Congratulations recent college grads! You're finally out there in the real world. For many of you, this means that it's time to start thinking about getting your first apartment after college. To help you know what to expect from the process, we went to Chris Hawkes, President of West & Woodall Property Management. He offers these ten tips to help recent graduates navigate renting in the Triangle.
Determine Affordability Based on Your Finances
Start thinking about your finances and what you can realistically afford each month. Remember, renting an apartment is not just about the rent itself. You'll also need to factor in other general costs of living.
Here's how you can take a good look at your income versus expenses to see what you can swing.
- Income. To determine affordability, you must start by calculating your monthly income. To do that, take your gross monthly income and subtract any taxes and other deductions to determine your net monthly income. This will be the amount of money you have to work with for your monthly living expenses.
- Expenses. Next, you'll need to add up all of your necessary monthly expenses, including rent, utilities, groceries, transportation, and any other bills you have to pay each month.
- Save or Income Ratio. Then, you'll need to subtract your expenses from your income to determine how much money you have left over each month. This is important because you'll want to have some extra money to save or spend on discretionary expenses.
- Affordability. Finally, you can determine affordability by comparing the amount of money you have left over each month to the cost of renting an apartment. Ideally, you don't want to spend more than 30 percent of your monthly income on rent. For example, if your net monthly income is $2,400, based on the 30 percent guideline, you can afford to spend up to $720 on monthly rent. Keep in mind that everyone's financial situation is different, so it's important to determine a budget that works for you and stick to it. Also, don't forget to factor in unexpected expenses and save some money each month for emergencies.
Figure Out What You're Looking For in Your First Apartment After College
Once you've determined what your budget is, you need to figure out what exactly you're looking for. Here are just a few of the questions that Chris recommends you should be asking yourself.
- Are you looking for a studio, a one-bedroom apartment, or a shared apartment with roommates?
- Do you want to live in an apartment or do you want to live in a standalone house?
- Are there specific amenities that you're looking for?
- Do you need extra space for a home office? (Chris adds that this is much more common these days in our post-COVID world.)
- Do you need a pet-friendly apartment or house?
- Do you want to only live near other young people?
- Do you need to live near work or are there other location-related traits that you're looking for from your dream apartment?
According to Chris, many people in this age group want to live near bars, restaurants, clubs, and other active spaces. "They want convenience and walkability where they can picture themselves easily gathering with friends and co-workers."
Once you have the answers to these questions nailed down, it's time to get serious about finding an apartment.
Conduct An Apartment Search Through Current Listings
When you're conducting your apartment search, there are many online resources that can help. Chris says that most people go to Zillow, but there's also Craigslist and Trulia. You can filter your search results by price range, location, number of bedrooms and bathrooms, and more.
Another hack is to contact the leasing manager for a property management company, like West & Woodall. They can suggest properties that could be a good match and may have information on some that are not yet listed.
No matter how you go about it, doing a thorough search of apartments and other types of rental units will help you to understand what to expect from local rent prices. This, combined with your understanding of your finances, will let you know fairly quickly whether you can afford to live by yourself right out of college or if you're going to need to find one or more roommates.
Visit the Unit In Person
For any type of housing, but especially rental properties, it's always better to visit the unit before you sign anything. That's because you never truly know what you're getting when you're just scrolling through pictures on a website. Plus, it's always good to get a feel for the neighborhood and check out the surrounding area.
As you walk through the property, check for any of the amenities that you would consider to be "must haves." For example, if the description says that the apartment has a dishwasher and that's something that is important to you, make sure that you see a permanent dishwasher installed in the kitchen.
Understand the Application Process
Understanding the application process is critical when it comes to rental units. Chris explains what the standard procedure looks like.
- Prepare relevant documents ahead of time. This usually includes the following: photo identification, proof of employment such as pay stubs, credit reports, rental history, and any other relevant information that could help your application.
- Submit Your Application. This may include completing a paper form, filling out an online application, or both.
- Review Your Application. The landlord will review your application and may contact you to ask for additional information or clarification.
- Background Checks. Landlords or property managers may conduct background checks on potential tenants. This can include checking your credit history, rental history, criminal history, and employment history. You'll need to provide consent for these checks to happen.
- Approval or Denial. Based on the information provided in your application and background check, the landlord or property manager will approve or deny your application. It's important to know that rental applicants can be denied for a variety of reasons. Some of the most common include inadequate income; lack of or poor credit history; a history of evictions; suspicious background checks; incomplete information; high competition for a limited number of apartments; unsatisfactory references from landlords, employers and/or personal references; no verifiable source of income; too many people for the property; or a history of late rental payments. While all of these are valid reasons for denial, under the Fair Housing Act, it's illegal for landlords to deny applications based on factors such as race, gender, or disability.
Know Whether You Will Need a Co-Signer
If you're thinking about renting an apartment after college, you more than likely already have a job or good reason to feel fairly confident that you'll be getting one soon. That's great, and you're well on your way to total independence. But, you may not quite be there yet. If you can't prove that you have a stable income and a good credit score, the landlord or property management company may require that you have a guarantor or co-signer on the lease. This means that someone else, usually a parent or close relative, will need to guarantee that they will pay the rent if you can't.
Chris explains that the typical requirement for being able to sign a lease on your own is that your income is three times what a month's rent would be. So if the rent is $2,000 a month, your income should be at $6,000 a month. That will need to be proven with pay stubs or bank statements.
Even if your income is high enough, Chris cautions that you will likely still need a co-signer if you have a low credit score or a lot of debt.
The Importance of Good Credit
The importance of having a good credit history cannot be stressed enough. Chris says the timely payments of any bills in your name can go toward building a credit profile. This could include paying for Netflix, a cell phone, a utility bill, car insurance, or a gym membership. All of these can be used and are incredibly important when you're just starting out.
Carefully Read Your Rental Agreement
A rental agreement outlines the terms and conditions of your lease with a landlord. Since it's a legally binding document, it's important to carefully read the rental agreement before you sign it so that you fully understand your obligations and responsibilities as a tenant.
Here are some of the key things to look for.
- Rent and Payment Terms. This should state the amount of rent you have to pay, the due date, and the penalties for late payment.
- Termination of the Lease. This should outline the policy for early termination of the lease. It may include a penalty fee or loss of a security deposit.
- Security Deposit. This should specify the security deposit amount, its purpose (e.g. to cover damages or unpaid rent), and the timeline for its return (e.g. within 30 days of the lease ending).
- Length of the Lease. This should clearly state the lease start and end date as well as any renewal options.
- Responsibilities of the Landlord and Tenant. This should outline the responsibilities of both the landlord and tenant, such as who is responsible for maintenance and repairs. Chris says that most landlords require that issues be reported immediately. For example, if tenants don't quickly report a water leak, any resulting damage or high water bills are their responsibility. If the tenants don't change the air filters and something happens to the HVAC unit, that could be their responsibility.
- Rules and Regulations. The rental agreement should include any rules and regulations that the tenant must follow. These might include restrictions on pets, smoking, and noise levels.
Questions to Ask Property Managers, Leasing Offices, and Landlords
If you have questions about the rental agreement, the time to ask them is before you sign any legally binding documents. In addition to those, here are some other questions that you may want to ask.
What documents do I need as part of the rental application process?
In most cases, these are the standard documents that you'll need to submit with your application.
- Proof of income (pay stubs, W-2s, or a job offer letter)
- Identification (driver's license, passport, etc.)
- Rental history (past rental agreements and contact information for previous landlords)
- Credit report - Some landlords will run their own credit report but may require you to provide one if they don’t.
- References (personal or professional)
How Much Money is Needed Upfront?
Typically, most landlords require tenants to pay the first month's rent and a security deposit upfront. The security deposit may be equal to one or two months' rent, depending on the landlord's policy and the rental market.
There is also usually an application fee, which Chris explains is needed “to cover the costs of our time as well as conducting the credit report and background check.” The application fee is not usually refunded if the applicant chooses another unit or they are denied by the property management company or landlord. West & Woodall Property Management does allow the applicant to transfer their application to another of the company’s listings if they are not approved for their first choice.
In addition to these standard upfront costs, if you have pets, you will need to be prepared to pay a pet deposit.
It's always best to check with the landlord or property management company to get a specific breakdown of the upfront costs.
What Does the Security Deposit Cover?
A security deposit is money paid by a tenant to a landlord before moving into a rental property. It is intended to cover any damage inflicted upon the apartment or any unpaid rent or bills. Chris says the security deposit should be returned to the tenant at the end of their lease, provided there are no outstanding damages or unpaid rent or bills. This is usually within 30 days of the lease ending and the tenant vacating the property, but could take up to 60 days if estimates for repairs are needed.
What Utilities Are You Responsible For?
If it's not stated in the lease agreement and contract, you'll want to ask the landlord if you are responsible for paying for utilities. Some landlords include the cost of utilities in the monthly rent, but others do not. Even if they say utilities are included in the rent, be sure and clarify exactly which ones are. This is so you'll know if you need to add anything based on your needs and preferences.
These are the most common utilities that are needed for a rental apartment or house.
- Trash removal
- Cable or satellite TV
What is the Policy for Showing the Unit to Future Tenants While You're Still Living There?
According to the North Carolina Real Estate Commission, landlords are required to give written notice to tenants before entering their rented unit. If a landlord wants to show the rental unit to future tenants, they must provide reasonable notice to the current tenant and gain their consent for entry. Chris says the policy has to be included in the lease agreement and at least 24 hours notice is typically required.
What are the parking accommodations for the unit?
The parking accommodations for your rental unit will depend largely on its location and the type of property. These may include:
- On-street parking. This may be the only option available in areas where there is limited or no off-street parking available.
- Driveway/parking pad. Some rental units may have a driveway or parking pad, which can accommodate one or two vehicles.
- Open parking lot. Larger buildings or complexes may have an open parking lot where residents can park their vehicles.
- Assigned parking. This is where each unit is assigned a specific parking spot or spots.
- Covered parking. Some rental units may offer covered parking, such as a carport or parking garage.
It is important to note that some parking accommodations may come at an additional cost, such as covered or assigned parking. You will also want to find out what the rules are for guest parking. If you are going to have more than two people living in your unit or know that you will be having guests, it is always best to clarify parking arrangements with the landlord or property manager before signing a rental agreement.
Understand the Difference Between a Guest and an Occupant
According to Chris, a common issue that comes up for young people renting their first apartment out of college is not understanding the difference between a guest and an occupant. An occupant is somebody who is living there full-time and who is listed on the lease. A guest, on the other hand, is someone who is visiting temporarily, such as for a weekend, and does not permanently reside at the property. Guests are allowed to stay for a short period of time as long as they do not violate the terms of the lease agreement and do not cause damage to the property.
It is important for tenants to understand this difference. Violating the terms of the lease agreement can lead to eviction or legal action by the landlord. Additionally, allowing unauthorized occupants to live in the property can also lead to potential liability issues for the tenant.
Document Any Damage or Issues with the Unit When You Move In
Last, but certainly not least, on your list is to document any damage to the unit when you move in. Chris strongly recommends going through the property before moving your things in to see if anything is wrong. "If there's a scratch on the floor or the wall, mark it, take a picture, and send it to the landlord." That way,
Bottom Line on Renting Your First Apartment After College
The bottom line on renting your first apartment after college is that while it's certainly exciting, the process can also be overwhelming - if you don't know what you're doing. The key is to do your research, stay within your means, and be prepared with the documentation that you'll need to provide!
For more information on any properties that we may have available that might fit your needs, contact us at email@example.com.