One effect of the housing market's collapse has been to turn thousands of homeowners into renters. With owners losing homes to foreclosure or selling properties they can't afford, the homeownership rate has plunged; it now stands at 66.2%, lower than any time since 1997. But this has created a huge demand for rental apartments and houses. The rental vacancy rate fell to 9.5% for 2011, the lowest level since 2002.
Even so, all markets are local, with cities on the coasts generally seeing the lowest rental vacancy rates. At the bottom is New Haven, Conn., with a rate of 2.1%, according to Reis, a provider of commercial real estate data. Nationwide, that tight market drove up rental prices almost 2.5% last year.
But competition for apartments can trap renters into the scarcity mentality that helped fuel the housing bubble in the first place. "If I don't act now, I'll never find another place this good at this price," goes the thinking. And while you may have to look longer when rentals are less plentiful, it's still better to think about the long term. Though all state rental laws vary, and single-family home rentals can differ from large apartment complexes, in general, here are some costly mistakes to avoid when renting:
1. Signing a lease without reading it carefully
No matter how frenzied the market, don't rush into a rental agreement if something doesn't feel right. For example, does the fine print stipulate that you have to pay extra for utilities, water or parking, or were those costs sold as "included"?
Take the document home and have an attorney, or a friend or family member who has more renting experience than you, read it over. To ensure the lease doesn't violate your tenant rights, check out the Department of Housing and Urban Development's website, which provides a state-by-state list of what's legal. Eric Feinberg, a tenant lawyer in New York City, says, "I can't tell you how many people knew when they were signing that it felt wrong and how much more it cost them in the end."
2. Signing a lease that doesn't fit your life
Think you might want to sublet in the future? Do you have pets or frequent visitors? Think about your lifestyle and what you need in a rental. Some leases will charge you extra for guests who stay more than two days, forbid subletting or make the cost of repairs your responsibility, including problems that pre-date the term of the lease. These are details you'll want to go over carefully before signing, and if there are items on the rental agreement that you don't like, try negotiating with the owner to have them removed.
3. Not taking pictures when you move in
Almost everyone has a digital camera or cellphone these days. You should use yours to document the state of the property before you move in. You'll also want to note pre-existing damage on the landlord's move-in checklist. If the landlord doesn't have one, make your own list and send it to the landlord, signed and dated. And before signing a lease, get in writing any major repairs the landlord has promised to make.
Renter Laurel LaFlamme of Charleston, S.C., says her landlord promised to fix the backyard pool when she and her family moved in. Two years later, the pool is a murky breeding ground for mosquitoes and frogs and has made her backyard unusable.
4. Not checking out the neighborhood
Mitchell Weiss, a professor of finance at the University of Hartford in Connecticut who advises student renters, recommends that if you're serious about a rental, knock on the doors of a few neighbors to ask about the building's upkeep and neighborhood safety. You also can check into crime patterns with the local police department or on websites like CrimeReports. And come back to visit the property at night: That quiet street corner could look quite different after sundown.
5. Not getting renters insurance
A landlord's insurance policy doesn't cover the tenant's personal property. So if there's a flood, fire or water-line backup and your valuables are damaged, you're usually responsible for the costs unless the landlord was aware that a dangerous condition existed and failed to correct it. After you sign the lease, make getting a renters policy the first item on your to-do list. Policies are relatively inexpensive; premiums usually range from $100 to $300 per year.
Author:Kelly Olsen Phone: 201-669-7520 Dated: May 7th 2012 Views: 1,365 About Kelly: Kelly brings an element of enthusiasm and energy to the Gordon Crawford Home Selling Team that is am...
The Gordon Crawford Home Selling Team is one of the premier real estate teams in NJ. Consistently ranked in the top 100 teams in the country, our motto is treat every client like they are your only client. Give us a call and let us show you what we can do for you!
Do you know how your credit score can affect your mortgage rate?
"For Gordon Crawford:
Recommended to us by a friend, Gordon and his team of professionals provided the support we needed to first decide we wanted to sell, determine the value of our home, stage it for showing and negotiate a speedy sale. Gordon listened to our concerns and took our feelings and needs into consideration at every turn. His team is the best. They are truly dedicated to their clients. I would use Gordon again and recommend him to anyone without reservation."