Renting for the first time

[The Succubus]

Howdy,

For the past few years, I've been living in hospital accomodation but now that I've finally got a permanent position (as a lead audiologist :smalleek:), I need to find a place to rent close to the hospital. As this is the first time I've done something like this, I could use some good advice, questions to ask, legal things, what to do if something goes wrong.....

[22Charisma]

Are you renting alone or with roommates?

Also don't get anything that doesn't come with a fridge/stove. Been there, done that, not doing it again. If water/electricity is included in your bill, that's one less head ache for you, just make sure you will be using that much water/electricity.

Lastly Kudos on getting a permanent position! :smallbiggrin:

[Serpentine]

Note: the following advice is based on Australia. Advice may or may not apply in your country.

Okay, so you've got your house. You've been approved for it and all.
1. Read through the lease, carefully. Pay careful attention to the terms, particularly any special conditions. Remember: You have the right to take your time reading your lease, and to let anyone else read it whom you want to before you sign it.
2. Go through the house with the condition report. Make notes on every single little flaw in the place, no matter how small. Also take ample photos of the house. All over. That way if they try to blame you for some damage, you can check your photos and know whether or not you are responsible for them. Basically, cover your arse.
3. Know your rights and responsibilities. How much notice does your landlord/real estate agent have to give before coming onto the property? Who has to pay for new lightbulbs or other maintenance? So on, and so forth. For Australia (specifically New South Wales), a summary can be found here (http://www.tenants.org.au/publish/factsheets/index.php).
4. If the landlord or real estate does violate your rights or fail in their responsibilities, call them on it. Try to keep as much communication in writing as possible, so that you have a record of everything. If complaining and/or talking to them doesn't work, consult a tenants' advisory service. The one for NSW is in the link above.
5. More a... recommendation than proper advice. I suggest that you invest in good-quality appliances - good washing machine and fridge and vacuum and so on - preferably with good energy ratings. It'll just save a lot of grief later. (disclaimer: comes from someone who bought a great big green fridge from the shop at the tip. Undecided whether I regret it)
6. Get a silverback gorilla, aka a big ol' George Foreman Grill or equivalent. They're really handy.
7. Stay on top of housework.
8. If you live alone, get a pet if you can. Makes everything a bit more okay.
9. Don't forget the little things you'll need - pegs, cutlery, cleaning products, that sorta thing.
There ought to be a #10. Learn your travel options and distances. If you can walk anywhere, how long does it take? What public transport is there around?

[Brother Oni]

Some expansion on Serpentine's excellent advice:

If you'd like to get a pet, double check your lease if you have to ask your landlord's permission or whether you're allowed one at all. Don't get one first then try asking.

Make sure you transfer all utilities into your name (electricty, 'phone line, water, gas, internet) and when they're all going to be plugged in. There's no point in getting internet before your 'phone line is connected.

Double check whether you're on a meter or a prepaid key for your utilities, especially for electricity. Make sure you know where the nearest shop is where you can get this key recharged.

I doubly recommend the advice to take pictures of the state of the apartment, especially if it comes partly or fully furnished. At the end of your lease, anything that's damaged beyond what's considered to be reasonable wear and tear, you'll probably have to replace (double check your lease, different clauses may apply).

If you're unsure of the neighbourhood, or who has keys to your apartment, get contents insurance. The landlord will only normally have structural insurance, so if anything gets stolen, you're out of luck.

Further to the 'knowing your responsibilities' part, if anything is damaged, or a leak occurs, inform your landlord/letting agent as soon as possible, ideally backing it up in writing at a later date if it's an emergency.

Don't go adding shelves or making other changes to the apartment without permission. Especially don't go nailing picture hooks into the wall.

Keep any and all correspondance in a safe file, just in case.

[Cyrion]

I seem to be making this a theme in threads of late-

Try to make out a budget in anticipation of the move. Talk to people you know who rent and get a guess on utilities, food, etc. if you don't have an idea on your own already. Then keep close track of your actual expenses and adjust your budget accordingly.

It's really easy to get very excited about a new apartment and a full-time job and lose track of the ticky-tacky expenses of everyday life. Then you discover that your income doesn't match your outgo... Good budgeting makes sure the excitement lasts.

[Don Julio Anejo]

I second getting a kitty.

My advice is simple. Generally, the better the neighbourhood and the building, the less likely you are to have problems with the landlord (if, obviously, you're renting in a condo development/highrise/whatever, not if it's a basement in a house). Conversely, avoid sketchy areas at all costs. They may not be bad to live in (sketchiness notwithstanding) but landlords are probably more used to dealing with junkies or dealers than hospital doctors and won't care very much if something's broken/leaking/shorting/whatever.

[Force]

I don't know what your resources are like, but are you in a position where you could scrape up the funds for a 10% down payment on a small house? I know the housing market is crap right now, but it's better to pay money into something you can keep than rent, which you're just dumping down a black hole.

Also, no matter what you do, don't buy a new car. You lose a significant percentage of the value just driving it off the lot. A five-year-old used vehicle will be much cheaper.

[The Succubus]

Hmmm, some good advice so far.

I'm not really in a position to make a deposit on a house at this stage, maybe once I've been securely in the job for a year or more, I might consider it. Besides, the housing market is dire at the moment, so probably not a good time to buy.

[Brother Oni]

I don't know what your resources are like, but are you in a position where you could scrape up the funds for a 10% down payment on a small house? I know the housing market is crap right now, but it's better to pay money into something you can keep than rent, which you're just dumping down a black hole.

Depends on your situation.

Despite having a secure job and a good credit rating, even if I could scrape together a 10% deposit on a house, the bank still won't give me a big enough mortgage. :smallsigh:

[Keld Denar]

Depressed housing market is the BEST time to buy. Talk to a realator. Throw some completely lowball bids out and see what comes back. You might be surprised, and you could get a REAL steal. My buddy's dad is a realator in the metro Detroit area...1-1.5 million dollar homes over 2500 sq ft are going for $250,000 or less in some places. Plus, if you are in the US, I think the $8000 federal tax credit is still in effect.

[Brother Oni]

Depressed housing market is the BEST time to buy. Talk to a realator. Throw some completely lowball bids out and see what comes back. You might be surprised, and you could get a REAL steal.

The housing market is substantially different here in the UK.

With my current salary and a 10k deposit, my bank will lend me up to 75K. The cheapest I've seen a 3 bedroom house in my area is 140K.

[xPANCAKEx]

check if you're allowed to redecorate

if the rent included bills, check if it includes internet in that (some properties dont)

tv is a non-essential so dont worry about covering that cost just yet

work out youre route to work and how long it will take by car and by public transport

[Serpentine]

I don't know what your resources are like, but are you in a position where you could scrape up the funds for a 10% down payment on a small house? I know the housing market is crap right now, but it's better to pay money into something you can keep than rent, which you're just dumping down a black hole.Not necessarily. When my dad and his girlfriend were thinking of buying a house, their financial advisor actually told them that renting is more financially sound than buying.
The house they bought together maybe 5 years ago, if that, is the first non-rental place my dad has ever lived in...

[Don Julio Anejo]

I'll be the lone white crow/weird kid no-one likes when it comes to the discussion about buying a house (probably because I don't come from an Anglo-Saxon culture), but... Why would anyone ever want to buy a house? I mean it makes sense if you're married and have kids, or you know it's in a place you want to spend the rest of your life in.... or if buying >> renting fiscally on a fairly short term (few years), which is unlikely...

But in any other circumstances renting beats out buying. Now, I know I'm also biased by insane ($500k for a shanty in Surrey, $700k for a 1940-60s house in an average neighbourhood, $2+ mil for anything in a nice neighbourhood and that's before looking at nice new houses or areas like Shaughnessy, which aren't even the high-roller elite neighbourhoods) housing prices here in Vancouver. But... do the math. $1600 will get you a 2 bedroom condo downtown in a building with all amenities that's a few years old. That's Vancouver prices, other places you'd only pay 2/3 of that.

When you buy, don't look at the fact that a house is only $250k or whatever. With compound interest accrued over 20 years, it comes out to $455k at a modest 3% interest rate. Even taking amortization for the full 20 years into account, it's still $332k. While making monthly payments of $1385.

So... now you're paying almost as much for a cheap house as you would for a nice apartment with all amenities. Except! You now also have to pay for things that would normally be included. Like: garbage disposal, water/hydro, in many places cable/internet, property tax, etc.

And until your entire mortgage term is up and assuming you haven't missed more than 2 mortgage payments in a row, you don't even own your house. The only difference between that and a rented apartment is that you can do your own home improvements. Which unless you actually enjoy doing that sort of thing (I personally do, but most people just hire contractors), it's simply easier to move.

And at the same time having this house takes away your freedom and mobility. You can't just suddenly pack up and move to Australia. Or go on a 3 year backpacking trip in the Andes. Or simply experiment with quitting your full time job and opening up a cozy little cafe.

[Keld Denar]

The difference is equity. Even if you don't fully own the house, you've invested money into it. Money that comes back to you when you sell, instead of lining the pockets of your landlord. When you move out of a rented place, you don't get ANY money back, other than maybe part of your security deposit.

A house, so long as you don't have to sell it for a major loss, is essentially a free place to live. Sure, you have to keep paying into it, but when you move out, if you sell it, you get a goodly portion of that money back. Its like paying rent, except that instead of that rent money going to your landlord, it goes into a bank account that you can't withdraw from until you sell. Granted, a morgage is often twice what you'd pay for rent in a given location, and you don't get ALL of it back, due to taxes, closing costs, interest, etc, but if you live there for 5-10 years, its generally an investment that pays for itself.

Not always, but often.

[KuReshtin]

The difference is equity. Even if you don't fully own the house, you've invested money into it. Money that comes back to you when you sell, instead of lining the pockets of your landlord. When you move out of a rented place, you don't get ANY money back, other than maybe part of your security deposit.

A house, so long as you don't have to sell it for a major loss, is essentially a free place to live. Sure, you have to keep paying into it, but when you move out, if you sell it, you get a goodly portion of that money back. Its like paying rent, except that instead of that rent money going to your landlord, it goes into a bank account that you can't withdraw from until you sell. Granted, a morgage is often twice what you'd pay for rent in a given location, and you don't get ALL of it back, due to taxes, closing costs, interest, etc, but if you live there for 5-10 years, its generally an investment that pays for itself.

Not always, but often.

This. Very much this.

If you're renting a place, you're basically paying off someone else's mortgage on the place (while also paying a bit extra since the landlord wants to make a profit), whereas if you're buying, you will likely get a good portion back when you sell it and move away.

Recently, the housing market hasn't been too great, but I remember a couple of friends of mine who bought a small house for about £55k, and about 2 years later, when they split up and sold it, they got £95k for it, and the only thing they'd actually done to the place was redo the kitchen with new cabinets and a new floor.

I also heard a story about a work colleague that had bought a flat (apartment for the people on the other side of the pond) while it was still being developed, and before the flats had even been completed, he got an offer to buy the flat off him for 15% more than he'd paid for it. And I believe that was about a £120k flat.

So, while renting is convenient and basically leave you with no strings, buying a house is an investment where you will more than often get money back when you do move on.

[factotum]

Recently, the housing market hasn't been too great, but I remember a couple of friends of mine who bought a small house for about £55k, and about 2 years later, when they split up and sold it, they got £95k for it, and the only thing they'd actually done to the place was redo the kitchen with new cabinets and a new floor.


That was presumably during the house price boom, though. At the moment house prices are *falling*, so just buying a house and expecting it to be worth more when you sell it just isn't that likely...I speak from bitter experience (bought a house in 1993 for £28000, sold it 7 years later for £25k and had to suck up the difference myself).

[KuReshtin]

Granted, this was back in 2001-2002 sometime, yes, so it was during the price boom.
Still, buying property is an investment that could very well pay off in the future.

Right now, it's a buyer's market, with prices dropping, but that can change again within a couple of years.

[THAC0]

While equity is great, it is great over the LONG TERM. So if you don't know that you are going to be living in the same place for a while (and in most places, that is QUITE a while), it's probably not the best idea. Additionally, there is what I like to call "The Joys of Homeownership." That is, when you are renting and that pipe bursts, you call the landlord and they deal with it. But when it's your own home, you're stuck forking out the dough for a plumber or learning a lot about plumbing in a very short amount of time.

I would NOT invest in a house unless you have a suitably large emergency fund.