In our latest real estate tech entrepreneur interview, we’re speaking with Rowland Hobbs from Stake.
Who are you and what do you do?
I’m a recovering Fortune 500 CEO consultant and 3x founder. I believe in building companies with purpose to make people’s lives better. My current company, Stake, invests in renters. We save landlords money—from overpaying for marketing, broker, and concession costs—when our renters move in, pay on-time, and renew. We share those savings with the renter by matching up to 10% of the rent payment every month. Renters can save the rent matches up and earn more, or transfer it to their bank and use it as they like. We call this Return on Rent and it’s the first loyalty network for rentals.
What problem does your product/service solve?
The rent is, as has been said “too damn high,” and renter’s can’t save for the things they love. It feels like throwing money away each month with each rent payment. With more people renting than at any other time in the last fifty years this is now a society wide challenge to build equity and savings. Meanwhile, property owners spend $13 billion annually on inefficient discounts and marketing that don’t reward the renter. The result today? Still $28 billion of lost revenue in vacancies every year. Stake is building the first loyalty network, powered by rewards, data and digital payments, to make this spend more efficient for the owner and impactful for the renter.
What are you most excited about right now?
We’ve built an incredibly simple and easy to use app that converts marketing, concession, and broker fees into a powerful Rent Match that rewards renters. However, this is just the beginning of how we build loyal, dedicated, renters who love where they live. We are introducing perks and member only benefits such as free and reduced cleaning services, and more. Renting is tough. First we’ve made renting easier on your wallet, and now we will make everyday by renting.
What’s next for you?
In our Brooklyn Beta Test we are listing 125 apartments a week, from over 30 property owners, and reach 4,000 renters who are moving into Stake apartments. That’s a lot of potential returns for renters, and savings for owners. We will be moving into new neighborhoods in New York, but even more exciting is our plans to reach a second city by year’s end. This means more renters saving, more owners spending to reward renters rather than marketers, and a bigger network of apartments with Return on Rent.
What’s a cause you’re passionate about and why?
Community is important to me. We should all flourish and feel safe and secure where we live. This month, it’s the 50th anniversary of the Stonewall riots which were a turning point in to create a more just, inclusive, society for the LGBTQ community. While we’ve made incredible progress in fifty years, we have much we need to do as a society to protect, and promote, everyone. That’s why I’m passionate about causes like the Anti Violence Project which is working to end hate-crimes and support survivors with advocacy and counseling.
Thanks to Rowland for sharing his story. If you’d like to connect, find him on LinkedIn here.
We’re constantly looking for great real estate tech entrepreneurs to feature. If that’s you, please read this post — then drop me a line (drew @ geekestatelabs dot com).
Life is expensive and paying for rent can take up a significant chunk of your paycheck. In an ideal world, 30 percent of your income should go towards rent and housing costs. But life happens and you may come up short on rent due to loss of income or other unexpected expenses, leaving you wondering if you should take out a loan to pay rent. Coming up short on your rent payment is an extremely stressful situation and you’ll be looking for ways to make your rental payment and avoid eviction.
If you find yourself in this situation, what do you do? There are several options to weigh and taking out a loan to pay rent is one of them. Let’s walk through the pros and cons of rent loans and discuss several options you can consider if you’re behind on rent payments.
Is it possible to take out a loan to pay for rent?
If you get behind on rent payments, you’re not alone. In fact, more than 7 million renter-occupied households are behind on just last month’s rent alone. So, what are your options and is it possible to take out a loan to pay for rent? The short answer is yes, you can.
Using a loan to pay rent is an option. You can obtain a personal loan to pay rent and for some people, it’s a good idea. However, before you take out rent loans, you need to consider if it’s the right choice for you.
Pros of using a personal loan for rent
If you’re strapped for cash and need to pay for rent, there are some plus sides to taking out a personal loan for rent.
Pro #1: Provides a window of time for re-assessing your finances
By taking out a personal loan to cover your rent, you buy yourself some time to get your budget back on track. With a personal loan, you can pay for rent (either what you owe from missed payments or for future rent payments). Once you pay your rent, you’ll find yourself less stressed and you’ll think more clearly so you can get your budget back in a place where you can pay your loan back and have enough money for future rent payments.
Pro #2: Gives you flexibility
Personal loans allow you to use the loan money for anything you need. So, taking out a personal loan gives you the flexibility to use the money for rent or any other expense you need to cover. This flexibility is enticing for renters who need some financial help as the loan doesn’t specify what you can and cannot use the money for.
Pro #3: You can shop loan ranges and rates
Before taking out a personal loan, you’ll be able to shop around for loan ranges and rates. Make sure to compare your findings before you make a decision. You can take out a loan for as little as $1,000 or as much as $60,000 if needed. You can also compare interest rates.
It is important to try and find a loan with a low interest rate so you don’t accrue more debt than is absolutely necessary.
Pro #4: Can build a credit score
This is both a pro and con of personal loans, depending on how diligent you are with repayment. If you make your loan repayments in full and on time every single time, you’ll pay the loan off within the limits and build your credit score. If your credit score took a hit or is low, this is one way to rebuild your credit history.
However, it’s essential that you meet the terms of the loan for this to benefit you.
Cons of using a personal loan for rent
As with everything, when there are pros there are cons. Before taking out a loan to pay rent, consider the negative impacts of rent loans.
Con #1: You’ll pay interest
With any type of loan, you’ll pay interest on the amount you borrow. So, if you take out a personal loan toward rent, not only will you pay the rent money, you’ll also be paying money toward the interest.
If you have no other options, then taking out a loan for rent allows you to make your payment, stay in your apartment and come up with a new financial plan. Keep in mind that you’ll pay more with this option because of interest.
Con #2: Adds to debt
When you take out a personal loan to pay rent, you’re adding to the overall amount of debt you have. This may compound your stress and overall debt, causing more problems down the road. Also, when you rent, you aren’t putting money toward eventually owning an asset as with a mortgage toward a house. So, you’re compiling debt without working toward an eventual purchase.
Con #3: Could harm your credit score
If you fail to make your monthly loan payment, you could seriously damage your credit score putting you at risk for further financial hardship.
How to find a personal loan to pay back your rent?
If you’ve come to the conclusion that a personal loan is right for you, then you’ll need to know where to look and find one. Most financial institutions will offer loans and you can shop around for the loan that is right for you. Here are some places you can go to find a personal loan to pay back your rent:
Bank
Credit union
Online banks
Loan comparison websites
Because different places offer different rates on your loan, it’s smart to get several recommendations before taking out a loan.
Other options to pay back your rent
Unsure that a personal loan is right for you? We also have provided several other options to consider when you need money to pay back your rent. Before taking out a loan, you could consider:
1. Talking to your landlord
When you first realize that you may not have the money to pay your rent or if you’ve missed the due date, you’ll want to talk to your landlord immediately. Getting in front of the issue and addressing it openly is always a wise move.
Ask your landlord if he/she is willing to defer rent, offer a payment plan or waive late fees. You never know unless you ask!
2. Borrowing from a friend or family member
Do you have a trusted friend or family member that could loan you money for rent payback? If so, this is a less expensive option compared to getting a personal loan. Sometimes, close family or friends will loan you the money, interest-free, which is always a better option.
3. Call 211
You can the 211 community phone line to get referrals for services, like financial resources. If you’re in a bind, try calling this number and get in touch with local resources that can help with rent relief.
4. Consider a roommate
Imagine your rent payment being cut in half. Would that free up some of your budget? The answer is most likely yes. If you have space, you may consider getting a roommate who can share the cost of rental expenses and save you money, too.
5. Get a side gig
Nowadays, there are several side hustles that you can do from home, after work or at your convenience that pays well and would help your income. If you can get a side hustle that’ll cover the additional money you need for rent, this is a great option because it puts you in control of your money and you don’t need a loan to cover the extra expense of rent paybacks.
6. Reallocate your budget
Sometimes, we spend money on things like coffee, eating out or shopping and don’t realize how much of our budget it’s taking up.
Before you take out a personal loan, take a hard look at your expenses and budget to see where you can trim the fat. If there are areas to cut back on and reallocate expenses to rent payback, do this before taking out a personal loan.
Know your financial options
Now that you understand the pros and cons of loans to pay rent, you can make an informed decision if this is right for you. As always, you may want to consult a financial advisor before making a big decision like this to get professional guidance on what is best for you and your situation.
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.
Sage Singleton is a freelance writer with a passion for literature and words. She enjoys writing articles that will inspire, educate and influence readers. She loves that words have the power to create change and make a positive impact in the world. Some of her work has been featured on LendingTree, Venture Beat, Architectural Digest, Porch.com and Homes.com. In her free time, she loves traveling, reading and learning French.
Thinking about becoming a transcriptionist? In this Transcribe Anywhere Review, I’ll go over whether this course is worth it or not. Transcription is a popular work from home job, and there’s a high demand for transcriptionists. Plus, you can make a good income with a home-based business. On average, a general transcriptionist makes about $45,000…
Thinking about becoming a transcriptionist? In this Transcribe Anywhere Review, I’ll go over whether this course is worth it or not.
Transcription is a popular work from home job, and there’s a high demand for transcriptionists.
Plus, you can make a good income with a home-based business. On average, a general transcriptionist makes about $45,000 per year, while legal transcriptionists can earn around $60,000 annually.
You might have heard of Transcribe Anywhere, a popular course for transcription training. It is self-paced training for both general and legal transcription, along with resources to improve your skills and find transcription jobs.
But, is it a worthwhile investment, and is it a worthwhile course to take?
In this Transcribe Anywhere review, I will go in-depth into the details of the course, talk about what’s included, and help you figure out if you should take this course. I’ll also answer some frequently asked questions and talk about six job alternatives related to transcription.
By the end of this article, you’ll have a clearer understanding of whether Transcribe Anywhere is the right choice for your career goals.
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In this free training, you will learn what transcription is, why it’s a highly in-demand skill, who hires transcriptionists, how to become a transcriptionist, and more.
Recommended reading:
Key Takeaways About Transcribe Anywhere
A transcriptionist turns audio and video files into text documents. They listen to what’s being said and type it up into a text format.
Transcribe Anywhere has in-depth training in general and legal transcription, plus comes with lifetime access.
The courses take around 2 to 6 months to finish – they are self-paced, so you can go as slow or fast as you want.
The courses will help you to improve your transcription skills, find jobs, and start a business.
Transcribe Anywhere Review
What is transcription?
Transcription is the process of converting spoken language into written text. As a transcriptionist, your job is to listen to audio or video recordings and accurately type the spoken words into text format. This freelance job requires good listening skills to accurately transcribe what is being said.
To be successful as a transcriptionist, you will need to be good at spelling, grammar, punctuation, and maintaining focus over time.
There are many types of transcription jobs available, like general, medical, or legal transcription. As a freelance transcriptionist, you can handle different types of projects and serve various clients.
For transcription, you’ll need a computer with word processing software (like Microsoft Word), quality headphones, a foot pedal for playback, and a comfortable chair for long hours at your desk.
You might be curious, can’t a computer automatically transcribe? Well, computers often make many mistakes when transcribing, so having a human do it is more accurate and dependable.
What is Transcribe Anywhere?
Transcribe Anywhere is an online transcription course created by Janet Shaughnessy. This course helps people learn how to transcribe and work from home. They have two main courses: a general transcription course and a legal transcription course. Both courses are very thorough and easy to follow, making them great for beginners.
You’ll get access to many learning resources, such as audio and video files, practice dictations, and quizzes. This makes sure that you understand what it takes to become a successful transcriptionist.
Transcribe Anywhere has a free training workshop so you can learn the basics and decide if transcription is the right career for you.
What’s in Transcribe Anywhere?
Below, I will be talking about what is in Transcribe Anywhere.
Transcribe Anywhere courses
Transcribe Anywhere has two main courses: General Transcription: Theory & Practice and Legal Transcription: Theory & Practice.
These courses have many modules which teach a wide range of topics related to transcription and include videos, tutorials, and practical lessons.
In a section below, I will be talking more about the lessons in each course.
How much does Transcribe Anywhere cost?
If you’re considering investing in the Transcribe Anywhere courses, you’re probably wondering about the price.
Here’s a breakdown:
General Transcription course – $497
Legal Transcription course – $597
General & Legal Transcription Bundle (Both Courses) – $797
Both Courses + Website & Support + Live Access to the Transcribe Anywhere Team – $2,997 (This is more expensive because it includes both courses, transcription equipment (software, headset, and foot pedal), plus a done-for-you professionally designed website).
There are also payment plans where you can split the cost into 4 payments.
Transcribe Anywhere also can be sampled through a free training: FREE Workshop: Is a Career in Transcription Right for You?
Community and support
Transcribe Anywhere comes with a helpful support group where students can engage in discussions and seek advice. You can connect with others who share your interests, providing valuable insights from individuals at different points in their transcription journey. This community serves as a valuable source of motivation, guidance, and career tips.
This community used to be in a Facebook group, but it was recently moved to a new forum dedicated to Transcribe Anywhere.
How to sign up for Transcribe Anywhere
To purchase Transcribe Anywhere, visit their website and choose the course that best suits what you’re looking for. Whether you’re thinking about General Transcription or Legal Transcription, both courses have a thorough curriculum that will help you find transcription jobs.
Here are the links for the two courses:
So, what is the difference between legal transcription and general transcription?
General transcription involves converting audio and video content into written form, and it is used across various industries like academia, marketing, interviews, and films. On the other hand, legal transcription requires the same skills as general transcription, but it also demands expertise in legal terminology and documentation.
Below is more information about each course:
General Transcription course
The General Transcription course is a training course in transcription to give students a versatile skill set for many different industries. The curriculum covers everything from basic transcription knowledge to perfecting skills for accurate transcriptions.
What’s included in this course?
Learn everything you need to know about transcription
How-to’s of transcription and software video tutorials
Video tutorials, worksheets, printable PDF cheat sheets
Tips, tricks, and step-by-step how-to from a 30+ year transcription veteran instructor
How to build and market your transcription business
Final exam and certificate
Inclusion in the Official Graduate Directory (upon passing the final exam)
Lifetime access to the entire course and student community
Here is what is in each module:
Module 1 – Laying the Foundation
The first module of the general transcription course teaches you the basics of becoming a transcriptionist. The lessons included are:
The Right Equipment You Need For the Job
Tools of the Trade
Standard vs. Strict Verbatim
Types of GT Jobs
Formatting a Transcript
Cyber Security
Module 2 – Essential Skills for Excellent Transcription
This module teaches you the correct usage of punctuation, spelling, and more so that you can provide high-quality and accurate transcriptions. The lessons included are:
Parts of Speech
Sentences, Fragments, and Run-ons
Phrases
Clauses
Punctuation Makes Perfect
Punctuation Practice
Spelling: The Lost Art
Transcribing Numbers
Miscellaneous Transcription Conventions
Module 3 – Time-saving Tools for Efficient Transcription
This module teaches you different ways to work faster so that you can make more money. The lessons included are:
Using Text Expanders and Shortcut Keys
Shortcut Keys for the Top 102 Most Frequently Used English Phrases
Spell Check, Search & Replace, Modern Usage Notes
Commonly Used Transcriptionist’s Notes
Using Transcription Templates (includes downloadable templates)
How to Download Practice Transcription Files (video tutorial)
Time Coding
Midterm Exam
Module 4 – Introduction to Practice Dictations
Module 4 is all about practicing your transcription skills. There are several practice lessons along with an answer key so that you can check your work.
Level 1 Practice Dictations: Clear audio in simple, short videos
Level 2 Practice Dictations: Audio-only Files; Non-American English accents
Level 3 Practice Dictations: Transcribing “Strict Verbatim” Style
Level 4 Practice Dictations: Transcribing Multiple Speakers
Level 5 Practice Dictations: Semi-Poor Audio Quality & Research Skills
Level 6 Practice Dictations: Working with Time Codes
Level 7 Practice Dictations: Transcribing Poor Audio with Foreign Accents
Module 5 – Final Exam and Certification of Completion
This is the module where you take the final exam, and it is graded by a human on the Transcribe Anywhere team. You are given feedback as well so that you know what you can improve on. If you pass the exam (you can take it as many times as needed), you are given a Certificate of Completion.
Module 6 – Building Your Business
This module teaches you how to build your transcription business and goes over topics such as:
Income Guidelines and Setting Your Rates
How to Handle Finances and Taxes When Working as a Freelance Transcriptionist
Developing a Business Plan
Marketing and Advertising
Customer Service Essentials
Connecting with Clients
Where to Find Contract Work
Top Business Directories for Local Marketing
How to Find Clients on YouTube
Opportunities for Expanding Your Services
Please click here to learn more about General Transcription: Theory and Practice.
Legal Transcription course
The Legal Transcription course, on the other hand, is tailored for those wanting a specialization. This course dives deep into legal transcription, giving an in-depth understanding of legal terminologies, formats, procedures, etc. Like the General course, this one too is comprehensive; however, it is focused primarily on the legal sector.
Legal transcriptionists are in demand by a range of professionals and organizations, including attorneys, court reporters, academics, insurance companies, and research institutions, among others.
What’s included in this course?
14 full-length training modules
Legal transcription style guide plus downloadable templates of legal forms and documents
Learn the latest advancements in the world of legal transcription
Video tutorials, worksheets, printable PDF cheat sheets
Tips, tricks, and step-by-step how-to from a 30+ year transcription veteran instructor
Marketing how-to/tutorials
Final exam and certificate
Inclusion in the Official Graduate Directory (upon passing the final exam)
Lifetime access to the entire course and student community
BONUS – Transcriptionist Pro Website Theme
Here is what is in each module:
Module 1 – Introduction to Legal Transcription– This module goes over what legal transcription is and goes over the basics.
Module 2 – Tools of the Trade – In this module, software and other tools are discussed. You will learn what equipment you need and where to get it.
Module 3 – Lawyers Litigate; Transcriptionists Punctuate– This module goes over parts of speech, sentences, phrases, punctuation, legal terminology, spelling, and so much more.
Module 4 – Microsoft Word for Legal Transcriptionists – This module teaches students how to notate transcripts, how to use shortcuts to increase typing speed, and more.
Module 5 – Basic Legal Correspondence & Practice Dictation– This module teaches students how to transcribe common documents from lawyers and other legal professionals, such as memos, client consultations, examinations, property deeds, and more.
Module 6 – The Legal Process and Court Procedure– This module helps students better understand the legal process, such as descriptions of types of law, steps in a civil or criminal case, and the anatomy of a court transcript.
Module 7 – Forms and Templates – This module helps students better understand different legal documents that are used in judicial proceedings.
Module 8 – Practice Transcription of Court Proceedings – In this module, students can practice transcribing court proceedings.
Module 9 – Depositions – This module helps students better understand the deposition process. There are also practice audio files that students can work on.
Module 10 – Law Enforcement – Students can practice law enforcement transcripts in this module.
Module 11 – Conferences and Legal Association Meetings – This module is all about how to transcribe legal meetings and conferences.
Module 12 – Time Coding for Legal Transcriptionists – This module teaches students how to transcribe documents that include time stamps.
Module 13 – Resources and Final Exam – This module links to helpful tools and resources such as writing and style guides, legal resources, dictionaries, and more. The final exam is also located in this module.
Please click here to learn more about Legal Transcription: Theory and Practice.
Is Transcribe Anywhere legitimate?
Transcribe Anywhere success stories
Transcribe Anywhere has helped many students start their transcription careers. Many students of Transcribe Anywhere have built successful transcription businesses after completing the course.
Here are some Transcribe Anywhere testimonials:
“I purchased this general transcription training course recently to help me get started in a new career and I couldn’t be happier with my decision. This is an extremely comprehensive course. There’s NOTHING out there like this (believe me, I looked) and it has ALL you need to get started! I highly recommend this course!” – Laura P.
“I took kind of a backward journey to Janet’s course! I started work doing legal transcription several months ago. I took the Transcribe Anywhere course “Legal Transcription: Theory and Practice” as a way to increase my skill set. The course was great! I discovered what I didn’t know, which not only helps me with my current work but also with obtaining my CET certification, which I want to do in the next few months. If anyone is wondering about legal transcription work in general, I can tell you I love it. The work is so interesting to me, and the ability to work from home is wonderful. I have a fairly active family, and I love being able to switch my hours around and work early, late, or weekends if I need to.” – Krista K.
“My husband was recently transferred to another state for work and I cannot join him until my son graduates from high school. This created a financial burden for us as we were going to have a house payment and a rent payment in another state. I needed to generate some income for us quickly but I didn’t want to work outside the home. I began the legal transcription course in April. There were definitely times when I thought I wouldn’t be able to complete the course because it is not easy. However, I knew I needed to do this for my family and I persevered, passing my final exam at the end of July. I began searching for work soon after, and within two weeks was hired on doing government work. Staying the course and completing what I started has allowed me to generate an additional $1600 per month for my family. If you are looking for a reputable course, this is it! Without this course, I would never have been able to work from home and generate this kind of income.” – Tracy R.
You can read more Transcribe Anywhere testimonials here.
Transcribe Anywhere review BBB
Transcribe Anywhere has a positive reputation on BBB with an A+ rating.
Pros and Cons of Transcribe Anywhere
A Transcribe Anywhere review wouldn’t be complete without talking about the pros and cons of Transcribe Anywhere.
Pros:
Well-rounded course material – The courses teach you everything you need to know about starting a transcription business, all from the very beginning.
Focused on building a career – The courses at Transcribe Anywhere are not just about learning transcription. They also help students set up a successful transcription business.
Flexibility – The self-paced nature of the courses at Transcribe Anywhere lets you learn at your own pace. This can be a benefit for those balancing work, family, or other commitments while pursuing the course.
Cons:
Cost – The courses at Transcribe Anywhere are several hundred dollars, which may be a barrier for some people to begin them.
Time commitment – Since Transcribe Anywhere courses teach you everything that you need to know, they do take a decent amount of time to finish at 2 to 6 months.
As you can see, the advantages of Transcribe Anywhere outweigh any potential downsides. The helpful course lessons make it worth the time and cost for many people.
Frequently Asked Questions About Transcribe Anywhere
Below are answers to common questions about Transcribe Anywhere and their courses.
Is Transcribe Anywhere worth it?
Should you take a course to learn transcription if you’re just starting out?
Enrolling in a transcription course can be a good idea for many. This course teaches skills like fast and accurate typing, and how to use transcription software. They can also help you find jobs and kickstart your career.
However, if you’re a quick learner with strong grammar and typing skills, you might find beginner transcription work without needing a course. There are also free resources online, like tutorials and practice tests, to help you get started.
Yet, for specialized and higher-paying transcription jobs, like legal or medical transcription, a course is often necessary.
As long as you’re willing to put in the hard work to master the skill, the courses seem to be worth it.
Who is Transcribe Anywhere for?
Transcribe Anywhere is designed for people looking for a career in transcription or anyone looking to improve their transcription skills. Whether you’re a beginner or an experienced transcriptionist looking to improve your skills, Transcribe Anywhere has helpful training.
How long does Transcribe Anywhere take?
Both the general and legal transcription courses take around 2 to 4 months to finish. The two courses are self-paced, which means you can take as much (or as little!) time as you need to complete them.
Who is Janet Shaughnessy?
Janet Shaughnessy is the founder of Transcribe Anywhere and an experienced transcriptionist. She also runs her own transcription business called Zoom Transcription Services. She created Transcribe Anywhere to teach others the skills needed to become successful transcriptionists and find clients.
How much can a beginner transcriptionist make?
Beginner transcribers’ earnings depend on factors like the company you work for and how fast you can type. Typically, transcriptionists make between $15 to $30 per hour. It’s worth knowing that transcription jobs often pay based on the duration of the audio you’re transcribing. This means that if you have excellent listening and typing skills, you’re likely to complete assignments more quickly, allowing you to make more money. While transcription work won’t make you wealthy, it offers a legitimate way to earn money from home with the flexibility to structure your workweeks.
This is an online typing job that depends a lot on how fast you can type – the faster you can type, the more money you can most likely make.
Recommended: 20+ Best Jobs That Pay $20 An Hour Or More
Is there a free trial or sample course available for Transcribe Anywhere?
Transcribe Anywhere has free training: FREE Workshop: Is a Career in Transcription Right for You?
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In this free training, you will learn what transcription is, why it’s a highly in-demand skill, who hires transcriptionists, how to become a transcriptionist, and more.
Is Transcribe Anywhere accredited?
General and legal transcription programs do not have national accreditation. But, Transcribe Anywhere is recognized as an approved school by the American Association of Electronic Reporters and Transcribers (AAERT).
How does Transcribe Anywhere compare to other transcription courses?
Transcribe Anywhere has received a lot of positive reviews for its very helpful courses and is often said to be the best transcription course out there.
Jobs similar to transcription
In this section, we’ll look at some jobs similar to transcription.
Blogger
Bloggers write content on different topics, such as finance, travel, lifestyle, food, and more. There is a lot of typing involved as a blogger, which is what makes it a little similar to transcribing.
I have been blogging for over 10 years, and it’s my favorite way to work from home. Highly recommend it!
If you are interested in becoming a blogger, I recommend signing up for the How To Start A Blog FREE Course. In this free course, I show you how to create a blog, from the technical side to earning your first income and attracting readers.
Recommended reading: How To Monetize A Blog: How I Grew A $5 Million Blog
Proofreader
If you’re skilled at spotting grammar and punctuation mistakes, proofreading could be an ideal job for you. As a proofreader, your role is to review written material, making sure that it’s free from any grammatical, spelling, or punctuation errors.
If you are interested in finding online proofreading jobs, I recommend signing up for this free 76-minute workshop all about how to start a freelance proofreading business. You can sign up for free here.
Recommended reading: 20 Best Online Proofreading Jobs For Beginners (Earn $40,000+ A Year)
Virtual assistant
A virtual assistant (VA) provides administrative, technical, or creative support to clients from a remote location (such as their home office). VAs may handle emails, schedule appointments, or manage social media accounts.
If you are interested in finding part-time virtual assistant jobs or even full-time ones, I recommend signing up for the free workshop 5 Steps To Become a Virtual Assistant. Here, you will learn how to become a virtual assistant, even if you have no experience.
Recommended reading: Best Ways To Find Virtual Assistant Jobs
Translator
If you are fluent in two or more languages, working as a translator might be a great fit for you. As a translator, you’ll be converting written text from one language to another while preserving the meaning and context.
Freelance writer
Freelance writers write articles, blog posts, ebooks, or even social media content for clients.
Recommended reading: 14 Places To Find Freelance Writing Jobs – (Start With No Experience!)
Bookkeeping
Bookkeepers are responsible for helping businesses take care of their finances, such as by tracking receipts and spending.
If you are interested in finding online bookkeeping jobs, I recommend signing up for this free workshop all about finding a virtual bookkeeping job. Here, you will learn how to start a freelance bookkeeping business. You can sign up for free here.
Recommended reading: Online Bookkeeping Jobs: Learn How To Get Started Today
Transcribe Anywhere Review – Summary
I hope you enjoyed this Transcribe Anywhere review.
If you want to become a transcriptionist, then the two courses sold by Transcribe Anywhere are a great place to start your new career.
Transcribe Anywhere’s courses help you turn your transcription skills into a career. They teach not only transcription but also how to find good-paying clients and run your business successfully.
These courses benefit anyone seeking a flexible remote job. Whether you’re a mom wanting to work while your kids are at school, a retiree wanting to boost your income, or a digital nomad looking for a reliable source of income on the move, Transcribe Anywhere can help you reach your goal.
A great free resource is FREE Workshop: Is a Career in Transcription Right for You? You’ll learn what transcription is and why it’s a highly in-demand skill, who hires transcriptionists, what it takes to become one, and more.
Do you want to become a transcriptionist? Do you have other questions for this Transcribe Anywhere Review?
Shopping for a mortgage has never been easier, thanks to the array of online options. Brick and mortar lenders may still be a viable option, but you may find that an online lender has even more to offer.
Furthermore, exploring online mortgage lenders allows you to compare mortgage rates. You can also receive customized mortgage loan offers in your inbox in minutes. Even better, you’ll have direct access to a loan officer in case you have questions.
Who are the top online mortgage lenders for 2023?
If you’re in the market for a new home and ready to start your search for online lenders, here are some reputable options to choose from.
Best Online Mortgage Lenders of 2023
loanDepot
loanDepot is an online lender, but don’t think that means they are lacking in customer service. They provide over 150 loan stores across the country for customers that prefer in-person service.
The lender is a suitable option for anyone who wants to take out a mortgage with the assistance of a loan officer.
loanDepot offers various mortgage products, including fixed and adjustable-rate mortgages. You can also apply for jumbo loans, VA loans, and FHA loans. You’ll need a minimum credit score of 620 to qualify for a mortgage.
loanDepot ranks high in customer satisfaction and most buyers seem to have a good experience working with them. However, they do charge higher fees than other mortgage lenders.
Quicken Loans
This online lender takes the hassle out of securing a mortgage by letting you complete the entire process online.
You’ll need to provide a few key details about your finances using this form to get started. A Home Loan Expert will review your application and contact you to discuss loan options.
And no need to worry about getting overwhelmed. Quicken Loans offers online tools to help you understand loan options and the home buying process. Plus, the customer service is excellent; a live representative is always standing by.
You can also upload all your documents and monitor the status of your application directly from the portal. This means you never have to pick up the phone if you don’t want to.
And when you’re ready to close, you have the option to schedule the closing when it’s convenient for you.
Better.com
If you’re looking for an online mortgage lender, you should check out Better.com. The company uses technology to simplify the lending process for its customers. Better.com promises a fast and transparent mortgage experience.
The lender is willing to work with all different kinds of buyers, including individuals who are self-employed or have unique job situations.
At least a third of its mortgages are taken out by first-time homebuyers, and over 70% of all buyers pay a down payment that is less than 20%.
Better.com mortgages don’t come with any hidden fees; there are no application or origination fees. To get started, you can visit the company’s website and get pre-approved in just a few minutes.
Rocket Mortgage by Quicken Loans
Rocket Mortgage is a division of Quicken Loans. Their key competitive advantage is the asset importer tool, which takes the guesswork out of determining whether you’re approved.
Instead of uploading documents, importing them from the information provider guarantees the accuracy of the numbers and allows you to receive loan offers using real-time interest rates in a matter of minutes.
And once you’ve selected a loan that works for you or created a custom option, you’ll be able to close in record time. Plus, Rocket Mortgage customer service experts are standing by to assist with questions you may have every step of the way.
NBKC Bank
NBKC Bank is not as widely known as many of the other lenders on this list. But that doesn’t mean you should rule them out as a potential mortgage lender.
There are several features that make the Kansas City-based lender a great option. The bank promises fast home closings and provides exceptional customer service.
NBKC Bank focuses mostly on online mortgages and offers its customers competitive interest rates. It does have several brick-and-mortar locations but focuses mostly on processing online mortgages.
You’ll need a minimum credit score of 620 to qualify for a mortgage, so this is a suitable option for borrowers with fair credit. NBKC Bank offers various mortgage products, as well as personal accounts. This makes them a great option for anyone looking for a full-service lender.
Guaranteed Rate
You can apply for a mortgage in a matter of minutes from the homepage of this digital mortgage provider’s site.
All you have to do is answer a few questions about your desired home, credit, and finances to receive a comprehensive listing of loan types and interest rates you may qualify for.
Guaranteed Rate has plenty of no-down-payment loan options like VA loans and USDA loans. They also offer a knowledge center to help you understand mortgages and how the process works.
Once you decide on a mortgage product that best suits your needs, you’ll work directly with a loan expert to upload and sign documents and finalize the loan. If you prefer to meet with a loan expert, there are 170 Guaranteed Rate branches across the United States.
Truist
Truist is known for its brick-and-mortar presence, but they also have an impressive online mortgage platform. Available in English and Spanish, Truist mortgage offers an array of mortgage solutions to choose from.
You can initiate the application process online or directly from your mobile device through the SMARTGUIDE tool.
You can also call 877-907-1020 to speak with a loan officer or chat online from the website. Or if you wish to meet with a loan officer, use the locator tool to find a Truist branch near you.
You can also take advantage of their Doctor Loan program if you’re a medical professional and meet select income criteria.
SoFi Mortgage
SoFi mortgage is another online lender that stands out from the masses. Although they don’t offer government-backed home loans, SoFi mortgage has programs that require a down payment as low as 10 percent, and they do not assess mortgage insurance.
Customers also enjoy a seamless prequalification and application process, along with no origination fees. Even better, it may be possible to close on your loan in under 30 days.
Penny Mac
If you’re searching for flexibility, Penny Mac may be the ideal lender for you. They offer several options to consumers of varying financial backgrounds. To date, they’ve served over 1 million customers and funded over $5 billion in loans in 2017, alone.
You can request a no-obligation free quote online, chat with an expert, or call (888)870-6229 to get started.
Reali
Crediful’s rating
Reali caters to consumers looking to purchase or refinance their homes. Through their Interactive Loan Dashboard, you can apply, upload any documents needed, and track your loan’s progress at the tap of a fingertip.
You’ll also have access to a Home Loan Advisor 24/7 to address any concerns you may have. And because of their streamlined process and low fees, you can expect to close in record time without spending a fortune.
Unfortunately, Reali does not offer government-backed products, like FHA loans, USDA loans, and VA loans.
This can be a turnoff to first-time, credit-challenged, or cash-strapped buyers.
Another major drawback is that they only operate in Arizona, California, Colorado, Florida, Georgia, Illinois, Michigan, Oregon, Pennsylvania, Texas, Virginia, and Washington.
The good news is they plan to expand their offerings to more states soon.
Pros and Cons of Online Mortgage Lenders
The rise of the internet has revolutionized many industries, and the mortgage industry is no exception. Online mortgage lenders have steadily been gaining a more substantial market share due to their distinct advantages. However, as with anything, they come with their own set of disadvantages. Here, we break down the pros and cons of opting for an online mortgage lender.
Pros of Online Mortgage Lenders
1. Lower Costs: Operating primarily online, these lenders often have fewer overhead costs compared to traditional brick and mortar lenders. This can translate into competitive mortgage rates and lower lender fees, making online mortgage lenders potentially cheaper.
2. Convenience: The ability to initiate and complete the entire application process online is a significant advantage. You don’t have to schedule meetings with a loan officer or travel to a bank branch. Instead, you can apply anytime, anywhere, which fits well with busy schedules and modern, on-the-go lifestyles.
3. Range of Loan Products: Online mortgage lenders often offer a broad range of loan products, including FHA and VA loans, USDA loans for rural properties, conventional loans, and jumbo mortgages. These lenders often cater to a diverse demographic, meaning whether you’re a first-time homebuyer seeking down payment assistance, a veteran, or someone with less-than-perfect credit, you can often find an online mortgage product that suits your needs.
Cons of Online Mortgage Lenders
1. Technological Hurdles: Not everyone is tech-savvy. If you’re not comfortable navigating online platforms or don’t have reliable internet access, you may find the online mortgage process daunting. The learning curve associated with digital platforms can be a deterrent for some people.
2. Lack of Personal Interaction: Some people prefer a high-touch, personalized service when dealing with significant transactions like buying a home. With online lenders, face-to-face interaction is usually minimal or non-existent, which can be a downside for those who prefer a more traditional approach to their financial transactions.
3. Negotiability of Fees: While online mortgage lenders are often cheaper, certain costs like origination fees and closing costs may not be as negotiable as they could be with a traditional lender. Also, mortgage insurance may still be required for government-backed loans, like FHA or VA loans, and the requirements for jumbo loans may be stricter.
4. Trustworthiness: The online space can be a breeding ground for scams and unscrupulous practices. Not all online mortgage lenders are trustworthy, making it crucial to do your homework. It’s important to research each online lender thoroughly, checking their reputation, reading customer reviews, and ensuring they are registered with appropriate financial oversight institutions.
Despite these potential downsides, many homebuyers find that the convenience, competitive rates, and the ability to shop around from multiple lenders offered by online mortgage lenders outweigh the cons. But the best online mortgage lender for you ultimately depends on your personal finance needs, comfort level with technology, and unique home loan situation.
Factors to Consider when Choosing an Online Mortgage Lender
Finding the right online mortgage lender for your home-buying journey involves more than just hunting for the lowest interest rate. You need to consider a variety of factors, from loan types to the speed of loan processing. Here’s a breakdown of what to look for:
Interest Rates
As a prospective borrower, interest rates are often one of your first considerations. The interest rate can significantly influence your monthly mortgage payment and the total cost of your loan. Due to their lower overhead costs, online mortgage lenders often advertise competitive rates. However, it’s essential to compare rates across different lenders to ensure you’re getting the best deal.
Fees and Hidden Charges
While interest rates play a crucial role in determining your loan cost, it’s equally important to consider fees and potential hidden charges. This could include origination fees, appraisal fees, closing costs, and other service charges. Some lenders may also charge additional fees for rate locks or early repayments. Always ask for a comprehensive cost breakdown and be wary of lenders who are not transparent about their charges.
Loan Types
Each online mortgage lender may offer a variety of loan types, such as FHA loans, VA loans, conventional loans, and more. Depending on your personal circumstances and needs, you might need specific loan products like USDA loans for rural properties, FHA or VA loans for a low down payment, or jumbo loans for larger properties. Ensure that the lender you choose caters to the type of loan that suits your situation best.
Customer Service and Support
Excellent customer service is crucial when dealing with online lenders as your primary communication methods will be via phone, email, or online chats. Lenders who offer high-quality customer service can significantly streamline the mortgage process, making it less stressful for you. Consider checking customer reviews and ratings for insights into a lender’s customer support.
Speed of Loan Processing
The time it takes for online mortgage lenders to process your loan application and close your loan can vary. If you’re working within a specific timeframe, you may prefer a lender known for quick processing. This is particularly crucial in competitive real estate markets, where being able to close swiftly could make all the difference.
Pre-approval Process
A seamless pre-approval process can signify an efficient online mortgage lender. Pre-approval offers you a rough estimate of how much you can borrow and helps you stand out in competitive property markets. Seek lenders that provide easy pre-approvals, preferably with only a soft credit check to avoid impacting your credit score.
User-friendly Technology
With most of your interaction with online lenders taking place digitally, user-friendly technology becomes paramount. Consider factors such as the simplicity of the application process, online document upload functionality, digital signature capabilities, and the ease of online loan tracking. A lender with a robust, intuitive platform can significantly simplify your online mortgage process.
Tips for Applying for a Mortgage Online
Embarking on the journey of applying for a mortgage online can feel overwhelming, especially if it’s your first time. But don’t worry – we’ve got some helpful tips to guide you through the process.
How to Prepare
Before you start your online mortgage application, it’s important to get your financial house in order. Here’s how:
Check your credit score: Your credit score is one of the main factors that lenders consider when evaluating your loan application. Make sure to check your credit reports for any errors and dispute them if needed. If your score is low, you might want to consider improving it before applying for a mortgage.
Verify your income: You will need to provide proof of income, so gather your recent pay stubs, W-2s, or tax returns. If you’re self-employed, you may need to provide additional documentation, like bank statements or profit and loss statements.
Get your documents in order: Apart from income verification, you’ll need other documentation, like identification, proof of assets, and information about your debts. Having these documents ready can speed up the application process.
Navigating the Application Process
Once you’re ready to apply, keep the following in mind:
Understand the terms: Make sure you understand the terms of the mortgage, like the interest rate, whether it’s fixed or adjustable, the length of the loan, and any fees involved.
Use online tools: Many online lenders offer useful tools like mortgage calculators. These can help you understand what your monthly payments might be based on different interest rates and down payment amounts.
Stay organized: Keep track of where you are in the application process. Most online platforms will save your progress, but it’s good to have your own record too.
Questions to Ask Your Lender
Securing a mortgage can often feel like a daunting process, particularly when applying online. To navigate this path with more confidence, it’s crucial to arm yourself with the right questions when engaging with potential lenders. The responses to these questions will not only give you a clearer idea about the mortgage terms but also about the lender’s transparency and commitment to customer service.
What types of loans do you offer?
The world of mortgages encompasses a variety of loan types designed to cater to different borrower needs. This includes conventional loans, government-backed loans such as FHA, VA, and USDA loans, and jumbo loans for larger mortgages.
Understanding the unique benefits and requirements of each type is important. For example, FHA loans may be suitable for those with lower credit scores, while VA loans are primarily designed for veterans. Your potential lender should be able to provide a comprehensive explanation of each option and help guide you towards the loan type that best fits your unique situation.
What are the interest rates and APR?
While the interest rate of a loan often takes center stage, the Annual Percentage Rate (APR) should not be overlooked. The APR provides a more comprehensive measure of cost as it includes the interest rate, lender fees, and other loan charges, offering a more complete picture of the long-term cost of the loan.
What fees are involved?
Beyond the interest rate, mortgages often involve several other fees that can impact the overall cost of the loan. These include origination fees, appraisal fees, home inspection fees, and potentially prepayment penalties. Some lenders may even charge for rate locks, which secure your interest rate for a specified period. It’s critical to ask for a detailed breakdown of all fees involved to ensure that there are no hidden costs that might surprise you down the line.
What Is the estimated timeline for approval and closing?
Mortgage approval and closing timelines can vary greatly among different lenders. Knowing the expected timeline can be crucial, especially if you’re working with a specific move-in date. In a competitive real estate market, a quick approval and closing process could make all the difference when multiple offers are being considered.
What are your minimum credit score and down payment requirements?
Understanding a lender’s minimum credit score and down payment requirements can help you gauge your chances of approval. These requirements can vary greatly depending on the loan type and the individual lender’s policies.
Do you consider alternative credit data?
For those with a limited credit history, some lenders may consider alternative credit data such as utility bill payments or rent payment history. Asking about these possibilities could potentially help you qualify for a loan even with less conventional credit information.
What is your process for loan servicing?
Understanding whether the lender will service your loan or if they intend to sell it to another company is important. If they plan to sell it, knowing who your point of contact would be for any issues or inquiries is crucial.
Bottom Line
Choosing an online mortgage lender is a significant decision that can impact your financial situation for years to come. Therefore, it’s critical to take the time to carefully evaluate each lender. From comparing interest rates to analyzing the type of customer service they offer, there are many factors to consider in this selection process.
We’ve touched upon some of the best online mortgage lenders available today. These lenders were chosen based on their competitive rates, comprehensive loan options, excellent customer service, and user-friendly platforms. However, remember that the “best” lender will vary depending on individual circumstances, and the top choices for others might not be the best for you.
While online mortgage lenders offer convenience and often competitive rates, they also come with their unique set of challenges. It’s vital to remember that transparency, trustworthiness, and a clear understanding of the terms and conditions are paramount in any financial decision, including choosing a mortgage lender.
We encourage you to conduct your own research and take advantage of online tools and resources that many of these lenders offer. Shopping around and comparing multiple lenders will help you find the best mortgage fit for your specific needs.
Remember, a mortgage is a long-term commitment. The time and effort spent in making a careful, well-researched decision now will pay dividends over the life of your loan. Happy home hunting!
Rent prices are on the rise, with the average cost increasing 18% between 2017 and 2022. But buying a home requires a hefty down payment and good credit. Renting to own your home can give you the best of both worlds, but there are some downsides.
If you’re thinking about signing a rent-to-own agreement, it’s important to weigh the pros/cons of rent-to-own home deals. Here’s what you need to know before you sign on the dotted line.
What are rent-to-own homes?
When you own a home, part of your monthly payments goes toward paying off the principal. If you stay in the home long enough, you’ll own it.
The same doesn’t apply to rentals. Your monthly rent solely covers your costs of living in that home, whether it’s a condo, apartment, townhouse, or single-family house.
A rent-to-own home lets you pay rent to live on the property, with the option to buy it when the lease runs out. In some cases, a portion of your rent goes toward the purchase price, but that isn’t always the case.
How does rent-to-own work?
A rent-to-own agreement is essentially a lease agreement with an option to buy. Rent-to-own contracts should be read thoroughly. Those options can vary from one contract to another.
When you sign a rent-to-own contract, you pay an upfront fee called an option fee. This is typically 1 to 5% of the home’s purchase price, and it’s non-refundable.
It’s important to note that a lease does not relieve you of the requirements to buy a house. You’ll still have to qualify for a mortgage and make a down payment. It’s merely a way to buy yourself some time and possibly put some of your rent toward the purchase price of a home.
Lease Option vs. Lease Purchase
Before you sign, pay close attention to the lease agreement you’re signing. There are two types, and one contractually obligates you to buy the property.
Lease Option Agreement
A lease option agreement is the best deal of the two for you, the buyer. You’re signing a lease option contract that merely gives you first rights to the house when the lease is up. If you change your mind, find a better deal, or can’t qualify for a mortgage, you can find somewhere else to live and move your belongings out.
Since the option fee is nonrefundable, it’s important to note that you will lose money if you choose not to buy. Calculate this loss when you’re deciding whether to buy.
Lease Purchase Agreement
Unlike a lease option agreement, lease purchase agreements obligate you to buy at the end of the lease. Since it’s a contract, that means you’re legally obligated to purchase the house.
This can be risky for a couple of reasons. Once you’re in the house, you may see issues you didn’t notice when you were first touring the house. Things could change with the neighborhood or your circumstances that you couldn’t know at the outset.
But the biggest issue with a lease purchase contract could simply be that you aren’t eligible for a mortgage to buy the house. Make sure you know, up front, what penalties or liabilities you’ll face if you can’t buy the house when your lease is up.
Even though both agreements operate differently on your end, they do obligate the seller to give you the option to buy when your lease expires. This puts you in a position to own a home at a predetermined future date, giving you the opportunity to start planning.
Length of a Rent-to-Own Agreement
Rent-to-own contracts start with a lease period that can be up to five years but is usually less than three. The thought is that the rental period will give a renter time to qualify for a mortgage. During this time, you’ll work on building your credit, if necessary, and saving for a down payment.
In some cases, a rent-to-own arrangement could have renewal terms. That means if you reach the end of the lease and want more time, you can extend the lease. With this option, though, the property owner could increase your monthly rent or the purchase price.
Preparing for Homebuying
During your lease term, you’ll make each monthly rent payment in exchange for remaining in the house. But it’s important during that time that you work toward purchasing the house when your time is up. Here are some things to do to boost your chances of landing a mortgage once your lease expires.
Boost Your Credit Score
Your rent-to-own deal requires that you qualify for a mortgage once the term is up. To do this, you will need to meet the minimum credit score requirements. You can get a free copy of your credit report each year at AnnualCreditReport.com, but there are also credit monitoring services that can help you stay on top of things.
Although requirements can vary from one lender to the next, Experian cites the following credit scores as necessary to land a mortgage:
FHA: If you qualify, a Federal Housing Association loan will accept credit scores as low as 500.
USDA loans: Those who meet the requirements can qualify with a score as low as 580.
Conventional loan: Generally 620 or higher, but some lenders require 660 at minimum.
VA loans: Eligible military community members and their families can obtain loans with scores as low as 620.
Jumbo loan: These loans cover houses at a higher price, so you’ll need a score of at least 700.
Save for a Down Payment
In addition to a good credit score, you’ll need to put some money down on your new home. Down payment requirements vary by loan type, but it’s recommended that you put at least 20% down. That means if you’re buying a $200,000 home, you’ll need at least $40,000 by closing.
There are lower down payment options, but if you choose those, your mortgage payments will include something called private mortgage insurance. This will increase your monthly payment by $30 to $70 per $100,000 borrowed.
If you can’t save up 20%, you may qualify for an FHA loan, which requires as little as 3.5% down. Both VA and USDA loans have zero down payment options, and there are programs offering down payment assistance to those who qualify.
The best part about rent-to-own properties, though, is that some come with rent credits. With a rent credit, a percentage of your rent will go toward your required down payment. Calculate in advance how much you’ll have in that escrow account at the end of your lease to make sure you save enough to supplement it.
What are the pros of rent-to-own?
Rent-to-own homes can be a great option, especially during a tight housing market. If there’s a house you want to buy, but you can’t make a down payment or your credit isn’t where it should be, it could be a great workaround. Here are some of the biggest benefits of rent-to-own agreements.
Rent May Go Toward Purchase Price
Depending on the terms of the rental agreement, renting to own could help you work toward paying for the home. Instead of the full amount of your rent being pocketed by a landlord, a percentage of your rent could go toward the eventual purchase price. Before signing, pay attention to rent credits and try to negotiate the best deal possible.
The Purchase Price Is Locked In
When a landlord agrees to a lease option, the home’s purchase price is written into the contract. That price will typically be higher than what the market says it’s currently worth. This means if the U.S. housing market sees an unexpected increase, you’ll be buying the home for less than its value. Even if the market dips, once you purchase the house and remain there for a few years, you may be able to sell it at a profit.
You’ll Buy Extra Time
For many renters, the rent-to-own period provides time to qualify for a mortgage. If you’ve researched all the options and found you’re close but not quite there yet, a rental period could be just what you need.
Before you choose this option, though, take a look at your circumstances. If substantial existing debt and poor credit mean you won’t qualify, you may need more than the few years you’ll get with a rent-to-own agreement.
No Moving Necessary
Let’s face it. Moving can be a pain. You have to pack everything up, line up a moving truck and get help moving, and unpack your items once you’re in the new location.
With a rent-to-own agreement in place, you skip the hassle of moving. You’ve already been in that home, making monthly rent payments, for at least a couple of years. You’ll simply go through the closing process and switch from rent payments to mortgage payments.
What are the cons of rent-to-own?
If you can get a mortgage, that’s always going to be a better option than renting or leasing to own. But there are some instances where renting without the buy option could be better for you. Here are some things to consider.
Rent-to-Own Home Maintenance
Before you sign any lease agreement, it’s important to read the fine print. One thing to note, specific to own agreements, is who will be responsible for maintenance during the rent-to-own period. If you rent without the promise of eventual ownership, your landlord will take care of those costs. In some cases, rent-to-own agreements require the renter to handle all repairs.
But there’s an upside to handling repairs on your own. To your landlord, the property is technically yours. That means you likely will give it more TLC. Still, it’s well worth it to pay for a home inspection before you agree to a rent-to-own agreement. This will identify any serious issues that will need to be addressed before you buy.
Option Fee
One distinguishing feature of a rent-to-own property is the option fee. This is usually between 1 and 5% of the purchase price and is non-refundable. That means if you don’t ultimately qualify for a mortgage, you’ll lose that money.
Home Values Could Drop
Property values aren’t guaranteed. Your landlord estimates the value of the property, but if you’re in a rising market, you might get that home at a steal. While that’s good news for you, the reverse can happen. If housing prices drop substantially during that time frame, you could find yourself buying a property for more than it’s worth.
Contract Breaches Can Be Costly
Rental agreements are a legal obligation. If you don’t pay your rent, your landlord can evict you and keep your security deposit. But rent-to-own contracts bring an additional level of risk. Missed payments mean you could be evicted and lose all the money you’ve put in. That includes the upfront fee and any rent credit you’ve earned.
All that money will also be lost if you can’t qualify for a mortgage when your rental time is up. These agreements can give you some breathing room. However, if your low credit scores, income, lack of a down payment, or employment situation make you ineligible for a mortgage, you could be searching for another rental while losing everything you’ve paid on the lease-to-own home.
Steps to Buy a Rent-to-Own Home
Once you’ve decided renting to own is the route you want to take, you may wonder what to do next. The following steps can help you ensure you get the best deal in a rent-to-own agreement.
1. Find a Home
This is more challenging than it might sound, especially if you’re looking in a competitive real estate market. Rent-to-own homes are extremely rare, so you may have to find a home for sale and try to negotiate this type of setup.
Typically, homeowners become renters when they can’t sell their homes. This means your rent-to-own contract might be on a home that’s in a less desirable or convenient area of town. For someone whose home has been on the market for a while, being able to collect rent money with the promise of a sale in a few years can be a huge relief.
For best results, find a real estate agent who can help you track down a home and negotiate with the seller. The National Association of REALTORS® maintains a directory of real estate agents, but you can also ask for a referral or find real estate agents nearby who have brokered these types of deals recently.
2. Research the Home
Even if it’s tough to find a lease-to-own home in your area, don’t snatch up the first one you find. Crunch the numbers to make sure the rent and purchase price make financial sense for you. Look at the sale history of the home to verify that the owner’s estimated purchase price is somewhat within what the median home price will likely be when your lease expires.
3. Research the Seller
The seller needs to be looked into as well. This is even more important with rent-to-own agreements since this person will be your landlord for the entire lease period. If you see any red flags during your interactions with the seller, move on.
4. Choose the Right Terms
Before you make a real estate purchase, you would have a closing attorney review the documents. The same goes for a rent-to-own agreement. Run all the paperwork past a real estate attorney to make sure there’s nothing in the contract that will hurt you in the long run.
Your real estate agent should be able to negotiate the best terms for you, including how each rent credit will help you build equity and what happens at the end of the lease.
5. Get a Property Inspection
Any time you make a home purchase, it’s essential to know what you’re buying. The same is true for rent-to-own properties. A home inspector can check things out and make sure you aren’t purchasing a home with serious issues.
6. Start Preparing to Buy
Once you start making rent payments, it’s time to start preparing for your eventual home purchase. Chances are, you’ll have to make a sizable down payment on a home loan, so plan to have that ready. Also, keep an eye on your score with all three credit bureaus and make sure you’ll qualify.
A rent-to-own contract can be a good deal for both the buyer and the seller. It can give you time to save money and improve your credit score. A real estate lawyer should take a look at your contracts and make sure your best interests are protected.
Bottom Line
Rent-to-own homes present a unique option for potential homeowners. This approach offers the opportunity to enter the homeownership arena at a slower pace, allowing individuals to build credit, save for a down payment, and experience living in the home before making a final purchase decision.
However, the rent-to-own path isn’t free from drawbacks. Potential buyers should be wary of unfavorable terms, higher monthly payments, and the risk of losing money if they decide not to buy. Ultimately, like all significant decisions in life, choosing a rent-to-own option requires careful consideration and thorough research.
Frequently Asked Questions
Where can I find rent-to-own houses?
Rent-to-own houses can be found through specialized websites dedicated to these types of listings, local real estate agents familiar with the concept, or sometimes through classified advertisements in local newspapers or online platforms.
Can I find rent-to-own homes on Zillow?
Yes, Zillow does list rent-to-own homes. When searching for properties, you can filter the search results to show only rent-to-own options. However, availability may vary based on the region and market conditions.
How long is the typical rent-to-own contract?
The typical lease term ranges from one to five years, but terms can vary based on the agreement between the homeowner and tenant.
Do I have to buy the house at the end of the lease?
No, the decision to buy is optional. However, if you decide not to purchase, you may lose any upfront fees or additional monthly amounts set aside for the potential purchase.
Can the seller change the purchase price once set?
Generally, the purchase price is fixed in the initial agreement. However, some contracts may have clauses allowing price adjustments based on market conditions.
What happens if the property value decreases during the lease period?
If the home’s value decreases and you’ve agreed on a set purchase price, you could end up paying more than the current market value. It’s crucial to negotiate terms that protect your interests.
Who is responsible for repairs and maintenance?
The agreement should clearly outline these responsibilities. In most cases, the tenant bears the responsibility for maintenance and repairs during the lease term.
What’s the benefit of a rent-to-own agreement for sellers?
Sellers can generate rental income while waiting to sell, often at a premium. It also widens the pool of potential buyers, especially those who need time to improve their credit or save for a down payment.
How do property taxes work in a rent-to-own agreement?
In a rent-to-own scenario, the property taxes are typically the responsibility of the homeowner, as they still retain ownership of the property during the rental period. However, the specific arrangement can vary based on the terms of the agreement.
Some contracts may stipulate that the tenant pays the property taxes directly or reimburses the homeowner. It’s crucial for both parties to clearly understand and agree upon who will cover the property tax obligation before entering into a rent-to-own contract.
If I don’t buy, do I get a refund for the extra money paid?
Typically, the extra money paid above regular rent, often referred to as “rent premium,” is forfeited if you decide not to buy.
Is the rent in a rent-to-own agreement higher than usual?
Often, yes. A portion of the monthly rent may be used for the potential down payment or purchase price, making it higher than the average rent for similar properties.
What’s the difference between rent-to-own and mortgage?
Rent-to-own is an agreement where a tenant rents a property with the option to buy it at the end of the lease. No bank is involved initially, and the tenant isn’t obligated to buy. A mortgage, on the other hand, is a loan specifically for purchasing a property. The buyer borrows money from a bank or lender and agrees to pay it back with interest over a predetermined period.
Does rent-to-own hurt your credit?
A rent-to-own agreement, in itself, doesn’t usually affect your credit. However, if the homeowner reports late payments to credit bureaus, it could hurt your credit score. On the positive side, consistently paying on time and eventually securing a mortgage can benefit your credit.
What is another name for rent-to-own?
Rent-to-own agreements can go by various names, including:
Lease to purchase
Lease option
Rent-to-buy
Rent-to-purchase option
Lease purchase
Each of these terms represents the concept of renting a property with the potential option to buy it after a set period.
You can get an apartment with bad credit, but it may take some strategizing. Apartment applicants with low credit scores can boost their odds by applying with a cosigner, paying more upfront, offering references, or changing the type of units they apply to.
In today’s housing market, you want every possible advantage on a rental application. While letters of recommendation and a solid rental history will get you far, more and more landlords want a high credit score. As a result, it isn’t uncommon to ask if you can get an apartment with bad credit.
While it takes some strategizing, you can get an apartment with low credit. To help you along, we’ll explain how credit impacts your application, explain steps you can take to compensate for low credit, and share tips on boosting your score.
How Credit Impacts Getting Approved for an Apartment
Many landlords and renters run a credit check as part of their rental application process. Like lenders, landlords check your credit to see if you can pay your bills on time. Because renting is an investment, property owners want to minimize risk. So, they assume tenants with high credit are more likely to pay their bills on time.
Remember that your credit score isn’t the only factor on a rental application. While a high score helps, the details on your credit report matter, too. How you got a high or low score can sway property managers one way or the other.
What Credit Score Do You Need to Rent an Apartment?
The score you need depends on the unit. Some rental companies provide an ideal range for their listings. A score of 620 or higher will generally keep landlords from denying your rental application. However, some landlords will expect more, while others don’t look at your score at all.
What Do Landlords Look for on a Credit Report?
Renters may treat your credit score like a headline, but there’s more to a credit report than a number. Credit reports tell a story about your spending habits and income. To help landlords pick reliable tenants, a rental credit check includes:
Rental history: Some landlords report rent payments to credit bureaus. As a result, evictions, broken leases, and late or missing payments may appear.
Employment history: Current or past employers may show up on a credit report. Typically, they only appear if you listed them on a credit card application or loan.
Payment history: Credit reports show your history of payments to lenders. Late or missing payments will lower your score and work against your rental application.
Debts: Current and past debts show up on your credit report. By providing payslips, landlords can calculate your debt-to-income ratio. If you make enough to repay your debts responsibly, that improves your application.
Delinquent or collections accounts: An account is delinquent if you miss a payment due date. If you miss enough payments for lenders to transfer your account to a collection agency or sell it to a debt buyer, it becomes a collections account. Both of these hurt your credit score.
Bankruptcy status: Bankruptcy filings will affect your credit score. Landlords may take recent bankruptcies as a sign that you’re a high-risk tenant.
Derogatory remarks: These remarks refer to negative items on your credit report. They include auto repossessions or foreclosures. They hurt your score and hamper a rental application.
Landlords gauge the risk they pose by looking at how applicants spend their money. Someone with a high income but a history of late payments may not make the cut. On the other hand, someone who filed for bankruptcy years ago may be more responsible now.
How to Get an Apartment with Bad Credit
While a low score sets you back, you can learn how to get approved for an apartment with low credit. By following these methods, you can get a leg up in rental applications:
Make an Upfront Payment
Putting down more money upfront can give you an edge on rental applications. Landlords will usually request a security deposit or the first and last month’s rent upfront. To sway a landlord’s opinion, offer the first three months’ rent or put down a higher security deposit.
At the end of the day, renting is an investment. If you can show your landlord that you’ll give them a reliable ROI, it’s all the more likely they’ll accept you. As a bonus, paying more in advance saves you a financial burden for the next few months.
Find a Guarantor or Cosigner for Your Apartment
If a landlord can’t trust you to make payments, you can get someone to sign your lease with you. Someone with a great credit score who signs on with you can assuage a property manager’s worries. However, remember that the person who helps you takes on financial risk. You have two options for this approach:
Cosignerssign a rental agreement with you and share the financial responsibility for it. They must do so on your behalf if you can’t or won’t pay rent.
Guarantors share cosigners’ responsibilities, but they have fewer rights. More specifically, they vouch for you and can make payments on your behalf. However, they aren’t entitled to reside in your unit.
Offer References and Supporting Documents
While credit reports outline your financial history, you aren’t the sum of your spending decisions. You can offer other documents to show your responsibility in an apartment application. Additionally, these documents can prove you can pay rent each month. Some examples of supporting documents include:
Payslips: Offer pay stubs that show you make enough money to pay rent each month.
Letters of recommendation: Reference letters from a friend or employer can attest to your character and responsibility.
Proof of reliable rental history: Account statements and landlord testimonials can prove you always pay rent on time.
A snapshot of your savings account: If all else fails, you can show landlords you have the money to make rent. Be sure to censor sensitive information on your snapshot.
Utility payments: A history of on-time utility payments shows your trustworthiness.
Find Apartments to Rent with No Credit Check
While credit checks are common, not all landlords require one. While these properties aren’t the most competitive, that isn’t always a problem. Apartments with no credit check tend to cost less than ones with one.
If you’re looking for another option, some landlords advertise units with low credit requirements. Again, these properties set a low credit requirement for a reason. That said, if you inspect the unit and it looks good, this route can save you a headache. As you live in low-credit apartments, you can build your score for future applications.
Adjust Your Expectations
If you can’t get around a credit check, reassess the kinds of apartments you can apply for. This isn’t to say you should only apply to units in poor condition. Instead, consider what you’re willing to compromise on. You may have an easier time qualifying for an apartment:
Farther away from your work or downtown area
Without amenities like a gym or pool
That doesn’t include parking
With less square footage than you’d prefer
If you apply with a roommate
Bear in mind that compromising on these points means the apartment may cost less. While living in a less-than-ideal unit, you can save and rebuild your credit while renting. When it comes time to look for a new apartment, you’ll have better odds of getting the one you want.
Tips to Raise Your Credit Before Renting an Apartment
If you plan to send rental applications down the line, you should work to improve your credit. Bear in mind that increasing your credit score takes time. To see a major change, expect months or even a year of work. In that time, follow these tips to improve your credit:
Pay Your Bills on Time
A person’s payment history can make or break their credit score. Central to that payment history: whether you paid your bills on time. Making timely and consistent payments plays a big role in improving your credit score. On top of that, timely payments prove your reliability to a landlord, boosting your chance of getting approved.
Pay Down Any Debt
Paying down debts is one of the best ways to improve your credit score. For this reason, someone who takes on and pays off debt won’t get punished for the debt they take on. Paying off debts shows your fiscal responsibility and proves your finances are on an upward trajectory.
Paying off any kind of debt can improve your score. The main ones to look out for include:
Credit card debt
Student loans
Medical debt
Auto loans
Become an Authorized User for Credit Piggybacking
If you don’t have the resources to boost your credit alone, you can try credit piggybacking. Credit piggybacking lets you benefit from a friend or family member who pays down their debts. By becoming an authorized user on their account, your credit report reflects their payoffs.
You can break the process into a few steps:
Find a friend or family member you trust to spend responsibly.
Become an authorized user on one of their credit cards or lines of credit.
As they pay down their debts, this will show up on your credit report.
By piggybacking on their credit payoffs, your score will improve.
Dispute Credit Report Errors
Sometimes, a low credit score isn’t your fault. Credit reporting errors can come from major credit reporting agencies or the companies giving them information. Credit reporting errors aren’t uncommon, so you should review your report for issues.
Credit reports may contain errors related to:
Accounts held by another person with a similar name to you
Accounts opened by fraudsters who committed identity theft
Closed accounts that still read as open
Accounts incorrectly labeled as delinquent or in collections
Payments that don’t get reflected in your report
Multiple listings of the same debt
Accounts with inaccurate balances or credit limits
To dispute credit report errors, contact the credit bureaus and the company that reported inaccurate information to them. You want to provide supporting documentation that proves the report contains errors. While you can send a dispute by phone, this doesn’t leave a paper trail. Instead, mail a dispute letter or use an online form.
FAQs on Renting an Apartment with Bad Credit
You may still have questions about getting approved for an apartment. To help you out, we’ve answered FAQs on renting apartments with bad credit.
Is 500 a High Enough Credit Score for an Apartment?
You can rent an apartment with a credit score of 500. While it might take you out of the running for expensive units, you should still have a good chance of renting:
Apartments with low credit requirements
Apartments with no credit requirements
Apartments you apply to with a cosigner or roommate.
Can I Reapply for an Apartment After I Get Denied for Bad Credit?
You can apply for the same apartment after getting denied on your first attempt. That said, some renters may throw out your application or ignore it. If you reapply, try to improve your credit and finances between applications.
Do Landlords Need Permission to Run a Credit Check?
Landlords need your permission to run a credit check. The Fair Credit Reporting Act calls rental applications a “permissible purpose.” This gives them the right to view your credit. However, that doesn’t mean landlords can check your score without your consent.
Improve Your Credit for an Apartment with Credit.com
Managing apartment applications is hard enough, even without a low credit score. However, you can get an apartment with bad credit by following the right steps. You’ll see more housing opportunities by learning how credit works, reviewing strategies for getting an apartment with low credit, and following tips to boost your score.
If you’d like a way to streamline raising your credit for rental applications, Credit.com can help. Our rent and utility reporting services ensure that your on-time payment gets reflected on your report. Even if your landlord doesn’t report payments, our tool helps build your credit with every rent payment reported.
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.
Many people with good credit scores own at least one credit card, with 82% of all credit card holders boasting credit scores of 680 and higher.
When used responsibly, credit cards can be a great tool for building credit. Here’s a complete guide on how to build credit with a credit card.
Table of contents:
5 Best Ways to Build Credit with a Credit Card
To improve your credit score with a credit card, you need to know how to best use your credit card. Responsible credit card usage is key to boosting your credit—it won’t increase simply because you got a credit card. Here are the five best ways to increase your credit score using a credit card.
1. Pay bills on time
One of the most important parts of having a credit card is paying your credit card bill on time. Payment history is the largest factor in your FICO® score at 35%, which means it can make or break your score.
Get into the habit of paying your bills on time every month and watch your score grow. Setting up automatic payments for a few days before your bill is due can help make sure you never miss a payment and give a cushion of time for the payment to go through.
2. Keep your utilization rate low
Your credit utilization rate, or credit utilization ratio, is the amount of credit you’re using divided by the amount of credit available to you (your credit limit).
Let’s say your credit limit is $500. This is the maximum amount you can spend on your credit card before payments are denied, but that doesn’t mean you should spend that much.
It’s best for your credit score to keep your utilization rate under 30%—under 10% is even better! This is because the amount of money you owe impacts 30% of your FICO score and the lower this number is, the better. But how much can you actually spend with your credit card?
If your credit limit is $500, 30% of that is $150. So, you should aim to never have a balance over $150 on your credit card. Even better, shoot for a balance under $50 (10% of your limit).
3. Don’t overspend
You don’t need to carry a balance on your credit card to improve your credit score. Paying off your balance in full every time, not just making the minimum payment, is the best practice.
Carrying a balance can cost you more in credit card interest and late fees. Plus, it may increase your utilization rate and damage your credit score. Do your best to avoid credit card debt and treat your credit card like a debit card—only spending money you have.
4. Use your card regularly
Using your first credit card requires a delicate balance. You don’t want to spend too much and go over your utilization rate, but if you don’t use it regularly enough, the lender may close your account. Using some of your available credit is one of the best ways to boost your credit.
The solution is to use your card to make regular, small purchases. This could include purchases like:
Gas
Groceries
Small, recurring bills
Inexpensive meals
After a while of making these regular purchases and paying them off on time, your credit card provider will probably increase your credit limit, allowing you to spend more with your card. Until then, using your card for these types of purchases can help you establish responsible credit card habits and keep your credit utilization low.
5. Avoid opening more cards
Every time you apply for a new credit card, the creditor makes a hard inquiry on your credit, which drops your credit score a few points. You’ll be able to earn back those points in the long run, but in most cases, if you apply to a bunch of credit cards at once, those hard inquiries will add up and take a toll on your credit.
For this reason, you should only apply for one credit card at a time and make sure it’s a good match for you. When you’re first building your credit, it’s best to start small with one card and take your time to practice building credit with it before opening more accounts.
How to Use Credit Cards to Start Building Credit
To recap, here’s a step-by-step guide to increasing your credit score with your first credit card.
Apply for a credit card you can qualify for.
Connect your bank account for automatic monthly payments.
Make small purchases to use under 30% of your credit limit (under 10% is better).
Pay your balance in full and on time each month.
Avoid opening new credit cards.
Regularly monitor your credit report.
If you’re not sure what kind of credit card to apply for, here are the types of credit cards you can use to start building credit and the advantages of each.
Unsecured credit card: An unsecured credit card, or standard credit card, is great if you qualify for one. They don’t require a deposit to use and often offer rewards.
Secured credit card: This type of card is great if you can’t get approved for a standard credit card. Secured cards require a deposit but then they work like any other credit card.
Student credit card: If you’re a student, it’s typically easier to qualify for a student card than a standard credit card. These cards can have decent rewards too!
Store credit card: Store credit cards can sometimes be easier to qualify for than standard cards. Be sure to choose one for a store you shop at often or can be used at other places besides the specific store.
Authorized user for a credit card: A family member or friend can add you as an authorized user on their credit card. You’ll be able to make purchases and receive credit score benefits but won’t be responsible for charges.
How to Build Credit without a Credit Card
If you’re not ready for a credit card or can’t get approved for one, here are some ways to build credit without a credit card.
Credit-builder loans
Credit-builder loans are a lot like what they sound like. They’re low-interest rate loans that help borrowers with poor or no credit build credit, and they function differently than your typical loan.
With a standard loan, you receive the money you’re borrowing upfront, but with a credit builder loan, the money is held in a savings or CD account until you pay it off. This makes it very low-risk for the lender, as your payments are also adding your collateral to the savings account.
You make monthly payments, including interest on the loan, and making these payments on time will help build your credit. Once you pay off the loan, you get all the money back and in some cases, interest if it was incurred while your savings collateral was being held.
Rent reporting
The three major credit bureaus, Equifax®, Experian® and TransUnion®, only include rent payment information on your credit report if they receive it. Most landlords don’t report this information, but it could benefit your score if you consistently pay your rent on time.
You can ask your landlord to report your rent payments or find a rent reporting service that will let you submit the information yourself. Ideally, your rent payments should be reported to all three bureaus for maximum impact.
Passbook loans
This type of loan is very similar to credit-builder loans, except it uses the money you already have in your savings or CD account as collateral. Interest rates for passbook or CD loans are typically lower than credit cards or personal loans.
Like credit-builder loans, you build credit as you make payments on the loan each month and can access the money once you’ve paid it off. Check that your bank will report your payments to all three credit bureaus before taking out this type of loan.
Building Credit with a Credit Card FAQ
Have more questions about how to use a credit card to build credit? Check out the answers to these common credit card questions.
When should you pay your credit card bill to build credit?
You should pay your credit card bill by its due date, at the very least. Paying your bill early (before the end of your billing period) or making extra payments if you’re planning to carry a balance may help boost your credit score even more since it will reduce your utilization rate.
How fast does a credit card build credit?
While it may take a while to build credit, you can help establish a baseline credit score if you have an account open and active for 6 to 12 months, to allow your FICO® score to be calculated. You may be able to establish a baseline credit score after 6-12 months of making credit card payments on time. With consistent and responsible credit card usage, you should see a positive impact on your credit over time.
Do you need a credit card to build credit?
No, you don’t need a credit card to build credit. Responsible credit card usage is one of the easiest ways to build credit, but it may not be the right answer for everyone. There are other ways to improve your credit score, like taking out loans, reporting rent and utilities or being added as an authorized user to someone else’s credit card.
A credit card is a great way to start building credit. If you’re looking for more ways to boost your credit score, check out our resources on Credit.com and the features included with ExtraCredit. ExtraCredit is a full- credit score monitoring service that can help you understand what areas of your credit you need to work on to build and maintain your good credit.
If you’re shopping around for your first home, congratulations! Few things in life are more exhilarating than strolling through houses and imagining yourself living in a new neighborhood as a bona fide homeowner.
To prepare for serious real estate hunting, though, you should be armed with a firm price range in mind. How much house can your really afford? Most experts recommend that your monthly mortgage payment not exceed 28 percent of your monthly pre-tax income.
For example, if you bring home $3,600 per month in wages, your mortgage payment should be no more than $1,008 per month. Any more than that, and you’re likely to have trouble making your payments at some point.
Can You Really Afford the Payment?
The 28 percent figure sounds great on paper, but will it work in your life? The best way to find out is by conducting a financial experiment while you shop for a house and get pre-approved for a loan. Follow these steps to see if you’re ready to take on a mortgage payment.
1. Choose a Fantasy House to Buy
No, you’re not (necessarily) going to buy this house, but go online to a real estate site like Zillow or Redfin and find one you like for a price you think you can afford. Make note of the total price as well as the yearly property taxes.
2. Research Mortgage and Insurance Rates
If you’ve already started the pre-approval process for a home loan, you may already have an idea of the interest rates available to you. If not, go online to find your local bank’s current mortgage rates.
If you have good credit, use the rate you see advertised. If your credit is shaky, add a percentage point to the rate to be more realistic about the type of mortgage you’ll be able to get.
You also can go online for an insurance quote for your fantasy house. Just type in the address and answer the questions about the property based on the information you found on Zillow or Redfin.
Most new home buyers pay for their insurance through their lender’s escrow accounts, so this is important in calculating an accurate monthly mortgage payment.
3. Use an Online Mortgage Calculator to Find Your Monthly Payment
Using your research about the home price, taxes, mortgage rates and insurance costs, type the values into an online mortgage calculator to find out your monthly payment.
If the calculator doesn’t ask for insurance or taxes, you’ll need to add those values together yourself, divided by 12, and add that number to the monthly mortgage payment to be sure you’re covering everything.
4. Live With Your Fantasy Mortgage for at Least Three Months
Test out life with a mortgage by paying yourself each month. To do this, subtract your rent payment from the total of your fantasy mortgage payment. This amount is the money you’ll be transferring into a savings account each time you pay the rent.
After three months of living with your fantasy mortgage, assess how well you did. Were you able to make payments easily, or did you have to bail on the experiment? Did life go on as planned, or were you stuck with ramen noodles for dinner? If an emergency came up, could you handle it?
If you could live comfortably with your fantasy mortgage, you can afford the house you “bought” and should feel comfortable shopping for a real house in that price range. If not, you can try again with a lower mortgage amount.
Either way, the beauty of this experiment is that you are able to build up an additional nest egg of savings by paying yourself, and that’s something that will only help you with your eventual down payment on your dream house.
Whether you’re moving out of your parent’s house or leaving the dorm life behind, becoming a first-time apartment renter is a big and exciting step. However, if you don’t know the ins and outs of the rental process, the task can seem overwhelming. Luckily, we at Redfin put together a list of 8 key tips to help first-time renters find their perfect first apartment and make the transition as smooth as possible. Whether you’re renting an apartment in Los Angeles, CA, or in Brooklyn, NY, these tips will be invaluable in your journey to securing the ideal rental space.
1. Your budget needs to cover more than just rent
If you’re a first-time apartment renter, knowing how to budget for your first apartment is crucial. Your monthly rent will, of course, be the most considerable expense you need to account for, but there are other one-time and ongoing fees that you should be able to pay. Let’s take a look at these costs more closely.
Initial, one-time costs
Before moving into your new apartment, you should save enough money to pay for the following upfront costs:
Recurring costs
Once you’ve moved into your first apartment, there are several ongoing expenses you’ll need to cover every month:
Rent
Utilities, such as electricity, garbage, water, sewage, etc.
Internet and phone
Parking
Laundry
As a first-time apartment renter, this might be the first time you’re responsible for these types of expenses. The last thing you want to do is misjudge what you can afford because you forgot to factor in these essential components of your cost of living.
2. Make a list of needs, then prioritize them
Start with your dream apartment – what is your ultimate living situation? While you may not end up with everything on your list, it’s essential to understand what you value in your home. Some common needs for first-time apartment renters are:
Functional kitchen
Balcony, patio, or other private outdoor space
Closet and storage space
Proximity to work, nightlife, dog parks, or other amenities
Natural light and direction of exposure
Air conditioning
Building amenities, such as a gym, rooftop, or business center
Once you have your list, prioritize the items from most to least important. This will help you narrow down your choices and choose between similar properties.
3. Ask a lot of questions during apartment tours
There are some things you just need to know when you’re shopping for apartments. You may direct these questions to your prospective landlord, or you might have to do some research on your own. Here is a list of must-ask questions, but you may choose to add others depending on your needs.
How much is the rent?
Are utilities included? If not, how much do they usually cost?
How much is the security deposit?
How do I pay rent and utilities?
Is there a parking fee?
Is the apartment pet-friendly, and if so, what are the associated fees?
Are any deposits or fees refunded at the end of the lease?
Do I need proof of renters insurance?
What’s the application process, and is there a fee?
How long is the lease term?
How often does rent increase and by how much?
What alterations can I make to my apartment?
How is apartment maintenance dealt with?
Is there a property manager?
Am I responsible for any maintenance?
What amenities are available nearby?
Are there any particular policies I should know about?
These questions are just the beginning. You likely have special needs or preferences that should inspire additional questions. Keep a list of these questions with you when touring, along with a way of recording the answers.
4. Know the rental application requirements
Each apartment will have a different rental process. Generally, your process will include some or all of the following:
Fill out an apartment application
Show proof of income
Complete a credit check
Complete a background check
Provide rental history with the landlord’s contact information or a personal reference
Add a co-signer if you have a low credit score or no credit history
Include an optional cover letter
To show proof of income, you’ll likely need to provide your most recent pay stubs. You can also use an offer letter or letter from your employer if you’re moving for work. Many landlords or property management companies want to see that you have a reliable monthly income appropriate for the rent payment. While it depends on the apartment, there is often an income requirement that the renter needs to make 2 to 3 times the monthly rent amount.
5. Clarify the parking situation
Some rentals come with a designated parking area or parking spot(s). If you plan to live with a roommate and you both have cars, are there enough parking spaces to easily accommodate both of you? When there are not enough parking spaces or tandem parking, roommates will often switch off week to week or find another acceptable compromise. If the apartment complex does have parking spaces, be sure to ask if this comes at an additional cost. Parking fees are becoming increasingly common at rental properties.
On the other hand, many apartments don’t come with parking, especially in bigger cities like New York City or San Francisco. In this case, pay close attention to the street parking. The street parking signs will tell you which days or times of day parking is limited or prohibited (usually for street-sweeping or snow plowing). But you should also note how many parking spaces are free on your street— is there plenty of room or are cars packed bumper to bumper? Streets with cars parked close together usually mean that parking is difficult to find.
6. Know the best time of year to rent an apartment
You can’t always control when you need to move, but if you do have flexibility, choosing the right time of year to rent an apartment could have a large impact. If your main concern is price, you’ll want to look for an apartment during the winter months. Typically, most people move in the summer months (college students moving away from home, etc.), so demand and prices are typically highest during this time and lowest in the winter. Keep in mind that while rent prices may be lower, there might not be a large selection of apartment complexes with availability.
On the other hand, if your ideal apartment is your top priority, then moving during the summer may be a better option. Most renters sign 12-month leases in the summer. Therefore, most leases usually also end around that time. This means the highest number of new apartments are coming on the market, so you’ll have plenty of options to choose from. The main downside here is that rent prices will typically be higher, and you’ll need to act fast before the best apartments are off the market.
7. Thoroughly read and understand the lease agreement
As a first-time apartment renter, reviewing your lease agreement is one of the most important steps to getting your apartment. Though the lease may contain complex language, it will outline the most important agreements you’re making by signing it. Here are a few things you should make a note of:
The length of your lease
The pet policy and any special terms (like additional fees)
Deposit requirements and how your deposit is returned
Sub-letting rules
Utility responsibilities
Maintenance procedures
Liens or claims to your property if you don’t pay rent
When in doubt, having your lease reviewed by a landlord-tenant attorney is a great idea. The attorney will be able to catch any illegal provisions, explain how provisions work, point out unfavorable provisions and their consequences, and suggest changes that provide you with a more favorable lease.
8. Get renters insurance
In many cases, carrying renters insurance may be required by your landlord, especially if you’re a first-time apartment renter. Even if it isn’t, it’s still a good idea to have it – regardless of if you’re a long-time tenant or a first-time apartment renter. A renters insurance policy protects you in three significant ways:
Personal property protection: If someone steals, damages, or destroys your personal belongings, you will receive a payout (minus the deductible).
Personal liability: If someone gets hurt in your home, renters insurance will pay for medical bills and lost wages, depending on the terms of your policy. You may also be covered if you end up in a lawsuit.
Loss of use: If your apartment becomes uninhabitable, loss of use coverage pays for your expenses, up to coverage limits, while you live outside your home.
Always be sure to review your policy carefully. It’s a good idea to create an inventory of your personal belongings so that you both have a record of what you own and ensure your coverage limits are high enough to protect you in the event of a total loss. If you are unsure about any part of your insurance policy, speak with your agent.
A final note on renting your first apartment
Searching and finding a perfect apartment rental requires some diligence, patience, and preparation. By following these tips, you can avoid possible pitfalls and make your apartment hunting process as seamless as possible, especially if you’re a first-time apartment renter.
This again points to the fact that renting is here to stay and could, in the foreseeable future, take up a greater footprint. Currently about 44 million U.S. households, or about 36%, are renters.
A hedge against a downturn
And therein lies the opportunity: to assist with all types of housing needs, including rentals. Many real estate agents may shy away from working with landlords and renters. But incorporating this large market segment into their business models creates a hedge against a downturn in the sales market, particularly at a time when the average rent in the U.S. stands at $2,053, up from $1,580 four years ago.
This makes rentals even more appealing for agents as commissions are usually based on the rent price. Data shows that the estimated annual rental commission potential in the U.S. totals $30 billion when taking the total number of rentals, average rents, and commissions into consideration.
But rental commissions are only part of the story. Helping a landlord or renter can create loyalty and a lifelong client. Many renters will eventually move toward purchasing a house, considering that 95% still desire to purchase a home. Agents who work with rentals will be best-served in nurturing clients before other agents even enter the picture.
Once renters are ready to purchase a home, they are likely to turn to people they know, like, and trust. Forward-thinking real estate agents can play a pivotal part in a renter’s journey by providing guidance on topics such as affordability or even rent payment reporting to boost credit scores.
Agents who seize rental opportunities can make income where others cannot and in the process will create loyal clients they can help for years to come, regardless of mortgage rate fluctuations.
Michael Lucarelli is the CEO and co-founder of RentSpree.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
To contact the author of this story: Michael Lucarelli at [email protected]
To contact the editor responsible for this story: Tracey Velt at [email protected]
