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How Much Rent is Too Much Rent?


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You want what every apartment renter wants: the most comfortable
surroundings you can get for the lowest possible monthly rent.
Some of today’s newly constructed apartment communities have
taken luxury to an entirely new level. Some complexes have gas
fireplaces, TV monitors by the front door, drive-through mail
service, and office equipment for their tenants, among other
creature comforts. Every renter has to consider the importance
of amenities like these. Are they important enough to you to
merit a rent increase of perhaps $200 more than the rent you pay
now, at a modest yet affordable complex? While some of us
consider an apartment as just a place to hang one’s hat, others
place a premium on home surroundings. But how do you determine
how much you can stretch your budget — without ending up in the
poorhouse in the process?

One suggestion, provided by Metropolitan Life Insurance Company,
is to spend no more than 25 percent of your monthly gross income
on your rent. For example, if your annual salary is $30,000 per
year, or $2,500 per month, you shouldn’t plan to spend more than
$625 per month on rent. And although it goes without saying,
it’s important to remember that the extra money you allocate for
rent in a slightly more upscale complex means less money for
your other expenses — utilities, loan payments, entertainment,
food, and most important, savings.

Here’s a short checklist of factors, provided by Florida-based
Apartment Hunters, that you’ll want to consider when checking
out a neighborhood. Of course, some of these factors may mean
more to you than others, and you may want to consider some
additional factors of your own.

* Is it close to your place of employment? * Is the
neighborhood safe? * Is it close to a good school system? * Is
it close to your church? * Is it close to stores, banks and the
post office? * Is it close to public transportation? * What are
the parking regulations (if you own a car)?

First-time apartment renters share one thing in common: surprise
at just how many hidden expenses they encounter. Hiring movers
and paying your first month’s rent only represent two small
pieces of what can be a rather expensive pie. In addition,
you’re going to be subjected to a credit check, and you’re
required to prove that your gross monthly income is at a certain
level, in order to provide your complex with some degree of
security that you can pay your rent each month. So if you’ve
overestimated your financial abilities in the past, either
failing to make rent payments or credit-card payments, now is
the time when that history could come back to haunt you. Here’s
a brief run-down of some of those hidden expenses — and
pre-move procedures — of which many renters either aren’t
aware, or that they overlook in the excitement and bustle of
moving:

Security deposits. Security deposits range from $100 to a full
month’s rent; the average deposit is approximately $250. Some
apartments require separate deposits for roommates. Credit
application fees are generally $10 to $35.

Verifiable income. Verifiable gross monthly income is at least
three times the monthly rent. For example, a rent of $500 would
require a minimum of $1,500 gross monthly income.

Credit check. A credit check will be conducted by the apartment
community or management company representing the community.

Rental history. Any previous rental history will be verified,
and mortgage payments may be included as rental history.
Additionally, some communities are also conducting criminal
background checks.

Leases. All apartments require a written lease. Lease terms
typically are seven to 12 months. Most leases are written for 12
months. Shorter lease terms and month-to-month options often are
available at premium rates.

Utilities. You rent will often include sewer, water, trash, and
pest control. Gas and electricity are almost always paid
separately by the tenant.

Pet deposits. Although many apartment complexes allow pets, they
require residents to pay dearly for the privilege of setting up
house with Fido. Pet deposits are stiff, and tenants are charged
per pet. Deposits range anywhere from $100 to $300 per pet, and
either all or a portion is nonrefundable. Some complexes charge
additional rent for pets — on top of the deposit. Pet size is
commonly restricted to 20 pounds and 12 inches in height,
although some communities do allow larger pets.

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  • Posted On April 11, 2006
  • Published articles 283513

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