I had a someone contact me letting me know that they were very much interested in buying their first home but did not yet have enough money to put down. Instead, she would rent with a roommate while saving aggressively until it was time to buy. I thought it was a good plan and I told her so. Shortly after, she sent me another email asking me what she would need to be able to rent. I guess I took for granted that many people don’t necessarily know how to prepare for becoming tenants, particularly in a big city where quality housing is rare and neither the tenant nor the landlord benefit from knowing each other in advance.
Money, lots of it – At a minimum, anyone applying for a new apartment will need first month’s rent, a security deposit and a broker fee, all equal to one month’s rent. Some landlords will also require last month’s rent. So you’re looking at between 3 to 4 times the monthly rent. In a city where the rent for a 2-bedroom apartment can be anything between $1,600 and $2,000 a month, the required cash needed up front could be as high as $6,000-8,000.
Credit Reports – Your landlord will want to now your payment history. More and more these days, entities doing business with us are using our credit history as an assessment of both our financial stability but also our character. While it may seem unfair to the person who had a once ran into hard times, chronically delinquent borrowers are bad news for timely rent payments and will have a harder time finding quality housing competing against those with better credit histories.
Background Check – Be ok with submitting to one. In some litigious and tenant-friendly states like Massachusetts, a criminal tenant can be a serious liability. Not only do they pose a safety threat to other residents in the building, the landlord knows they are jeopardizing their own safety or that of their property managers dealing with them. A landlord with a number of units in a low income area had to go to court to forcibly evict a tenant (who by the way fought every step of the way) whose son was dealing drugs right out of the apartment.
Proof of employment – Have your most recent pay stubs ready to be included in your application packet. Being willing to pay the rent (good credit history) is not the same as being able to pay the rent. You may not have been a day late with your previous landlord, but it doesn’t mean that you can afford the new rent or that you’re even still employed.