Investing money in buying your very first apartment is a huge milestone, but it can easily become a mistake. To avoid this, you have to do your homework.
What should you look out for when buying your first apartment? First-time buyers should keep an eye out for a variety of factors, such as the apartment’s location, how you’ll finance it, as well as how to choose the right roommates with whom to share expenses.
Whether you’re renting or buying your first apartment, there are important things to bear in mind. Let’s take a look at eight important tips for securing your first apartment.
Understand What You’re Really Buying
Quick crash-course in apartment purchasing: it’s important to define what “apartment” really means. As SF Gate reports, the term refers to a building that’s owned by an entity and has many units that are rented out to tenants.
A condo differs from an apartment building because it can be an apartment building or a smaller amount of detached or attached units that are incorporated. How a condo works is that people must buy one of the units and share in the community costs.
What about a co-op?
This is an apartment investment that offers buyers the chance to own the apartments. It’s worth bearing in mind that the ownership actually consists of shares of a corporation that owns the building – it’s not about owning the actual apartment unit.
Knowing these differences is important when you’re interested in purchasing an apartment because they have different rights and fees.
Consider The Location
You need to check out the area in which you’re interested in purchasing an apartment so that it will be worth your while.
Choosing an area of the city that requires you to make a long commute to work every day isn’t practical. Similarly, choosing to live in an area where there’s lots of noise can prove stressful.
The apartment should be within close proximity to places that are important to you, whether that includes shops, restaurants, or schools. This will save you a lot of money on your daily commute.
Calculate Your Debt-To-Income Ratio
While you’re working on having good credit, which is vital if you want to get a home loan, you should also work out how much you can actually afford to pay for a new apartment.
You can do this by adding up your monthly debt repayments (such as student loans), and an estimate of your mortgage payment. Divide this amount by your monthly income and then turn the amount into a percentage.
So, if your monthly debts come to $2,000 and you earn $5,000 monthly, divide $2,000 by $5,000. This will give you 0.4 or 40 percent, as Smart Asset explains.
This debt-to-income ratio is used by loan lenders to help them see how much you can afford to pay on your loan. You should have a debt-to-income ratio no greater than 43 percent.
Understand The Apartment Amenities
Sometimes you might think you’re getting a great deal on your apartment only to realize that you’ve got to pay a lot of money for amenities each month.
Find out from your landlord what amenities you’ll have to pay for when renting an apartment, such as internet access, heat, and electricity, especially if these are not included in the price of your rent.
This can help you better budget for your apartment and get the amenities that mean the most to you.
What To Look For When Apartment Hunting
You’ve found an apartment that looks fantastic, but don’t be led by your heart. Focus on the following things to prevent you from making a mistake.
- Notice any water stains and general stains around the apartment as these can point to faulty structures, such as plumbing. Even if you’re renting, these can prove highly stressful and problematic to deal with in your first home.
- Keep an ear open for sounds coming from other units in the building or outside in the road. You should check out the apartment at different times of day to make sure it’s not in a noisy location.
- Pay attention to the security in the apartment and building. Look for things like easy-to-open and close windows, smoke detectors and carbon monoxide detectors, and fire escape ladders. You want to be sure that they’re stored and working properly.
- Consider how easy or difficult moving into the apartment will be. For example, is there an elevator that will make it a lot easier to move all your possessions into your unit?
Find Out If You’re Allowed To Decorate
When renting your first apartment, you’ll no doubt be excited to make it feel like a home. One of the most important ways in which you might want to do this is by decorating it. But this isn’t always allowed.
Always check your rental agreement to see if you’re allowed to do decorating, such as painting your apartment walls.
Remember that there are ways around the anti-decorating rules that might be set. For example, using removable wallpaper instead of wall paint can be a good compromise, and since it’s not permanent your landlord will likely approve it.
Ask Your Landlord About Apartment Maintenance
When something in your apartment breaks, who are you supposed to call?
Sometimes the maintenance staff of your apartment building will live on site, but other times an external service company will sort out problems. It’s important to find out how this process works, before you need help in an emergency.
Find The Right Roommates
You might want to share buying apartment expenses, but choosing the right roommates requires a bit of screening – you don’t want to end up with people who don’t contribute to rent or paying other expenses.
- Make sure you and your roommates have compatible habits and lifestyles. If you’re someone who likes to have quiet time, you’re not going to like a roommate who brings lots of friends over all the time.
- Set up a chore schedule. Whether it’s washing the dishes or cleaning the bathroom, it helps to know who’s responsible for what to prevent arguments.
- Write up a roommate agreement. This doesn’t have to be too detailed, but it should cover important things such as how you’re going to divide monthly expenses such as rent, and how you’re going to divide household costs, such as those for utilities and food.
What To Avoid When Buying Your First Apartment
Not Checking Measurements
You might have already paid the security deposit to your landlord, only to find that your furniture doesn’t fit into your apartment.
It’s so crucial to measure everything so that when you hand over that security deposit you know that you’re not going to face those problems.
Not Focusing On Essentials
When you move into your first apartment, you might think you need to buy loads of stuff simultaneously. But this can put a strain on your finances.
Rather just focus on the essentials. Taking a bit of time before making purchases will help you to think about what you really need.
Not Taking Photos Of The Apartment When You Move In
It’s important to take photos when you first move into your apartment so that you can bring any issues to your landlord’s attention, like if you find a bit of mold in the bathroom.
It also means that you have proof of what the apartment was like when you first moved in.
This can prevent arguments with your landlord, who might want to use your security deposit to repair something. If you notice problems, take photos of them so that you have proof that you didn’t cause them.
Not Showing That You’re Qualified
When you’re interested in buying an apartment, you need to have your application information, such as basic info and written references, on hand so that you show you’re qualified to get the place, as The Simple Dollar reports.
In addition, having pay stubs and bank statements will count as proof of income. Carrying these things with you when you go apartment hunting can help you to get your first home without delay.
Buying your first apartment is a big milestone, but it doesn’t have to be stressful. By knowing what things to look out for and what to avoid, you’ll make the apartment buying process a lot smoother.
How much money should you have to buy your first apartment?
Here’s a good rule: your monthly rent shouldn’t be over one-third of your monthly income. So, if you earn $3,000 per month, you’d be able to get an apartment that costs $1,000 per month, as The Balance explains.
Should you get renter’s insurance?
Yes, simply because your landlord will have insurance but that won’t cover damage to your personal possessions in the case of a flood, fire, or theft. You can expect to pay a few hundred dollars a year for renter’s insurance.Last updated on: