Smart Buying

6 Steps for Renting Your First Home

Know what you really want, and what you truly can afford, before signing the lease.

Moving away from home or off campus for the first time can be a harrowing experience. Here are some tips to help ease the stress of finding that perfect abode. (Disclaimer: Your first place will probably not be perfect.)

1. Figure out your housing budget.

Knowing your bottom-line rental costs is a good jumping-off point for your hunt. It will help you determine the type of place you should look for, be it a group house or shared apartment, or a live-alone studio or one-bedroom apartment.

You shouldn't spend more than one-third of your take-home pay on rent, says Debbie Kaplan, of Urban Igloo, an apartment-finder service in Washington, D.C., and Philadelphia. But if you live in a high-cost area, housing might have to occupy a bigger slice of your budget. For example, the average cost of a one-bedroom in the metropolitan D.C. area is $1,410 a month; in Austin, Tex., it's $810.

Also, be sure to budget for utilities. You can check with your area's utility companies to get cost estimates based on zip code. And while you're shopping, ask the landlord if utilities are included in the rent. If not, ask how much you can expect to pay for them each month.

Don't forget to factor in the price of renter's insurance, which can help protect your belongings in the event of theft, fire or other disaster. While your landlord likely will have insured the property itself, your belongings, as the tenant, are not covered under that policy. In most cases, renter's insurance can also help you with the cost of temporary housing if something bad happens. In most states, you can get renter's insurance for less than $200 a year. Buying your renter's policy from the same company as your car insurance policy can cut down on costs in some cases, too.

If, after adding up all of these costs, you find you need more room in your budget to cover housing, see our tips on how to build a better budget.

2. Separate must-haves from nice-to-haves.

To home in on your new home, make a list of what you really need versus what you simply want — and figure out how each item will affect your bottom line. Some things that might fall in the "must have" category: safety of the neighborhood, extra living space, parking or accessibility to public transportation and major roads. (We recommend that you try your commute during your regular travel times to figure out if it's something you can put up with on a regular basis.) "Nice to haves" could include a washer and dryer in your unit, a nice view or proximity to a favorite restaurant.

The list will be different for everyone, of course, and you'll have to prioritize what you're willing to pay more for and what you're willing to sacrifice. For example, when I was looking for a new apartment, it was important to me that I stayed in a central location, where rents were higher than in the surrounding suburbs but I could walk to work and to places I hang out. (At least I saved money on transportation!) Some of the "wants" on my list, such as an outdoor space and an in-unit washer and dryer, were less worth the cost to me.

3. Start your search online.

Now that you know how much you can afford and what you're looking for in a home, where should you start your search? Many major cities have apartment-finder services, such as Chicago's Apartment Savvy or Miami Apartment Locators in Florida, to help you find your bearings if you are new to a city. You can also get started by utilizing friends, friends-of-friends, alumni networks and social media, by putting the message out there that you are on the lookout for a new place. Craigslist is also a valuable resource when looking for an apartment or roommates (just be sure to use it safely).

Once you find some good housing options, stay online to vet them. Googling an apartment building will likely yield reviews and advice from previous tenants. Keep in mind that reviews can often skew to the negative, but they can at least bring your attention to some issues you'll want to investigate further. Sites such as and can also be useful.

[page break]

4. Continue your search in person.

Even if you're moving to a new city, try to plan a quick trip to check out places to live. If you can't, ask a friend to look for you. Or at the very least, ask landlords to send you some pictures. You need to make sure nothing is damaged and the place appears as described.

Be on the lookout, too, for evidence of bugs, rodents, water damage and other problems. They might not necessarily be deal-breakers because they can be treated, depending on the extent of the problem. But you'll want to find out about them and see if the landlord will foot the cost of dealing with them before you move in.

5. Ask questions — lots of questions.

In addition to asking about utilities, amenities and any potential issues you discovered during your search, find out the terms of the security deposit. Usually, a landlord will ask you to fork over the equivalent of one month's rent as a way to cover the costs in case you skip town or damage the apartment. But you can expect to get that money back when you move out if you leave the place in good shape. Just make sure you're clear about your landlord's definition of "good."

Ask about the length of the lease and what would happen if you broke it early. Tons of unexpected things crop up in life, especially when you're starting out — a new job opportunity that you can't pass up or just a burning desire to try something new. If you can't commit to a long-term lease or you don't think you would be able to afford the penalty for a broken lease, consider looking for a month-to-month lease instead. Or start building up your emergency fund to cover the extra cost and give yourself the flexibility to take off when necessary.

You should also find out about the landlord's maintenance protocols, rules about guests and quiet hours, and pet policies. Even if you don't have a pet yourself, it's important to know whether the guy next door is actually allowed to have three barking dogs in his apartment. Broken rules could result in fines or eviction.

6. Be prepared for a landlord's demands.

Have a list of personal references ready, and be sure to alert your references that they may be contacted. A potential landlord will probably check your credit score and may ask for a copy of your pay stub. While requirements vary, a credit score above 660 is generally considered good. If you're moving for a new job, an offer letter will usually serve as proof of income.

If you have a bad credit score or don't meet the salary standards of your potential landlord, you may still have a chance at getting into your chosen rental. You'll just need to find and provide the information of a co-signer — a guarantor, usually a parent or close friend, who will take responsibility for your rent if you can't make ends meet for some reason. Just make sure they are financially secure enough to take on this responsibility because they will be equally on the hook.

Be prepared with two checks and at least two forms of identification in case you decide to sign for your home of choice on the spot. In regions where rental units are in high demand, you won't always have the luxury of coming back to fill out paperwork.

Most Popular

Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
4 Strategies to Reduce Taxes in Retirement
retirement planning

4 Strategies to Reduce Taxes in Retirement

Don’t let the possibility of higher taxes in the future sink your retirement income plan. Consider these four ways to help manage your taxes, keeping …
May 31, 2021
12 Housing Stocks to Ride the Red-Hot Market

12 Housing Stocks to Ride the Red-Hot Market

The U.S. has a housing shortage and a love affair with home improvement, both of which could create tailwinds for this group of housing stocks.
June 8, 2021


COVID’s Silver Lining: A Calmer Life
Coronavirus and Your Money

COVID’s Silver Lining: A Calmer Life

This family left the West Coast for a simpler lifestyle in a small Cape Cod town.
May 26, 2021
Latest Stimulus Offering: $50 or More Off Your Internet Bill

Latest Stimulus Offering: $50 or More Off Your Internet Bill

The Emergency Broadband Benefit can put money in the pocket of many Americans. But the relief is temporary and limited.
May 17, 2021
Tap the Money Tied Up in Your Home with Keith Gumbinger

Tap the Money Tied Up in Your Home with Keith Gumbinger

Housing prices have been on a tear, and that means home equity is up, too. Turning that value into cash in your wallet can be complicated, though. Equ…
May 12, 2021
Home Upgrades that Pay Off
Smart Buying

Home Upgrades that Pay Off

Some affordable renovations recoup most of their cost when you sell.
April 24, 2021