5 pointers for the first-time renter
My son just graduated from college. He’s staying with us, but he recently accepted a job offer, and is planning to look for his own place soon. Of course I want him to become an independent adult (and I have plans to convert his old room into a painting studio), but I also worry. He’s never lived on his own. Frankly, it’s been decades since I rented. What can I tell him before he signs a lease so he doesn’t get himself in financial trouble or get taken advantage of by an unscrupulous landlord?
—Sally, Dover, Del.
It sounds like your son is on the right track. College diploma: check. First job: check. The next big step—a place of his own, with all the bills that go with it—can’t be taken lightly. You’re right to worry that a young adult who’s never had to pay rent by the first of every month might find it challenging at first. Here are five tips to help ensure his new experience in his own home is a good one—and that you won’t have to pack up your artist’s easel when he comes back to live in his old room.
- Come up with a housing budget. Your kid might be picturing cathedral ceilings and a Jacuzzi, so the first thing to do is bring him down to earth. Before he hits Craigslist or Zillow (both good places to look for listings), he needs to figure out how much he can afford. This means making a rough budget. He might need to be reminded about expenses (like commuting, utilities, and a full month’s worth of groceries) that he’s not used to accounting for. An old rule of thumb is that you shouldn’t spend more than about 30% of your income on rent. This isn’t written in stone, but it’s a good starting point. If your kid can’t swing an apartment on his own, he may want to consider a roommate.
- Don’t cosign lightly. This is more a tip for you than for your kid. My strong advice when it comes to credit cards and loans is not to cosign for your kid. But you might feel differently when it comes to an apartment lease since your kid needs a place to live and could have a hard time finding one as a first-time renter with a thin credit history. (Other options: Pay a higher security deposit, give references who can vouch for his creditworthiness, find an individual landlord, rather than a faceless corporation, who will work with him, or show that he has plenty of money deposited in the bank.) Only consider cosigning a lease if you’re dead certain you could cover your kid’s rent if he can’t. Just know that cosigning means your kid’s landlord could name both of you in a lawsuit for rent arrears, if it came to that.
- Try to negotiate. Renters are reluctant to do this, but if it works, your kid will be thanking himself every month. If he zeroes in on an apartment with rent higher than his monthly budget allows, he should tell the landlord he’s interested but hadn’t planned to spend what’s being asked. In a courteous way, he should ask if he can pay, say, $50 less a month, or get one month free, or even a desirable repair, like refinishing the damaged wood floor. If he has a good credit score and a steady job, there’s a chance the landlord will consider the reduction. If your kid arrives at an open house and people are perched in windowsills and doorways filling out rental applications, odds are good the landlord won’t be game. But if he tours a place that’s been on the market for a while, and maybe notices that the grass is a little long in the yard, the landlord may jump at the chance to have a good renter, even if it means offering a slight discount. It will also help if your kid knows what average rents are in your area—which should be easy if he’s been scrolling through apartment listings.
- Read the fine print on the lease. It’s tempting to skip to the signature page. Your son shouldn’t. He needs to look for provisions that seem unfair or could even be illegal, like charging exorbitant fees for a late rent payment. Other things to get clear upfront: Is subletting allowed? (If so, it needs to be written into the lease.) What happens if your son needs to get out of the lease early? Is he the only person who can live in the apartment? (If he’s planning to have roommates, their names should be on the lease, too, so he isn’t left holding the bag if they skip out.) Are pets allowed? Can his landlord enter the apartment without advance warning? What utilities are included, and which will he have to pay himself? To find out the rules for tenants and landlords in your area, he should visit the website of the state or county housing office or office of consumer affairs.
- Protect your security deposit. The money your kid gives as a security deposit—often, one or two months’ rent—can be a sore point if a landlord keeps a big chunk when your kid moves out. This money is meant to cover damage a renter does, not regular wear and tear. If something breaks while he’s living in a rental, he should report it immediately and request a repair, so it isn’t counted at the end as “damage.” Also, your kid should snap pictures of the apartment both before he moves in and after he moves out, to show the condition of the place in case the landlord tries to blame him for something he didn’t do. Finally, consider renters insurance. For a relatively low cost, a policy insures your kid’s stuff, provides some liability protection both inside and away from home, and covers basic living expenses for a time if his apartment becomes unlivable.