The past few years has given some people pause to rethink the need to buy a home. Fluctuating prices, a record number of foreclosures and difficulty getting a mortgage, you may want to rent instead.
There are still many factors to consider when renting; it isn't always easy and has different challenges from purchasing. Here's a look at some of them.
Leases
A lease is an agreement between the landlord and the tenant that gives you the right to occupy the property in exchange for rent payments. A lease's terms can be negotiated before it's signed. You're then obligated to pay rent and a landlord can't rent the property to anyone else during the lease period as long as the terms of the lease are being met.
As with any contract, the rental agreement should be in writing to avoid misunderstandings and should contain all of the terms agreed to by the parties. Lease terms should include:
- Names of all tenants
- Address of the property being rented
- Contact information for the landlord, which may be an individual or a property management company
- Amount of rent, and how often and when it's paid (first of the month, 15th, etc.)
- Amount of the security deposit; when and how it's paid and held
- Start date and end date of the lease term
- Penalties for late payments and any grace periods
- Amount of notice required both the landlord or the tenant must give to cancel the lease
- Who is responsible for utility charges, upkeep, repairs or alterations
- The signatures of all tenants and the landlord
Security Deposits
A security deposit is the money you pay to the landlord in case the property is damaged or you fail to pay rent. Landlords can use the deposit to cover unpaid rent and perform needed repairs or cleaning that result from more than normal use.
Usually the tenant pays the security deposit before moving in. All states allow landlords to collect a security deposit when the tenant moves in, but some states limit the amount landlords can charge. Many states require landlords to put deposits in a separate account, and some require landlords to pay tenants interest on deposits.
You can protect your security deposit by using a move-in checklist, which may be provided by the landlord, and by taking pictures of the condition of the property when you move in. At the end of the lease term, inspect the property with your landlord, and note on a move-out checklist any deductions for repairs and cleaning to be taken from your security deposit.
Evictions
An eviction is a legal proceeding where a landlord removes a tenant from a rental property. A landlord can't evict a tenant without a reason and notice. Eviction rules vary by state.
In most areas the following are considered possible reasons for evicting a tenant:
- Nonpayment of rent
- Refusal by a tenant to leave after the lease has expired
- Violations of the lease
Renter's Insurance
Although a tenant doesn't have to buy renter's insurance, unless the rental agreement requires it, it's a good idea to have it to protect personal property. The insurance policy that the landlord may have does not cover your possessions inside of the apartment or house.
A renter's insurance policy covers furniture, clothing or electronic equipment in case of fire, theft, vandalism or weather damage. Renter's insurance also provides coverage for bodily injury or property damage in case an accident occurs at your rental home, such as a visitor slipping on a wet floor and breaking a bone.
Next page: Fair Housing Act