How much rent should you pay?

Lesotho Times - - Property -

BE­FORE set­ting out to rent a home, you need to know how much you can af­ford to pay each month, but that’s not quite as sim­ple to work out as it may seem.

An­drew Schae­fer, MD of Trafal­gar, says fi­nan­cial ex­perts will say you shouldn’t spend more than a third of your gross monthly in­come on rent. How­ever, he says this does not take into ac­count the fact that many prospec­tive ten­ants are also try­ing to save the de­posit for a home of their own, or the fact that the es­ca­lat­ing costs of util­i­ties and trans­port can have a big in­flu­ence on the size of prop­erty they rent or the lo­ca­tion they may choose.

He says although ev­ery sit­u­a­tion will be slightly dif­fer­ent, there are cer­tain fac­tors that all renters need to weigh up be­fore sign­ing a lease.

Lo­ca­tion For in­di­vid­u­als who work long hours, a loft apart­ment close to the of­fice may be a smarter choice than a town­house in the sub­urbs, even if it is some­what more ex­pen­sive to rent, be­cause it will save on com­mut­ing time and the as­so­ci­ated costs. And if there are shops, restau­rants and recre­ation fa­cil­i­ties close by, so much the bet­ter. Sim­i­larly, those with school-go­ing chil­dren may be pre­pared to pay more to rent in an area close to top-rated gov­ern­ment schools be­cause that is still cheaper than pay­ing pri­vate school fees.

Space A fam­ily of four or five re­quires more liv­ing space than a young cou­ple, and even though a rental prop­erty may not be a per­ma­nent liv­ing op­tion, it should have enough space for ev­ery­one to feel com­fort­able.

On the other hand, big­ger prop­er­ties gen­er­ally cost more to rent, and more to run in terms of wa­ter and elec­tric­ity us­age, so fam­i­lies who are try­ing to save should be care­ful not to rent homes with more space than they ac­tu­ally need. They should also make sure that the rental prop­erty has its own elec­tric­ity and wa­ter me­ters, so they don’t end up pay­ing for any­one else’s us­age.

Se­cu­rity Al­ways check out the whole area sur­round­ing a block of flats or hous­ing com­plex be­fore you sign a lease. Don’t put your­self in harm’s way just to se­cure a lower rental – rather pay more to be safe, even if it means you have to cut some­thing else out of your bud­get.

Sim­i­larly, if you are rent­ing a sub­ur­ban house, make sure that it has suf­fi­cient se­cu­rity pro­vi­sions, in­clud­ing bur­glar guards, se­cu­rity gates and an alarm sys­tem – not only for rea­sons of per­sonal safety but be­cause the lack of such mea­sures can make a huge dif­fer­ence to the pre­mi­ums for your home con­tents and car in­surance.

Life­style Add up all your monthly liv­ing ex­penses be­fore bud­get­ing for rent, and then see if you can save on any of th­ese through your choice of prop­erty. An apart­ment build­ing equipped with its own gym or pool, for ex­am­ple, could save you the cost of a monthly gym mem­ber­ship. Or you might con­sider pay­ing a bit more to rent a home close to a rapid bus trans­port sys­tem or the Gau­train if that would en­able you to do with­out a car and the as­so­ci­ated ex­penses for a few years. And with util­ity costs be­com­ing an in­creas­ingly large per­cent­age of house­hold ex­penses, you need to bud­get care­fully for th­ese, based on your us­age his­tory.

Man­age­ment A well-man­aged and well-main­tained prop­erty is al­ways go­ing to make a dif­fer­ence to your over­all sat­is­fac­tion as a ten­ant, so it is im­por­tant to en­sure that the prop­erty you choose is pro­fes­sion­ally man­aged by a rep­utable company with trained and friendly staff.

Rent­ing through a company means your lease will al­ways be com­pli­ant with the rel­e­vant leg­is­la­tion, your in­ter­ests as a ten­ant will be pro­tected and any prob­lems with the prop­erty will be quickly ad­dressed.

The de­posit Many land­lords are now ask­ing for a de­posit equal to two or even three months’ rent and this can be a sig­nif­i­cant ob­sta­cle to rent­ing the prop­erty you want un­less you save up in ad­vance. Al­ter­na­tively, some land­lords now have a type of in­surance which en­ables them to of­fer zero-de­posit leases in re­turn for a 10 per­cent in­crease in the monthly rental. If this op­tion is avail­able, it might in­flu­ence your decision about which prop­erty to choose.

Sav­ings Even if you are not plan­ning to buy your own home, you will most likely be try­ing to save for some­thing - a rainy-day fund, for ex­am­ple, or an over­seas hol­i­day or try­ing to re­duce debt, and you should never be tempted to sacrifice th­ese plans in or­der to rent a more lux­u­ri­ous prop­erty than you need. — Prop­erty24

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