What to Consider Before Signing Your First Lease
So the time has finally come to sign your first lease! This is an exciting step towards independence. The following tips will help you make a more informed decision and ensure you end up with the best rental property for your needs.
So the time has finally come to sign your first lease! This is an exciting step towards independence.
A lease should clearly lay out the terms of a rental agreement and provide protection to both the tenant and the landlord. Given it’s the first time you will be signing a lease, you might have a few questions. How can I get the best deal on rent? Which property is right for us? What other considerations should I take into account? The following tips will help you make a more informed decision and ensure you end up with the best rental property for your needs.
6 Things to Do Before You Sign:
Come up with a budget
Before starting your search, having a clear picture of what you can afford is essential. Create a monthly budget that you know will be feasible to spend on rent, and use that as a guideline when searching for properties. Remember, renting isn’t an investment. You will never recoup any money spent on rent like you would when purchasing a home. Instead, consider something smaller or a bit under-budget to help mitigate monthly expenses and save up for other investments.
Research the area
Particularly when moving to a new neighborhood or city, you will want to familiarize yourself with the area. You might not fully understand the area’s dynamics from just one or two visits. Is it safe at night? If you have kids, what are the public schools like? Is it noisy? Is public transportation easily accessible? Is there a lot of nightlife? Is it a younger or older crowd? You might love the house, but it's important to understand what the complex or neighborhood is like to see if it matches your lifestyle. The last thing you want is to be stuck living somewhere you feel uncomfortable or unsafe in.
Read over the entire lease
Before signing anything, understand fully what you’re agreeing to. Leases, like any legal document, are not a friendly or easy read, so make sure to actually look over all the fine print before signing. You might find some unexpected terms you don’t agree with which you will want to discuss and negotiate. Some leases have strict rules on guests or the extent to which the unit can be personalized, any of which may be deal-breakers for you. After discussing terms of the lease with the landlord, you will need to ensure that any conditions discussed have been appropriately incorporated into the contract or some other form of official documentation. Even if you’ve come to a verbal agreement over something, it must be in writing to be enforceable.
Everything is negotiable! Many landlords use a standard lease that isn’t necessarily catered towards the specifications of the property, so feel free to suggest changes as you see fit. You can try negotiating the length of the lease, resigning terms, additional amenities, a larger unit, price, and so on. It is important to address concerns and negotiate upfront, as trying to secure those terms after signing will be much more difficult.
Look into renter’s insurance
Should your rental house burn down or a storm floods the basement, damages to your personal belongings won’t be covered by your landlord’s insurance. Renter's insurance will provide coverage for your items should incidents of damage or theft occur. Many policies also cover liability protection and additional living expenses. Some landlords require renter’s insurance, but in the event yours doesn’t, you may still want to consider it. When doing so, make sure to explore different insurance providers and understand the varying prices and levels of coverage.
Document the condition of the unit
Before moving in, make sure to document and photograph any damages to the unit. This will help you get your security deposit back at the end of the lease. You can also consider leveraging faults or damages before signing the contract as a means to negotiate better terms for your lease.
6 Questions to Ask Your Landlord:
How much am I paying?
Aside from rent, there are often additional costs associated with signing a lease. These include a security deposit, application fee, background check, and so on. As such, getting a solid idea of what these incremental costs are is important before signing. Ask the landlord to provide those costs upfront to make sure you don't end up spending above your budget.
What am I paying for?
Be sure to ask what's included in the rent to better understand what exactly you are paying for. Does the rent include utilities? Is parking included, or is that a separate cost? If your move-in date is halfway through the month, is your rent prorated, or do you still have to pay for the full month? Ask who's responsible for landscaping. Get a full idea of what amenities you have access to, such as washer/dryer units, a gym, or a pool. Knowing what’s included and what isn’t helps you better understand what your true monthly expenses will be, a key factor when comparing different rental properties.
Can I have pets?
If you have a pet, make sure to ask about your landlord’s policy. Some allow them with no strings attached, while others might require a pet deposit/monthly fee, or they could simply prohibit them altogether. Pets can be a liability; they can damage the property or cause disruptive noise. As such, it’s important to fully understand your landlord’s policy should you have a pet. (Learn the difference between service animals and pets)
How are maintenance requests handled?
Especially if you are renting a house, ensure it contains clear guidelines on how maintenance requests should be submitted. It should clarify who is responsible for different types of repairs, maintenance, and replacements. Also, include a timeframe within which the landlord must comply with said request to keep them accountable.
What’s the early cancelation policy?
You might need to end your lease early due to an unexpected situation such as job loss, divorce, military deployment, or work relocation. Or, you might simply decide that you no longer like the property or neighborhood. Make sure you understand and negotiate a fair early cancellation policy to help keep you covered should you want to terminate the lease. You might be required to pay a month or two in rent as a penalty fee or to pay rent until the landlord finds new tenants. Understand the costs that might be associated, how far in advance you must notify your landlord, the time of the month you will be allowed to move, and any other requirements.
Can I sublease?
Should an unexpected situation arise where you need to move out before your lease is up, having the option to sublease could be a huge lifesaver. Make sure to ask about subletting policies and procedures should that be allowed. If not, you could try negotiating that upfront as part of your rental agreement.
Before you enter into this next chapter, it’s good to take a step back and ensure you’re making a fully informed decision. Do the legwork, and ask the questions. Following these guidelines before you commit will better protect you from any unexpected hiccups throughout your occupancy and set you up with the best possible rental property.