Renting a home comes at a cost, even though this is often lower than ownership. So, how do you make ends meet? For many of us, one step in that process is to know what prices we regularly face. This knowledge can help us plan our budgets.
Many people think that renting is only the cost of the rental check. However, this isn’t true. Renters usually owe more than the cost of occupancy. Take some time to understand what costs you might have to expect when you sign a lease.
1. Basic rent has supplementary costs
You don’t want to face penalties, or even eviction, because you can’t pay your rent. Therefore, you should always know what your monthly invoice will contain.
- Your basic rent is the price you will pay to occupy the property.
- Supplementary rental costs might come from a variety of special cases. These might include fees for housing a pet, or pest and trash removal fees.
Landlords will usually have to list the base rent and additional fees on your lease. This will help you know exactly how much you will pay per month. Many experts recommend paying only about 1/3 of your monthly paycheck for your rental costs. Take a close look at rental options to make sure you can always afford your lease.
2. Utility costs
These are fees like your lights, gas and water bills. They are critical to keeping your home habitable. Sometimes, you pay for utility costs in your rent. In other cases, you pay them as separate bills.
A good tip is to keep a record of how much you pay per period for these costs. Over time, you can often begin to anticipate upcoming utility bills. Some suppliers provide ways for customers to track their anticipated costs as well.
3. Renters insurance premiums
Many landlords require their renters to carry this form of coverage. It can cover liability costs renters might pose to others on their property. It can also protect the value of the personal possessions belonging to the renter.
Usually, it’s quite easy to afford these policies. Work with your agent to establish a policy so that you never over pay for your coverage. They can help you tailor your coverage so that you always pay a fair price. They can also help you ensure that you never default on your premium payments. You therefore won’t run the risk of losing eligibility to rent.
Keep in mind, you might face other bills related to the cost of upkeep on your rental. Make sure you set aside a nest egg to pay for additional costs that might pop up from time to time.