We’ve talked before about the difference in value between renting and buying a home. But for some people, trying to think long-term about these decisions isn’t an option at the moment. Before even considering buying a house, many people still have to rent a home or apartment while they set aside saving to one day purchase a home of their own.
If this is your first venture into a rental lease agreement, there are a few things you should know. We’re in the business of saving money, and with these nine tidbits in mind, you can be, too.
Learn the Fair Market Rent
Known shorthand as FMR, the fair market rent is the gross amount of rent including utilities (except telephone) one can expect to pay to rent privately owned, existing, safe, sanitary housing. Officially, FMR is established by the Dept. of Housing and Urban Development, but unofficially, you can use FMR to determine whether your potential property is listed at a fair price.
Hop over to RentData.org to look up the FMR by zip code, or make some side-by-side comparison to similar properties in the area. It’s apples to oranges, though; one property with better amenities might out-price a unit with the same number of bedrooms and square footage.
However, if a property appears to be listed unjustifiably high, you may be able to use that as a bargaining tool for lower rent.
Prepare for a Background Check
If you have any loose ends left untied from your past, it’s best to get your business squared away prior to your background check—otherwise, you might be out the cost of an application fee in the event your negative report disqualifies you. At the very least, you can expect a tenant screening report that reflects your credit history and your ability to meet your financial obligations. If you’re applying to more than one place, see if you can produce and submit a copy your own recent credit report to help save money on application fees.
Negotiate Lease Terms
Many renters are not aware that they actually have the power to negotiate some terms within their lease contract. For example, say your lease is scheduled to begin on Jan. 1, but you can’t move in until late January; you may be able to request a 1/15 move-in date with a pro-rated rent.
Use the Share Economy
While you’re reading up on your lease agreement, see if it says anything about subletting. Without restrictions, you may be able to take advantage of the share economy and sublet your apartment short-term through sites like Airbnb, VRBO, or FlipKey. Be careful, though; most leases have some sort of subletting provision, and even if it doesn’t, your local legislation might ban short-term rentals altogether. Evictions and fees will cost you much more than you’d earn from a weekend’s rent!
Get Used to the Paint
As a renter, there are many things you won’t be able to change or modify. If you want to do something like change the color of paint on the walls, it’s best to ask for permission beforehand in order to avoid costly chunks taken out of your security deposit.
Save on Utilities & Other Small Necessities
If your rental lease does not include utilities with the cost of rent, get clever on ways to save! You can reduce your water bill with a meter or cut back on electricity costs using services like OhmConnect. Apart from that, there are other household chores that you can save on, like dishwashing or laundry!
Pay Rent Online
We encourage you to try and pay rent online! For one, it’s one of the best ways to make dealing with your finances easier—just set your automated rent payment and forget about it. Secondly, it’ll help you save money in the end by preventing any late fees on past-due bills.
Hire Your Own Cleaning Service
When it comes time to move out of your rental home or apartment, talk to your landlord about hiring your own cleaning crew. Chances are that at least part of your security deposit will be withheld for negligible repairs, but hiring a cheaper cleaning service than what he or she would forcefully charge could mean less upfront costs and more money back in your pocket.
Consider Buying Instead
Our last piece of advice: think about investing in a property before signing a lease contract. There’s pros and cons to buying a home, but if you when you think of rental payments as payments towards somebody else’s mortgage, it’s less of a debate.
Arm yourself with these nine tips — plus all your frugal practices! — and you’ll be well on your way to a happy tenancy.