Financial Literacy for Everyone

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Looking to rent an apartment? There are a few key things you need to know before you do. The rental market is highly competitive, fast-moving and ever-changing. Before diving into the rental market, it's important to know the ins and outs of apartment rental beforehand, so you can be prepared to act quickly on rental opportunities when they arise.

Renting an Apartment

Renting an apartment can be a wise financial choice for many people. If you choose to rent instead of buy a home, it can provide flexibility, savings and relief from some of the duties associated with home ownership. And, in an economy experiencing a downturn, it can be a smart choice. Before you start visiting apartments, prepare the following documentation ahead of time:

  • Recent pay stubs or a note of employment verifying your salary, officially signed and printed on company letterhead
  • Recent bank statements and/or a recent tax return
  • Your Social Security number for a credit check
  • Government-issued photo ID (a driver's license or a passport)
  • Your checkbook to pay application fees and security deposit
  • Contact information for references

If you're certain you want an apartment, consider applying on the spot. If you wait too long in a competitive market, you may miss out.

Leases
A lease is a binding contract that lays out the conditions and responsibilities of a rental agreement, for both the owner and the renter. It includes the monthly rental price, payment due date, the length of the lease and terms for what happens if one of you breaks the lease. This contract generally outlines whether the renter or landlord will pay the utilities, the pet policy and any other restrictions and requirements the landlord wants to include.

Read your lease agreement carefully before you sign it. You will be held accountable for knowing everything included in the document. Also, keep a copy of the lease for your records. It may come in handy if you have a question about what you and the landlord are and aren’t allowed to do. A copy of the lease could also be valuable if you have a need for an attorney to review it.

Cosigning
If you have no credit history or have only just started working, a landlord may not be convinced that you are able to make your rent payments. You may be required to get a cosigner, or guarantor — someone who will share financial responsibility for the lease. If for some reason you are unable to make the payments, the cosigner will be responsible for making the payments.

Breaking a Lease
Avoid breaking a lease (moving out before the end of the agreed-on term) if at all possible. Each lease agreement has its own penalties for breaking the terms. If you must break a lease, some landlords require paying a fee, working with the property management company to find new renters, subletting the apartment or continuing to pay rent until the apartment is re-rented.

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