Renting smart in a landlord market
Renting a home is not as easy at it once was. As the economy degrades, more and more people are looking to rent, while the number of available rentals is down. Landlords have the upper hand and can afford to be much more selective about who they rent to. The renter has to be more savvy than ever to ensure a happy outcome.
Not so good for the renter
According to Christina Argon of Ebay, rents went up 2 percent in the first quarter of 2011 and are expected to rise 3 or 4 percent over the rest of the year. Vacancy rates, however, are dropping as renters are choosing to stay put. Vacancy rates are down 6.2 percent from this time last year. The trends point to an improvement in the housing market and may be an early sign of economic recovery. It is not, however, currently a great position for the renter to be in. Rents are rising, vacancies are more scarce, competition is tougher for properties, and landlords are less willing to make concessions or offer incentives.
Do your homework
But there are many things a prospective tenant can do to hedge bets in the rental game. The first is to begin early and do your research. Start a month or two before your current lease expires. Once you find a house or apartment you like, contact the County Clerk to search the public records for legal action or liens against the property. Remember, each rental you request will require a background search with accompanying application fee. It is best to narrow the field as much as possible ahead of time.
Landlords today routinely check credit scores and criminal backgrounds. While some blotches on the credit report do not necessarily spell rejection from landlords, they will be turned off by consistent late payments on utilities and other bills. And, of course, the cleaner your criminal background the better. One or two minor marks will not disqualify a person, but any pattern of legal problems could be very difficult to overcome.
A third or less of income
Another factor to consider is what you can afford. You may have set ideas on this, depending on your own needs and spending patterns. But one needs to consider this from the landlord’s perspective. Generally speaking, a landlord will consider a prospective tenant who earns at least three times the rent. A person looking to rent an apartment for $1,000 a month will likely be rejected if they do not have an income of $3,000 a month, or roughly $39,000 annually.
Lock in a lease
When you find the place that you can afford and that meets your needs — and you garner the landlord’s approval — Argon suggests trying to lock that rate into a lease of 12 or 18 months. Experts say rents will only go up in the foreseeable future. Keep it as low as you can for as long as you can.