One of the basic needs of any family is having a place to live. If you are fortunate enough you may be able to buy or rent a home.
Unfortunately, not everyone is able to do this. Not to worry there are plenty of nice apartments out there that you can rent for a somewhat reasonable price.
However, just like buying a house there are certain things you should do and know before you pick a particular apartment and sign a lease. I will discuss these below.
Some renters require a good credit score
If you are applying to rent an apartment because you don’t have a good enough credit score to get a home owner’s loan don’t be surprised if you get turned down by some apartment complexes because your credit score is too low.
Although some complexes are concerned about you credit score (they see this as an indication as how well you will be able to afford the rent), there are some that will let those with low credit scores who are unemployed, retired, etc. rent from them.
It is a good idea to order your credit report in advance to know where you stand. Most apartment complexes consider a score of 680 or better to be good and will be willing to rent to you.
If your score is somewhat low you might want to see if you can bring it up before you attempt to rent an apartment.
Don’t rent to improve you credit score
Some people, when they get turned down for a mortgage loan because their credit score is too low, go out and rent with the misconception that this will improve their FICO Score.
Although your landlord is a creditor and you are required to pay them on time, they are not required to report these payments to the credit agencies, so no matter how prompt and how long you have been paying rent, this may not have an effect on your credit score.
So just be informed that renting will do nothing for your credit score. If you are trying to raise your credit score a car loan or credit card will help you do this.
Joint applicants and cosigners
Often, when applying to rent an apartment, your sole income will not be enough so you get someone else to sign the lease with you, in most cases your significant other.
This increases the likelihood that you will get approved because the lessee will take both incomes into consideration when deciding whether to rent to you.
If your spouse is signing with you, you will do this as cosigners. Sometimes if there are two single mothers or fathers wanting to share a house they can do this as joint applicants which will also increase you chance of getting approved.
Beware however, that it can be extremely difficult to get this additional person off the lease if you split up or part ways. You won’t be able to remove this person until the lease is up.
Rent can and probably will increase
Although you may have found an apartment you can afford, you need to make sure you will be able to afford it when the rent goes up in the next years.
You need to know that rent prices are not set in stone and are most likely to go up based on one of two ways.
This will vary based on which complex you end up choosing but this is when you live in income based housing.
Because your rent is based on a certain percentage of your income the landlord might ask you for your W-2 form every year to see if your rent needs to be adjusted.
If you make more you will pay a higher rent, and if you make less or are unemployed you will pay even less. If you make too much you may not qualify for the apartment.
Periodic rent increases
When you sign a lease it is usually only for a year and thus only guarantees the rent only for that year. If you have rented before you will plan for the increase.
If you are new to the renting scene you need to be aware of this so you don’t get surprised and end up with financial problems because you did not plan on it.
The best thing to do if you are planning on renting is to get an apartment that is somewhat below your budget; this way you will be able to afford the rent increase the following year.