How Much Rent is Too Much Rent?
You want what every apartment renter wants: the most comfortable surroundings
you can get for the lowest possible monthly rent. Some of today's newly
constructed apartment communities have taken luxury to an entirely new
level. Some complexes have gas fireplaces, TV monitors by the front door,
drive-through mail service, and office equipment for their tenants, among
other creature comforts. Every renter has to consider the importance of
amenities like these. Are they important enough to you to merit a rent
increase of perhaps $200 more than the rent you pay now, at a modest yet
affordable complex? While some of us consider an apartment as just a place
to hang one's hat, others place a premium on home surroundings. But how
do you determine how much you can stretch your budget -- without ending
up in the poorhouse in the process?
One suggestion, provided by Metropolitan Life Insurance Company, is to
spend no more than 25 percent of your monthly gross income on your rent.
For example, if your annual salary is $30,000 per year, or $2,500 per
month, you shouldn't plan to spend more than $625 per month on rent. And
although it goes without saying, it's important to remember that the extra
money you allocate for rent in a slightly more upscale complex means less
money for your other expenses -- utilities, loan payments, entertainment,
food, and most important, savings.
Here's a short checklist of factors, provided by Florida-based Apartment
Hunters, that you'll want to consider when checking out a neighborhood.
Of course, some of these factors may mean more to you than others, and
you may want to consider some additional factors of your own.
- Is it close to your place of employment?
- Is the neighborhood safe?
- Is it close to a good school system?
- Is it close to your church?
- Is it close to stores, banks and the post office?
- Is it close to public transportation?
- What are the parking regulations (if you own a car)?
First-time apartment renters share one thing in common: surprise at just
how many hidden expenses they encounter. Hiring movers and paying your
first month's rent only represent two small pieces of what can be a rather
expensive pie. In addition, you're going to be subjected to a credit check,
and you're required to prove that your gross monthly income is at a certain
level, in order to provide your complex with some degree of security that
you can pay your rent each month. So if you've overestimated your financial
abilities in the past, either failing to make rent payments or credit-card
payments, now is the time when that history could come back to haunt you.
Here's a brief run-down of some of those hidden expenses -- and pre-move
procedures -- of which many renters either aren't aware, or that they
overlook in the excitement and bustle of moving:
Security deposits. Security deposits range from $100 to a full
month's rent; the average deposit is approximately $250. Some apartments
require separate deposits for roommates. Credit application fees are generally
$10 to $35.
Verifiable income. Verifiable gross monthly income is at least
three times the monthly rent. For example, a rent of $500 would require
a minimum of $1,500 gross monthly income.
Credit check. A credit check will be conducted by the apartment
community or management company representing the community.
Rental history. Any previous rental history will be verified,
and mortgage payments may be included as rental history. Additionally,
some communities are also conducting criminal background checks.
Leases. All apartments require a written lease. Lease terms typically
are seven to 12 months. Most leases are written for 12 months. Shorter
lease terms and month-to-month options often are available at premium
rates.
Utilities. You rent will often include sewer, water, trash, and
pest control. Gas and electricity are almost always paid separately by
the tenant.
Pet deposits. Although many apartment complexes allow pets, they
require residents to pay dearly for the privilege of setting up house
with Fido. Pet deposits are stiff, and tenants are charged per pet. Deposits
range anywhere from $100 to $300 per pet, and either all or a portion
is nonrefundable. Some complexes charge additional rent for pets -- on
top of the deposit. Pet size is commonly restricted to 20 pounds and 12
inches in height, although some communities do allow larger pets.
Courtney Ronan is a
freelance writer who contributes a weekly column profiling various
communities. She also writes a weekly review of real estate related
web sites. Courtney's career in journalism has included recent stints
as managing editor of Agent News and as associate editor of Texas
Business magazine.
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Written
by Courtney Ronan
