Your First Apartment

1. Your First Apartment • On one side of a piece of paper make a list of everything you would want in an apartment…. cost is NOT a factor, but you may not have a roommate. • Look through an apartment guide or online at www.move.com and find an apartment that closely matches your list. • Cut out or print and mount on paper. • Reflect in writing how you feel about this apartment selection.

2. Objective 2.02ANALYZE financial and legal aspects of renting.

3. Landlords and Tenants • Landlords are owners of property. They expect the tenant to: • Pay rent on time • Keep property in reasonable condition • Tenants are renters. They expect the landlord to: • make necessary repairs to the property • Give written notice to enter the unit • Not increase rent until the lease ends.

4. Lease • The legal document signed by landlord and tenant • Includes: • Length of agreement • Amount of deposits, rent, fees, when rent amount can be changed • Address of unit • Who pays utilities • Number of people that can live in the unit • Pets (types and sizes).

5. The Rental Process • Application and Application Fee • Fee for filling out the application • Landlord knows you are serious • Usually $25-$100 or higher • Credit Check • Tells if the tenant is pays bills on time • Checked through a credit agency and is confidential.

6. Security Deposit: • Covers cost for any future damage to the property other than normal “wear and tear” • May equal 1 or more month’s rent • Can be returned partially or in full • Pet Deposit • Covers damage made by pets.

7. Advance on Rent • Landlord requires one or more month’s rent in addition to the security deposit • Renter’s Insurance • Insurance to cover the renter in the event of flood, fire, theft or any other hazard • VERY inexpensive.

8. Utilities • Water, gas, sewer, electricity, phone, cable, trash collection • Sometimes the landlord will pay some or all utilities, BUT usually the tenant pays all.

9. Ending a Lease • Suppose you need to move earlier than expected. What are your options? • Continue to pay the rent until the end of the lease • Assign the lease • Sublet the lease.

10. Assigning the Lease • This means to transfer the remainder of the lease to another person • The original tenant is NO LONGER responsible for any rent or damages.

11. Subletting a Lease • Tenant leases the property to another person • BOTH tenants are responsible to the landlord • EX: college student leaving for semester abroad and lets friend rent apartment.

12. Results of Violating the Lease • Breach of Contract • Failure to meet the terms of a lease • Both tenants and landlords can be in breach of a contract • Eviction • Legally removing tenants from the property before the lease expires • May only start proceedings after the tenant has failed to meet the terms of the lease • Tenant must receive written legal notice of eviction.

13. How Much Rent Can I Afford? • In general your housing should not exceed 28% of your gross monthly income.

14. Max Monthly Rent • Gross income x .28 / 12

15. Calculating Rent if Paid by the Hour • Hourly wage x # of hours worked weekly x weeks in year = gross pay yearly / 12 months = gross monthly wage x 28% = maximum rent • Example: • $6.00 x 40hours = $240 • $240 x 52 weeks = $12,480 • $12,480 /12 = $1040 • $1040 x 28% = $291.20

16. Weekly Income = $240 • If paid by week: $240 x 52 weeks = $12,480/12 = $1040 x 28% = $291.20 • If paid by the month: $1040 x 28% = $291.20 • If paid by the year: $12,480/12 = $1040 x 28% = $291.20

17. So, how much can you really afford? • Choose your annual salary • Calculate your monthly salary needed for you to be able to afford the apartment you chose • Look back at your “want list”. Are there items you could live without in order to afford a less expensive apartment? • Reflect in writing how you feel about making changes to your “want list” selection.