By Bruce Cathcart
Having a trusted real estate agent help you find a house to rent can really make the difference between a positive experience and one where you are left wondering “what the heck did I do wrong?” But having a good working knowledge of the rental basics can really be a benefit whether you decide to enlist the help of your trusted real estate agent or go it alone when it comes time to make your move.
Renting or leasing; what’s the difference and which one is right for you? When leasing a home a tenant enters into a binding contract with their landlord to rent the home for a certain period of time with a fixed rent. This is usually one year but it can be more or less depending upon how the lease is negotiated. The important thing to be aware of is that when a tenant enters into a lease they are obligated to pay the monthly rental for the entire term of the lease unless other arrangements are made with the landlord. The benefit of having a lease for the tenant is that the landlord cannot make you move out or change the terms of the lease (like raise the rental amount) provided you are complying with the terms of the lease (making your payments, keeping the house up, not breaking the law, etc.). Even if the landlord sells the home, the new owner must honor the terms of the lease! A lease is the best option if you can commit to the term of the lease and will provide you with the most security and stability. As a tenant, if you are unable to commit to the terms of a lease then the other most common option is the monthly rental agreement. This too is a binding contract but only for 30 days at a time as either the tenant or the landlord can terminate the agreement usually with only 30 days notice. While it gives the tenants the freedom to leave with just a month’s notice, it also gives the landlord the option of asking the tenant to leave with just 30 days notice (unless the tenant has lived in the home for over 1 year, then it must be 60 days notice). Generally landlords can also change the terms of the rental agreement (like raising the rent!) with just 30 days notice. For those tenants with commitment issues a month to month rental agreement is their best option.
Whether renting or leasing a home, be prepared to come up with the first month’s rent and an equal amount for a security deposit. Some landlords ask for the first month and last month’s rent, plus an equal amount for a security deposit. Got pets? There may be a pet deposit. And don’t forget about the credit check fee with your application (usually $25.00 to $50.00 for each applicant) and then the deposits for your utilities. Renting a home can be expensive so make sure you have the funds necessary to cover all of these upfront costs before starting to shop for a rental home.
Do not confuse your security deposit with your last month’s rent. While the landlord may deduct from your security deposit the amount of any unpaid rent, you will still be responsible to make your last month’s rent before you move out. The security and pet deposits are fully refundable provided you leave the home in the same condition (or better) than when you first move in (and provided you are current on your rent). Make sure that you provide your landlord with a list of all of the deficiencies in the home and it is always a good idea to take pictures for your own records and to have on hand in case you need them when you finally move out. Make sure that you get the landlord’s approval before you make any modifications to the home as well. If the landlord does not approve them in advance (and in writing), the cost to remove them and restore the home to the way it was can also be deducted from your deposit.
Next week I will cover the important questions to ask before renting a home that can save you a lot of headaches and disappointment by knowing the answers before you move in!
This week’s real estate tip: Whether renting or leasing a home make sure to have your agreement in writing. Make sure you understand your agreement and keep a copy for your records. Your trusted real estate agent should be able to explain your lease or rental agreements to you so do not hesitate to contact them for help!
Bruce Cathcart is the Broker/Co-Owner of La Quinta Palms Realty, “Your Friendly Professionals” and can be reached by email at firstname.lastname@example.org or visit his website at www.laquintapalmsrealty.com.