Moving to a new city is always exciting, meeting new people, having new opportunities, and a different lifestyle. Whenever you are moving out or shifting due to a change of workplace or for university or just moving to a much bigger place, renting is always a good idea. Although it may include paying study deposits and having a fixed amount for expenditure per month. But it is suitable for the people with fixed salaries.
To make your move effortless and financially easier, make these five smart financial moves before renting a property!
1) Have a Good Credit Score:
Agents will run a credit check before letting out their property to you, and if your credit score is not very good, there is a chance the landlord could refuse to rent out the property to you.
To improve your credit score:-
- Pay your bills on time.
- Clear your outstanding debts.
- Keep balances low on credit cards and other revolving credit.
- Open new credit accounts only as needed.
- Don’t close unused credit cards.
- Don’t apply for too much new credit leading to multiple inquiries.
Start working on your credit score eight to ten months before you start looking at rentals. The sooner, the better.
2) Zero Deposit Guarantees:
A Zero Deposit Guarantee replaces the traditional security deposit. It allows you to rent a property without paying a huge deposit allowing you to have extra money to pay for more stuff.
- You have to pay the equivalent to 1 week’s rent.
- It is more affordable and easier for the tenants.
- It is faster than the traditional means.
- The best thing is, any disputes will be handled by TDS, ensuring a fair and just outcome.
How does it work?
- Purchasing a guarantee
- You opt to get a Zero Deposit Guarantee in turn for your security deposit. If you already live in a rented property, speak to your agent about beginning the process of releasing your deposit.
- The tenancy ends
- If there is no impairment or unpaid rent at the end of the tenancy, then the Zero Deposit Guarantee will culminate, and there is no further action necessary.
- Damages or unpaid rent
- If there are any impairments or unpaid rent at the end of the tenancy, you’ll still be liable to pay for them. Any disputes that cannot be resolved with your landlord will be referred to TDS for adjudication.
3) Contents Insurance:
Insurance coverage of house contents is not obligatory, yet most of us would find it hard to re-purchase these precious items if stolen or damaged by fire or a flood. Therefore, it becomes essential to ensure these contents in your home along with your home insurance. A comparative study can find an ideal combination of home and contents insurance. However, before getting the insurance, it is essential to understand the content insurance cover concept.
Contents insurance protects your possessions. As the name depicts, an insurance policy that layout provision to house contents from loss or impairments by theft or attempted theft, fire, explosion, lightning, or earthquake. in the event of loss or damaged due to theft, robbery, burglary, flood, earthquake, water leakage, storm or flood damage.
Insurers specify ‘contents’ as “the sort of things you would carry with you if you were to move to a new place.” These contents include clothes, money and jewelry, furniture, and electrical items. Particular plans in contents insurance also provide protection with respect to fixtures such as carpets and curtains.
Tips for low-cost content insurance:
- i) Get house and content insurance quotes comparison from various agents.
- ii) Make an annual payment of premiums as monthly direct debit can often lead to additional charges
iii) Reduce your premium if you don’t need additional covers
- iv) Buying both home insurance and content insurance from the same insurer will get you a better deal
- v) At the time of policy renewal, earn no claims discount if you haven’t filed for any claim with your insurer.
4) Start Saving:
Saving money, or the “saving habit,” is the foundation of all financial success. Saved money is what provides the means for you to take dominance of situations—whether it’s going back to college, establishing a new business, or buying shares of stock when the market crashes.
- Open a separate bank account for a rainy day.
- Start accumulating what you can spare.
- Having money kept aside helps you live freely instead of burning a hole in your pocket or living on a tight budget.
- Pay all your debts before starting to save.
- Start as early as possible.
- It keeps you prepared for your rental payments, deposits, and agent’s fee.
“Don’t save what is left after spending; spend what is left after saving” is the advice given by the world’s most successful investor Warren Buffet. We can’t exaggerate the importance of saving money.
5) Accounting Your Living Expenses:
Accounting for your expenses is the primary step when you start saving. Living expenses are expenditures required for basic daily living and sustaining good health. They include housing, food, clothing, healthcare, and transportation. Comprehensive what’s involved in each of these domains will help you to budget for them.
Here’s a complete living expenses list:
Housing: Whether you rent or own, these are the regular expenses, together with some you may not be aware of:-
- Contract payment or monthly rent
- Utilities (i.e., electricity, gas, trash removal)
- Insurance (i.e., homeowners or renters)
- Property tax
- General maintenance (i.e., lawn mowing, snow removal)
Food and grocery: Apart from your daily meals, consider other living necessities.
- Food and beverages
- Personal care items (i.e., shampoo, toilet paper, bandaids)
- Cleaning supplies
Clothing: From your work clothes to night robes, ensure you account for everyone in your family.
- Daily clothing
- Formal wear
- Boots, shoes, and coats
Healthcare: Remember to include expenses for your primary doctor, dentist, and other specialists.
- Insurance premiums
- Office copays
- Pharmacy copays
- Over-the-counter items
Transportation: Whether you take the bus or drive a car, add up your regular transportation costs.
- Car payment
- Car insurance
- Public transportation tickets
- Taxi costs
- Parking fees
Miscellaneous: Some living expenses don’t fit a specific category but still need to be in your budget.
- Cell phone bill
- Baby or child necessities
While there are likely other reappearing costs in your life, they might not be considered as a living expense. For example, leisure activities and entertainment aren’t living expenses. That means your gym membership and Netflix subscription should be regarded elsewhere. You’ll also want to ensure your budget includes any debt repayment, such as for a student loan.
- Based on these, which are quite consistent, decide your budget, or you can even downgrade some of them to save more.
- These costs give you an idea of the range of rental properties to consider.
- Find a place slightly below the actual budget. That way cost of living clubbed with rent will work out to your original budget.
Renting a place is much more accessible and affordable for many people, especially those with transferable jobs. Keeping all the points mentioned above in mind, it won’t be difficult for an individual to shift and rent a place. Keep your budget in hand and start looking for your next house.
Ankita Kaushal is working as a blogger for Veronica Karas. Veronica Karas is a Certified Financial Planner in NY. She helps with Complex financial issues like stock options, estate planning, tax & financial planning and more. Get in touch with her now for any assistance regarding Financial planning.