8 Things Nearly All First-Time Renters Get Wrong
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Looking to rent an apartment? Join the club! Applications for rental units returned to pre-pandemic levels by the end of 2021, with applications up 13% from the previous year. And the largest spike in active apartment hunters is among Gen Z renters (up 39%)—many of whom were entering the rental market for the first time.
But with all this newbie renting, there are bound to be mistakes made along the way, especially while navigating the seismic shifts in a COVID-19-altered real estate market.
To help, here are some of the things that today’s rookie renters often get wrong that can cost them, big-time. Peruse this list to make sure you’re aware of these common mistakes.
1. Not bothering to check your credit score
While checking credit scores may not be the first thing on renters’ minds, it matters now more than ever.
“With more renters than available rentals, landlords are being more strict on creditworthiness,” says real estate agent Denise Supplee, co-founder of Spark Rental. “Since there are more and more applicants to choose from, the one with a strong job, good credit, and income will get an apartment over someone with little to no credit.”
The good news is that all renters can easily check their credit through many free services like Credit Karma, which also provides information on ways to repair your credit if there are issues.
2. Not having your rental paperwork ready
Many first-time renters make the mistake of thinking they’ll be able to look at apartments and later get their application materials together. But things move fast in the land of rentals today, and a landlord is not going to wait while you go home to get your paperwork in order.
“Today, if you don’t have a filled-out application form and six months of pay stubs/tax returns/references ready to go, your application usually gets thrown to the bottom of the pile,” says Jameson T. Drew, president of Anubis Properties.
Drew suggests that applicants carry a scanned or electronic copy of all the documents most landlords require to showings.
“If you are new to renting, make sure your co-signer is ready with all of their forms as well,” says Drew. “The last thing you want to do is start asking Dad if he can send his bank statement to you. You won’t get that unit.”
3. Assuming you’ll get the rental just because you apply
First-time renters often assume that once they’ve found a place they like, all they have to do is apply and they’ll get it. However, even if your credit is stellar and your financials all add up, the market is extremely competitive at the moment, so it may not be enough to guarantee you come out on top.
“As a property manager, it is not unusual to get more than one application, and several could be a toss-up,” says real estate agent and attorney Bruce Ailion, with Re/Max Town & Country in Atlanta. “At that point, we present the advantages of each to the owner for a decision.”
In that case, you might want to try to sweeten the deal a little to make yourself stand out. While bribes are verboten, Ailion suggests you could say you’d be open to paying a little more in rent—maybe $25, $50, or $100 more per month—to secure the property.
“Tenants rarely offer to pay extra rent, so just stating your willingness may be enough to get your application noticed,” says Ailion.
4. Paying higher rent than you can actually afford
Unfortunately, many renters in a tight market make the mistake of not thinking through what they can actually manage to pay monthly in advance, and then they find themselves completely “rent poor.”
“It is easy to get swept up with your emotions and push your budget when you are hunting for a rental apartment,” says financial adviser Michael Cannivet, president and chief investment officer of Silver Light Asset Management.
To avoid that pitfall, Cannivet suggests renters employ the 30% rule. For example, many landlords require that your annual gross income be somewhere between 30 to 40 times your monthly rent. Thus, if you earn $75,000 per year, you can afford to pay around $1,875 a month for rent.
5. Panic renting
Many renters right now are just grabbing whatever they can get without thinking through what they really need.
“During and post-pandemic, things were moving fast and people wanted solutions immediately,” says real estate agent Tami Bonnell, co-chair at EXIT Realty Corp. International. “People are making decisions based on emotion rather than facts.”
As a result, Bonnell says she’s seen many people having to downsize or unable to find the size they want. Then they have to put things in storage—which costs money they could have used for rent.
Take a breath and make sure any apartment you apply for fits your life.
“Put a list together of needs and musts, and make sure you are asking the right questions,” says Bonnell.
6. Having too narrow search criteria
Too many renters cling to an idea of what they want with no flexibility, which limits their options to the point that they might have trouble finding any place at all.
“While the amenities may not be as good as newer buildings, for example, older buildings might be rent-controlled or rent-stabilized,” says Valerie Fitzgerald, author of “Heart and Sold: How to Survive and Thrive in Real Estate” and a top agent with Coldwell Banker in Los Angeles. “And that limits the percentage the owner may increase the rent each year.”
7. Not clarifying all costs
Many renters assume that the number they’re quoted as “rent” is all they’ll have to pay. However, this is a mistake. Gone are the days of everything automatically being included in your monthly bill.
“Years ago, it was assumed that the landlord would cover anything and everything that went wrong with the home,” says Jason Gelios, real estate agent with Community Choice Realty in Southeast Michigan and author of “Think Like a Realtor.” “Today, landlords are now writing into their lease agreements that tenants are responsible for certain things, including the service call for a potential repair, up to a certain amount.”
Thus, you need to make sure you know what you’re signing up for.
“It’s important to read the fine print, looking for additional costs such as trash pickup, parking, community amenities, concierge services, Wi-Fi, and pets,” says Cannivet. “Pay special attention to any stipulations regarding the requirements for getting your deposit back.”
Before signing a lease agreement, renters also need to ask if any utilities are included in the rent.
“Renters might have to pay for electricity, gas, water, and sewer,” says real estate investor Brian Davis, co-founder of Spark Rental. “Try to get estimates for gas and electric bills at different times of year, because these fluctuate wildly based on the season.”
8. Not doing a walk-though with your landlord before you move in
Renters should be aware that they need to protect themselves by looking for damage prior to taking possession of a space.
“Before moving a single dish into the apartment, you should conduct an in-person walk-through with the landlord or property manager,” says Davis.
The landlord should provide a written form, and you both note any pre-existing problems in the unit.
“At the end of the walk-through, both parties should sign the form, documenting the exact condition of the unit at the start of your lease term,” advises Davis. That way, the landlord can’t claim the tenant caused damage that was already there and vice versa.
Also, take your own time-stamped pictures of the property before moving in.
“Taking photos is important so that there are no discrepancies on the condition of the rental unit when you move in,” says Cannivet.
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