Owning a home may be a dream for some, but renting is the reality for many. We talked to a few 20-somethings who earned their rental stripes through hard-won mishaps and misfortunes you may be able to avoid.
Do a Careful Inspection
From other less-than-stellar apartments, Lisa*, 25, learned what many her age haven’t: Train your eagle eyes before you rent. “We’re coming from dorms where you just expect everything to work,” she says. “I’ve learned that it’s very important to look over the place closely. Do the locks work? Are there cracks in the bathtub? Do you see bubbles in the paint? Could mold be starting to grow? You need to negotiate with landlords before signing a lease rather than after.”
Lisa, who rents on the East Coast, keeps pricey electronics for her work in her apartment. But damage came one day from an unexpected source: The apartment above her had a water leak, causing $500 damage—luckily covered by renters insurance—to her equipment.
Get It in Writing
Then there are 20-somethings who don’t worry about having something in writing at all. Jane*, 27, used to be one of them, but she’s now a lease believer, thanks to a deposit nightmare in Austin, Texas. “I moved into a place with other roommates, and it was under the original tenant’s name,” she says. “That tenant wanted us to give him a deposit equal to the one he had with the owner. When the time came for us to get our deposit back, he refused and said he couldn’t remember what we agreed to or how much each of us gave him. And we didn’t have anything in writing. We ended up with nothing.”
Even when you do have a lease, read the expenses part carefully. On another lease Jane says she “didn’t realize you needed to have the carpet and apartment professionally cleaned before you moved out. About $700 later, you feel pretty dumb.”
Mary*, 28, actually had roommates in Philadelphia she didn’t expect. “After I moved in, I learned there were cockroaches in the building,” she says. “It was then that I found out that I didn’t have a formal superintendent. I lived in a building with a restaurant below it, and it was actually the wait staff and lead cook who were told to help. I realized then how vulnerable I was in agreeing to live in an apartment with no formal lease or management.”
Her takeaway? “Ask about any common problems the apartment has before you sign the lease,” Mary says. “I should have asked about bugs and rodents since I was above a restaurant. Make sure you have a super, and one who will be there easily if there is a problem. You need to know someone won’t leave you hanging for days.”
Beware of Scams
Finally, remember if you don’t protect yourself beforehand, you may find yourself out of cash—and a place to live. Haley*, 25, found that out the hard way when she started searching for an apartment in New York City. “I rented from a man on Craigslist, and he was insistent that I pay all the money up front,” she says. “That’s a bad idea, even if the reason for paying upfront seems plausible.”
She had her dad check out the place and then reluctantly gave the man the money. Big mistake: “It turned out he was pulling a scam on many people and was actually getting evicted himself,” she says. “I got the money back but had to get [law enforcement] involved.”
The lesson? “Don’t be impatient,” Haley says. “If it doesn’t feel right, just move on. Do you want to live at a place that makes you feel unsure before you’ve even moved in?”
Why You Need Renters Insurance
When it comes to renters insurance, there’s no one-size-fits-all policy. A policy can be customized with the coverage amounts and additional coverages that are right for you. Here are some reasons to think about renters insurance, as well as explanations of common terms and endorsements.
Think about everything you own: Computer. Smartphone. Clothes. Furniture. TV. Just those basics are probably worth several thousand dollars. If you rent an apartment and an unexpected event—fire, theft, water leak—occurs, the insurance the landlord has covers his interests, such as repairs to the building, not yours. This means any losses or replacement costs would have to come out of your pocket.
Renter’s loss is more common than you think. Break-ins are easy, quick ways for thieves to make off with pricey goods. Electronics can be easy targets for thieves since they’re usually lightweight and often valuable. A break-in could easily result in thousands of dollars in losses.
Your apartment may be uninhabitable due to natural or manmade disasters. Many renters may not realize that the cost of temporary shelter and other essentials quickly adds up—and may be covered by renters insurance.
Accidents to non-tenants may be your responsibility. Non-ownership doesn’t exempt you from liability should someone hurt themselves while at your apartment. Renters insurance may provide assistance, including for legal fees.
An expert can help with coverage levels and coverage types. One work shirt may equal just $50; multiply that by a dozen or two, and replacement can quickly add up to a significant figure. In the age of multiple electronics per household, anything lost or stolen may be pricey too.
Review the type of coverage. Replacement coverage also helps counter the decrease in value of your possessions. Even if your old couch or laptop is only worth a few hundred dollars now, replacement coverage could help you replace important items at new retail value.
What about additional coverage? Additional renters insurance coverages can include:
- Protection related to a business you operate out of your rental that is eligible for incidental business coverage.
- Increased coverage for specialty items including extensive computer equipment and expensive jewelry.
- Liability tailored to your individual worth. A slip-and-fall or other accident may result in a costly court judgment.
Common Rental Terms
Know the language and the limitations before you sign the lease.
Rent: This also includes acceptable payment types and late-fee terms.
Deposits: Make sure your lease specifies the dollar amount, use, and requirements on return.
Tenants/Occupancy Limits: Don’t let a friend couch-surf to cut the rent. Failure to list any and all tenants may be cause to terminate a lease. And letting someone illegally stay absolves them of financial responsibility.
Pets: If your lease doesn’t allow them, don’t have them. You both could find yourselves on the street.
Repairs/Maintenance: Know what you are liable for, how to alert the landlord to repairs and reasonable time limits for updates. TERMS: A lease has termination dates, typically a year or month-to-month.
Utilities: Understand what the lease covers and what it doesn’t—snow removal, lawn mowing, leaf raking. Your lease may also discuss whether utility rate increases may be passed along to you.
Landlord Right of Entry: Your landlord must specify when he or she is legally entitled to be in your rental and whether or not you have the right to be present.
*Names withheld to preserve privacy.