during a press conference on Oct. 30. “There’s no other way around it, it must be governed.”
The executive order includes an emphasis on the development of new standards, tools and tests across the board. There are eight parts to the order:
Safety and security. Create new safety and security standards for AI, with an emphasis on national security.
Consumer privacy. Protect consumer privacy in AI systems.
Advancing equity. Avoiding algorithmic discrimination in the workplace; by federal contractors; and landlords. It also calls for best practices for using AI in the judicial system.
Health care and education. Advance the use of AI in the development of affordable and life-saving drugs. Provide educators with the resources to deploy AI-enabled educational tools.
Mitigate risks to workers. Collect information on how AI could impact the labor market while developing principles and best practices to maximize the benefits of AI while addressing potential risks like job displacement.
Promote innovation and competition. Expand grants for AI research in key areas like health care and climate change. Expand the ability of highly-skilled immigrant workers with expertise in critical areas to remain in the U.S.
Collaborate with other nations. Establish international frameworks for the use of AI worldwide.
Ensure effective government use of AI. Develop guidance for agencies’ use of AI systems; helping agencies acquire AI products and services; and accelerate the hiring of AI professionals in the federal government.
Biden said during the press conference that the order is the “most significant action any government anywhere in the world has ever taken on AI safety, security and trust.” At the conclusion of the press conference, Biden also called on Congress to pass legislation on AI.
What’s in the Blueprint for an AI Bill of Rights?
On Oct. 5 the White House released its “Blueprint for an AI Bill of Rights” outlining five principles to guide the creation and distribution of automated systems. Recommendations under each of the principles include continuous risk identification and mitigation, as well as testing and evaluation during all phases of the creation of AI systems.
Safe and effective systems. Automated systems should be designed to proactively protect users from harm.
Algorithmic discrimination protection. Automated systems should be used and designed in a way that avoids discriminatory treatment of people based on protected classifications such as race, sex, religion and disability.
Data privacy. Automated systems must include built-in protections to protect users from abusive data practices and users should have agency over how their personal data is used.
Notice and explanation. People should be notified when an automated system is being used and should be provided with plain language explanations of outcomes from that system.
Human alternatives, consideration and fallback. People should be able to opt out of an automated system and have access to a human alternative, when it’s appropriate — based on “reasonable expectations in a given context.”
More AI news
Aug. 9: The White House announced a two-year competition called the “AI Cyber Challenge” that challenges competitors to identify and fix software vulnerabilities using AI. It includes collaboration with AI companies like Anthorpic, Google, Microsoft and AI. The competition includes $20 million in prizes and is intended to drive the development of new improved computer code security technology.
May 4: The White House announced it secured voluntary commitments from 15 of the top leaders in AI to have their systems publicly evaluated to find out how they align to the AI Bill of Rights. The companies include Amazon, Anthropic, Google, Inflection, Meta, Microsoft and OpenAI.
April 25: A joint statement made by the Federal Trade Commission, Department of Justice, Consumer Financial Protection Bureau and the Equal Employment Opportunity Commission reaffirmed its commitment to enforcing existing discrimination and bias laws among those who use AI to conduct business including social media platforms, banks, landlords, employers and other businesses.
Additional coverage of artificial intelligence from NerdWallet:
Small business
Personal finance
(Photo by Chip Somodevilla/Getty News via Getty Images)
Inside: Are you thinking about moving out? This guide will help you identify the costs of moving, calculate how much you need to save, and advice on expenses. You need to learn and plan for the practicalities of living on your own.
Taking the leap to move out and start living independently is a significant milestone.
However, it’s important to ensure you’re financially prepared for this exciting new chapter in your life.
One vital step you need to take is to start saving money, essential for covering your future expenses, emergency fund, and even fun activities. Through careful budgeting, consistent saving, and efficient spending, you can make the transition smoother and stress-free.
Around here at Money Bliss, we focus on the need to save money before making a purchase or taking the next step, so you will be better equipped and stay debt free.
This way, you can fully enjoy the freedom and responsibilities that come with having your own place.
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.
Why is Moving Out on Your Own Important?
There comes a time in one’s life when one feels the need to spread their wings and live independently. We all wanted to move out at 18 – I remember!
This crucial step, however, requires substantial planning. Yet, most just jump right to moving out.
The key thing you must do? Save. But, why so important?
Here’s why: independence means bearing your own expenses. Rent, groceries, utilities, they’re all on you.
Plus, unforeseen emergencies are less shocking when you have a well-stocked safety net.
What’s a good amount of money to have before moving out?
The amount you need to move out depends on many factors.
However, on average, you should aim to have between $6,000 and $12,000 stashed away before you pack your bags.
This sum would cover initial moving costs, deposits, furniture, essentials, and a few months of rent.
Remember, it’s not just about surviving your first month. You’ll need enough to keep you comfortable while you’re settling into your new life.
How much should I save before moving out?
Remember, there isn’t a “magic number.”
Yet, many wonder is $5000 enough to move out?
Your savings should cater to your housing costs, which ideally should not exceed 1/3 of your monthly income. Besides, factor in regional cost of living, moving expenses, and an emergency fund.
What determines the amount needed?
The amount to save before moving out varies greatly. It hinges on factors like your targeted living area because there is a wide fluctuation of HCOL vs LCOL areas, your projected expenses, and your income level. The rent in one city might be higher than in another.
As well as your personal lifestyle choices and spending habits will greatly affect monthly expenses.
Evaluation: Your Financial Status
Your financial status, including current income and expenditures, plays a crucial role in determining the proportion of your earnings you should save before moving out.
If you have a higher income with lower outlays, you can save more, whereas having roommates can significantly cut down your living expenses, enabling better savings.
A careful review of these factors allows you to create a realistic saving plan tailored to your unique financial circumstances.
You need to make sure you are on track to how much money should you have saved by 25.
Assessing your current income
Take a deep look at your income. How much do you earn each month? How regular is this income? These are vital questions.
Your net income (what you earn after taxes) sets the tone for what you can afford. This is the amount listed on your paycheck.
Learn more about gross pay vs net pay.
Understanding your debt load
Debt can be a significant hindrance when contemplating moving out. How much do you owe monthly?
You need to consider your debt-to-income ratio. This is what mortgage lenders do to figure out if I make 70000 a year, how much house can I afford.
If your debt is taking up more than 30% of your income, you need to be careful on how much you spend on rent and other mandatory expenses.
Learn how to pay off your debt faster using Undebt.it.
Know Your Expenses: Breaking Down the Costs
I’ll be honest. This is what most people overlook when they move out or even purchase a new home.
For instance, the couch I loved couldn’t fit into our new house. Sigh.
Now, is the time to learn how to save 5000 in 6 months.
Identifying the cost of moving
Moving costs can bite! They depend on relocation distance, packing supplies, and the complexity of the move.
Movers can range from hundreds to thousands. According to Moving.com, the average costs for a studio or one bedroom range from $501 – $985. 1
Thankfully, you are young and you can pay friends for help with pizza. But, you still need to account for a moving truck if needed.
Hidden costs you need to consider
When moving out, some costs aren’t glaring. These include fees for installing new services, delivery fees for new furniture, or penalties if foregoing a current lease. Yes, these hidden costs can pile up!
Even, the costs to put blinds up at your new place! A room darkening shade can easily set you back $50; I know, I like my sleep.
So, be sure to consider them when saving for your move.
Setting Up a Personal Budget
A budget plays a crucial role in being financially stable. Period.
Call it adulting if you want to, but you cannot spend more money than you make. That is a recipe for a disaster and way too much debt.
By adhering to a well-planned budget, one can prevent financial stress to ensure financial security and start your journey to financial independence.
How to start a personal budget
Starting a personal budget is simple.
List your income and expenditures. Include rent, groceries, utilities, subscriptions, and yes, even luxuries.
The goal is to spend less than you earn.
Then, you can save and plan for your future.
That means you may not be able to afford everything you want. And using credit cards to fill the gap isn’t smart.
The 50/30/20 budget rule explained
For many, the 50/30/20 rule serves as a rough guide for managing your finances.
It suggests allocating 50% of your income to necessities, 30% to wants, and 20% to savings.
This is a beginner-friendly method to manage spending without feeling overwhelmed.
Starting to use a budget app is extremely helpful.
YNAB
Enjoy guilt-free spending and effortless saving with a friendly, flexible method for managing your finances.
Pros:
Comprehensive approach to budgeting, helping you plan monthly budgets based on your income.
Offers expert advice, making it suitable for those who require an in-depth, forward-thinking budgeting strategy.
Superior synchronization skills make it the winner in this area.
YNAB has extra features like goal setting for budgeting, shared budgeting tools for partners.
Option to manually add and upload transactions from accounts each month.
YNAB prioritizes user privacy.
Avoid These Budget Downfall
The most common expenses that are forgotten are irregular expenses such as vacations, weddings, or holiday spending. These variable expenses do not occur on a consistent schedule.
To manage these, note these big-ticket events on a calendar, estimate their cost, divide by 12, and contribute that amount to a high-yield savings account each month, offering you a guilt-free way to cover these costs without stressing over money.
Make sure you remember all of your expenses by checking out this full list of personal budget categories.
Creating and Managing an Emergency Fund
Why an emergency fund? It provides you with a safety cushion.
This fund prevents unexpected expenses from ruining your plans or sending you spiraling into debt. It acts as your financial parachute when you need it the most.
Around here at Money Bliss, we consider it a staple in financial wisdom.
Ideal size of an emergency fund
As a rule of thumb, your emergency fund should cover at least $1000-2000 in savings. This will provide money to cover a car breakdown or new car tires. Honestly, the goal is never to use your emergency fund.
However, you may look at a bigger rainy day fund that will cover 3-6 months of living expenses. This will provide you with a comfortable safety net against unexpected events like job loss or medical emergencies.
But remember: start small. Even $1,000 can buffer you from financial shocks. Check out these mini savings challenges.
Enough Money for One Year
A year’s worth of savings may sound excessive.
However, it provides unmatched stress relief and financial stability that can be life-changing, especially for young adults.
This tip will change your financial landscape immensely and provide you with more opportunities than you can imagine.
You can handle life’s ups and downs more easily when you have an entire year’s expenses sitting in your bank account.
Raisin
Simply select one of the high-yield savings products offered by their network of federally insured banks and credit unions to begin your savings journey.
You can open a free Raisin account in just a few minutes!
Compare Rates
Better Planning for Potential Bills and Fees
When preparing to live independently, don’t forget to plan for unanticipated costs.
Rental fees and deposits explained
When you rent, you’re likely to encounter a range of fees.
First off, you’ll have to foot a security deposit – typically equal to one and a half month’s rent. This upfront cost acts as insurance for landlords against damages. If you leave the place in top shape, you’ll get your full deposit back!
Additional fees could include application fees or non-refundable move-in fees like background checks. Know what you’re paying for before you sign the lease.
Utilities and recurring expenses
Electricity, gas, water, and internet – these utilities fall on your shoulders when you’re living solo.
These costs can eat a hole in your wallet if unchecked!
To avoid surprises, ask for estimates before signing a lease or find a place that includes utilities.
Other recurring expenses? Consider subscriptions. Gym, Netflix, Spotify – they all add up!
Trim
Perfect for the person who hates to hassle with canceling subscriptions and checking spending.
Trim adds value in such ways as canceling old subscriptions, setting spending alerts, checking how much users spent on ride-sharing apps the previous month, and automatically fighting fees.
Learn More
Go for a Trial Run Before Moving Out
Adopt the practice of “paying rent” beforehand by setting aside a third of your income into a dedicated savings account which can test your financial readiness for the move. See if you can move out and afford it before you actually move.
Remember, being savvy with money while planning to move out involves carefully auditing your spending over the last 3-6 months and developing a budget that accounts for future expenses, savings, and essential purchases.
This may save you headaches in the future.
Smart Moves: Making Rent Like a Boss
You need to understand how you are starting to make financial decisions.
In fact, reading this financial advice for young adults would be helpful.
Understanding rent payments.
Rent payments can be daunting as prices for a single bedroom apartment are $1700/month. 2
Many landlords may tenants to earn at least three times their rent.
Payments are usually due on the first day of the month. Late payments can lead to hefty fees!
Stay organized by setting reminders or setting up auto-pay.
Considering a roommate.
On the fence about getting a roommate? It’s worth considering!
A roommate can drastically cut your living expenses. Half the rent, half the utility costs… that sounds like a sweet deal.
On the flip side, you may have less privacy and there can be disputes.
However, with clear communication and shared responsibilities, it can be a great experience. It’s a great option if your income is tight. Choose wisely!
Opting for second-hand furniture
Furniture expenses can add up quickly, but there’s a savvy solution: opt for second-hand furniture! Yes, it’s cool to be frugal.
In fact, vintage pieces can add character to your home. Perhaps snag a few items from your parent’s home, Buy Nothing Group, or thrift stores. It’s not about being cheap, but about being smart!
You can always upgrade later.
Key Takeaways Before Taking That Leap
Moving out with roommates not only gave me a firsthand experience of independent living but also exposed me to the nuances of financial management. These initial steps helped me understand budgeting and the importance of balancing expenditures with earnings.
Then transitioning into renting my own place, I was armed with the knowledge I gained and was better prepared to face the challenges, creating a smooth transition to living completely on my own.
Checklist before getting your own place
Before making the big move, have you:
Saved enough to cover deposit, rent, moving, and utility hook-up fees?
Started a personal budget, tracking income and expenses?
Drafted a rough spending plan using the 50/30/20 budget rule.
Built an emergency fund?
Discussed potential apartment rental fees and deposits?
Considered recurring expenses and variable expenses?
Weighed the pros and cons of having a roommate.
Looked into second-hand furniture?
Can you comfortably cover living expenses with your income?
Have you accounted for all possible costs? Think of moving costs, utilities, groceries, health insurance, and more.
Have you considered the cost of living in your preferred location?
How stable is your income? Can it sustain your independence long-term?
Check out this first apartment checklist.
Frequently Asked Questions (FAQs)
Before moving out of your parents’ house, aim to save at least $5,000. But, you want to start off financially sound, so aim higher like $10,000. This amount would ideally cover your moving costs, early rent payments, and the setting up of utilities.
Remember, the real magic figure depends on your cost of living and your current income.
Put simply, saving $1,000 a month is excellent!
As an expert, Money Bliss often recommends saving at least 20% of your income each month. If you can stash away $1,000, you’re well above this bar.
Remember, every little helps when working towards financial independence. Check out our 52 week money saving challenge to get started.
Start Saving for How Much Money I Need to Move Out
Taking the leap into independent living can feel daunting. But with careful planning, budgeting, and saving, it’s an exhilarating journey.
The best advice I can give someone who is looking to move out is to plan ahead for the journey in front of you.
Remember, having anything between $6000 and $10,000 saved up is an excellent starting point.
As you navigate your financial freedom, adopt the 50/30/20 rule for managing expenses. Around here we call it the Cents Plan Formula.
Most importantly, stay prepared for life’s unexpected twists with an emergency fund. And don’t be shy to make some smart moves like considering a roommate or opting for second-hand furniture.
The journey towards independence is rewarding and fun – as long as you’re financially prepared. So pop that calculator, get budgeting, and start saving for your own place!
Source
Moving.com. “Moving Cost Calculator for Moving Estimates.” https://www.moving.com/movers/moving-cost-calculator.asp. Accessed October 25, 2023.
Rent Cafe. “Average Rent in the U.S.” https://www.rentcafe.com/average-rent-market-trends/us/. Accessed October 25, 2023.
Know someone else that needs this, too? Then, please share!!
Did the post resonate with you?
More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
A ‘Greenery-Filled Terrarium’ Will Be at the Center of New ODA Skyscraper in Seoul
An expansive “sky garden” will sit at the middle of Terrarium Cheong-Dam, a new skyscraper in Seoul, South Korea, designed by architecture studio ODA. The 45-story, 200-meter tower will be built in the city’s Gangnam district and will have a mix of high-end residences and offices. The semi-private sky garden, which ODA refers to as a “terrarium,” will cut through the center of the modern building. Plus, the skyscraper will sit on a podium with a public park. The addition of the greenery is intended to enhance the surrounding urban landscape. Dezeen
U.S. Mortgage Rates Hit a 23-Year High
The interest rate for a 30-year fixed-rate mortgage has hit its highest level since September 2000, following the seventh consecutive weekly increase. Now at 7.9%, the highest interest rate in 23 years is driving mortgage applications to a 28-year low. “Mortgage activity continued to stall, with applications dipping to the slowest weekly pace since 1995,” MBA vice president and deputy chief economist Joel Kan said. “These higher mortgage rates are keeping prospective home buyers out of the market and continue to suppress refinance activity.” Reuters
U.K. Landlords Threaten to Quit Over Proposed Renters’ Reform Bill
More than half of landlords in the U.K.—54%—said they would consider quitting because of the proposed Renters’ Reform bill, which is now getting a second reading. One out of five landlords said abolishing no-fault evictions is one of the least attractive elements of the reform bill, as it is currently the only way to quickly evict tenants. “It’s important that landlords are given the time and information they need to prepare for significant upheaval in the coming years, so they can continue to provide much-needed housing for almost five million households nationwide,” said Alan Thomas, U.K. chief executive at Simply Business. PropertyWire
Danny McBride Lists Hollywood Penthouse for $1.8 Million
Actor and screenwriter Danny McBride is parting with his longtime Hollywood condo, which is now on the market for $1.8 million. McBride, who created the HBO comedy shows “Eastbound & Down,” “Vice Principals” and “The Righteous Gemstones,” purchased the duplex penthouse in 2009 for a little more than $1.4 million. The home, which has previously been listed both on the sales and rental markets, sits on the 10th floor of the landmarked Broadway Hollywood and overlooks the Hollywood Sign and the Capital Records Building. Spanning almost 2,200 square feet, the penthouse has double-height ceilings, one bedroom and two bathrooms. McBride and his family have primarily lived in Charleston, South Carolina, since 2017. Robb Report
Here’s everything you’ll need to know about how to rent a house, including how it’s different from apartment renting.
Maybe you have a growing family or elderly parents moving in. Perhaps you need a dedicated office or you’re craving outdoor space and more privacy than most apartment complexes offer.
If you can’t afford to buy your own home, you can upgrade your living arrangements by renting one. Still wondering how to accomplish this milestone, though? We’ll walk you through it step by step.
How renting a home is different than renting an apartment
While the renting process may be similar, there are large differences that any prospective tenants should be aware of, so their renting process runs smoothly. Navigating the local market is tricky enough, turn to this guide to delve into the must-knows for your home renting experience.
1. Your rent price will look drastically different
Before beginning your hunt for the perfect rental home, you’ll need to figure out what you can afford. Factoring in your income and recurring expenses including any loan payments, check out our helpful tool that will calculate average rents and the cost of living in major cities. You’ll notice upfront, that renting a house may be pricier, due to numerous reasons.
In addition to the monthly rent you’ll be forking over, there are other costs to consider that you may not have had to deal with as an apartment dweller. For example, things like heat, hot water, electricity, internet and satellite TV that are sometimes covered with an apartment rental will likely come straight out of your pocket when you rent a house.
Also, you might be responsible for lawn care, snow removal and other general maintenance, so if you don’t want to take care of those yourself, plan to budget for hiring out those tasks.
You’ll also need to know your credit score to see if you have to get a co-signer or guarantor — someone with good credit who would be liable for your rent if you can’t pay it. This will be added to your lease agreement should this be the case.
2. Your wants and needs will be more extensive
Once you’re clear on your budget, the fun part of researching houses for rent begins. It’s best to start by narrowing down your search to a few choice neighborhoods that offer the amenities you’re looking for, including proximity to work or your children’s schools. Due to the nature of a home (which lacks the built-in amenities an apartment has) your wants and needs for your ideal rental property will be longer.
It’s helpful to make a list of wants vs. needs to help you sort through your thoughts on your dream rental properties:
If you or your family are active or love nature, is the area close to parks and recreation centers?
Do you want a bustling neighborhood packed with restaurants, cafés and boutiques, or would you prefer a quiet, suburban environment?
Is a backyard important to you?
Do you need a garage or dedicated parking space?
Are you looking for a detached home to rent or are you okay with a townhouse?
Does the neighborhood have easy access to public transportation?
3. You’re sure to attend more tours and have more questions
Reading rental listings and taking a good look at the photos is typically not enough to determine whether a rental house might work for you.
While apartment complexes might post floor plans and room sizes online, you might not have advanced information like that with homes for rent. This means you’ll need to ask the landlord, property manager or rental property owner about many things that may not be explicitly listed:
Is the home pet-friendly?
Are appliances included, or would you need to purchase your own?
Is the house furnished? If it is, can you decide what stays or goes?
Are laundry hook-ups in place?
If utilities are not included in the monthly rent, how much can you expect to pay for heat, electricity and hot water?
Can you make decorative changes, such as painting the walls or changing light fixtures?
If there’s a backyard, can you plant a garden?
Is there a home owners association to which you will owe monthly fees?
4. Your neighborhood will be more important than ever
If you like the looks of a house for rent, and the landlord has answered questions to your satisfaction, make sure you also tour the area to get a sense of whether it would be a good fit for you and your family.
Try to speak to some potential neighbors, too: Ask them if it’s safe to walk the streets at night, whether it’s noisy and whether there are other children on the block.
It’s a good idea to visit the street both during the day and in the evening if possible. If the rental home does not have a garage or dedicated parking spot, check out whether street parking is readily available. It’s important to confirm that the right rent price takes into account the neighborhood and what it has to offer potential tenants.
5. There’s additional paperwork, like a home rental application
Paperwork for renting an apartment is a given, however, there tends to be a bit more when it comes to renting a home. Keep in mind, if the property is in a popular neighborhood in a hot real estate market, you won’t want to waste any before time letting the landlord know you’re ready to begin the application process.
Some property managers will charge you a fee between $25 to $100 before opening a file. Supply the following information to help the landlord determine if you are a good candidate to rent the house:
Your personal contact information
Proof of income. If you work full-time, pay stubs are sufficient. If you are self-employed, you can present bank statements or tax returns from the past three years. Retirees can provide proof of pension, 401(k) or bank statements.
Your guarantor’s name and contact information, if applicable
References who can vouch for your reliability and trustworthiness, such as a supervisor or former landlord
6. More rules you’ll have to adhere to
If your rental home has an HOA, you’ll need to check in with them to see if there are any regulations to follow on moving day, such as not leaving empty boxes at the curb when moving. There will likely also be regulations ranging from decorating to construction restrictions that the homeowner, in this case the landlord, will have to adhere to.
The similarities between renting an apartment and a house
There are some steps and parts of the renting process that don’t change even though the type of rental property does. There are similarities beyond the obvious of needing to pay rent and adhering to rental laws.
1. The background check
Landlords want tenants who have a steady income, a good loan repayment track record and a history of paying rent on time. Often, they will conduct a background check to assess whether they want to rent you their house.
During this part of the process, a property manager will likely want to confirm your employment, speak to the references you provided and check your credit report to see how you managed past payments.
2. The required fees such as a security deposit and first month’s rent
Some landlords will require a security deposit equivalent to a month’s rent, which would cover any damage to the property you might cause during the term of the lease. In some cases, you can either be refunded this fee when the lease is up or it goes to the last month’s rent.
You might also have to pay the first month’s rent once you sign a lease, even if you’re not moving in for a while. Sometimes, you’ll be charged a deposit for keys if you require more than one.
3. The moving process
While you won’t have to reserve an elevator to move into your rental home the way you did when you lived in an apartment, there are some things you need to organize before the big move.
For example, before you book a professional moving company, find out from the landlord if you can reserve a parking spot in front of the house where the truck can park, or whether it can back onto part of the property for easier unloading.
Once that’s done, you can concentrate on packing up and getting ready to move into your new home. Don’t forget to advise utility companies, internet and television providers and anyone else who needs to know you’re moving elsewhere.
Make sure to stay on top of details
Taking the time to research rental homes and neighborhoods and asking the right questions will make the transition from apartment living to a home rental go more smoothly.
Being organized with your paperwork and task list for moving day will provide peace of mind and fewer last-minute glitches so that you can celebrate once you’re settled into your new rental home.
And if you’re thinking about renting out your home for some passive income-generating opportunities, take a look at our rent estimator to see how much you could be earning.
Wesley is a Charlotte-based writer with a degree in Mass Communication from the University of South Carolina. Her background includes 6 years in non-profit communication and 4 years in editorial writing. She’s passionate about traveling, volunteering, cooking and drinking her morning iced coffee. When she’s not writing, you can find her relaxing with family or exploring Charlotte with her friends.
Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations.
Having no credit or bad credit both present different challenges. Bad credit can prompt frequent collection calls and take a long time to repair, while no credit can reduce your eligibility for most loans.
Whether you’re new to credit or you have years of activity (and a few blemishes on your report), you may wonder, “Is no credit better than bad credit?” No credit and bad credit can both hold you back in their own ways. No credit means that lenders can’t easily review your credit history, while bad credit means you’ve earned derogatory marks on your credit profile.
We’ll explore the nuances of both situations and share ways you can bolster your credit.
Key Takeaways
Everyone starts with no credit until we take an action that must be reported to a credit bureau.
It takes time to increase your credit, whether you have bad or no credit.
There are certain loans that you can apply for with bad credit.
What Are the Impacts of Each?
Credit scores, alongside a person’s employment status and annual income, help lenders decide if they’ll approve an applicant for loans, credit cards, and low interest rates. Borrowers with no or bad credit can still secure loans despite their current credit status, but it helps to know how their prospects might be affected.
The Impact of No Credit
People start to build credit when they make financial decisions that can be reported to a credit bureau. Applying for a credit card, paying down a student loan, or paying rent for a property you’ve leased are just a few actions that would fall under this umbrella.
Lenders may have a harder time getting a sense of a no-credit borrower’s credit risk since the borrower won’t have a credit report. Some effects of having no credit score include:
Ineligibility for most loans: It’s still possible to acquire bad credit loans, but it’s generally much harder to gain substantial funding with no credit history.
Reduced credit card options: Borrowers with no credit history may only be eligible for cards with low limits or higher interest rates.
Renting restrictions: Landlords often ask that renters meet or exceed a specific credit score range.
The effects of bad credit
A person’s credit score can fall for multiple reasons. While certain actions, like applying for new credit cards, can temporarily cause one’s score to dip, long-term financial habits determine credit scores the most.
Consistently making late payments, exceeding your credit limit, and neglecting your oldest accounts can lead to a bad credit score. Bad credit can present some of the same challenges that no credit can, as well as unique hurdles, including:
Collection agencies: If you owe a significant amount of debt, a collection agency may repeatedly call and ask you to pay your outstanding debt. Knowing your debt collection rights can help if an agency threatens to seize your assets or ask for more money than you owe.
Credit limit decreases: A bank can reduce a borrower’s credit limit if their score drastically decreases. These terms are usually outlined in the cardholder agreement you sign when first acquiring a credit card.
Stress: Bad credit can decrease morale and raise stress by making it much harder to secure loans and decrease your interest rates. Depending on the severity of your debt, improving your credit can take a long time.
5 Ways to Build Credit
Whether you have bad credit or no credit history whatsoever, you have the power to improve your scores—and your financial opportunities as a result. The following five recommendations can bolster your credit over time.
Make Payments on Time
Payment history influences 35% of your FICO® credit score, which is the model most lenders rely on. Consistent, on-time payments will demonstrate financial responsibility and gradually raise your credit.
Limit Applications for New Credit
Each time you apply for new credit cards or loans, your profile receives a hard inquiry that temporarily lowers your score. Applying for too much credit all at once can significantly hurt your score.
Regularly Check Your Credit Report
Reviewing your credit report grants you insight into your financial habits, as well as errors or inconsistencies. Credit.com offers a free credit report card that reviews your financial habits in five categories, including the number of inquiries on your account and the diversity of your credit mix.
Apply for a Credit Builder Loan
A credit builder loan helps no- or poor-credit borrowers improve their credit by paying down a small amount of debt. These loans usually cap out at $1,000 and have 6- to 24-month repayment terms. Check if a loan’s interest rate or repayment terms will fit within your budget before you sign any agreements.
Maintain Your Oldest Accounts
Keeping your oldest credit card accounts open will typically benefit your credit, even if you don’t use them anymore. This is because your oldest accounts help boost your credit age, and they can also help you keep your credit utilization ratio lower, both of which have a positive effect on your overall credit health.
How to Find Credit Cards for Bad Credit
With a bit of effort and the right know-how, you’ll find multiple avenues to get credit cards for bad credit. Signing up for a credit monitoring service is a great first step. You’ll get strategies for handling debt and recommendations for credit cards and loans based on your current circumstances.
Many commercial banks offer at least one credit card for low-credit applicants. These cards often have low credit limits and may not have premium features like cashback or reward points. Nevertheless, responsibly using and paying down these cards will help display your creditworthiness over time.
The best credit cards and loan options become available with a higher credit score. As you take positive steps to build your credit, you’ll be eligible for more favorable offers—which can further enhance your credit profile. Resources like Credit.com can help you better understand your overall credit profile.
Work on Your Credit With Credit.com
Challenges are par for the course on any person’s credit journey, whether they have excellent credit or no credit history whatsoever.
Credit.com’s free credit report card can help you navigate those challenges by reviewing your credit age, payment history, and account mix—then offer advice that you can implement when managing your credit.