Before setting out to rent a home, you need to know how much rent you can afford to pay each month – and that’s not quite as simple to work out as it may seem.
“Financial experts will say you shouldn’t spend more than a third of your gross monthly income on rent,” notes Andrew Schaefer,MD of leading national property management company Trafalgar.
However, this does not take into account the fact that many prospective tenants are also trying to save the deposit for a home of their own, or the fact that the escalating costs of utilities and transport can have a big influence on the size of property they rent, or the location they may choose.
But although every situation will be slightly different, he says, there are certain factors that all renters need to weigh up before signing a lease.
For individuals who work long hours, a loft apartment close to the office may be a smarter choice than a townhouse in the suburbs, even if it is somewhat more expensive to rent, because they will save on commuting time and the associated costs. And if there are shops, restaurants and recreation facilities close by, so much the better.
Similarly, those with school-going children may be prepared to pay more to rent in an area close to top-rated government schools because that is still cheaper than paying private school fees.
A family of four or five obviously requires more living space than a young couple and even though a rental property may not be a permanent living option, it should have enough space for everyone to feel comfortable.
On the other hand, bigger properties generally cost more to rent, and more to run in terms of water and electricity usage, so families who are trying to save should be careful not to rent homes with more space than they actually need. They should also make sure that the rental property has its own electricity and water meters, so they don’t end up paying for anyone else’s usage.
Always check out the whole area surrounding a block of flats or housing complex before you sign a lease. Don’t put yourself in harm’s way just to secure a lower rental – rather pay more to be safe, even if it means you have to cut something else out of your budget.
Similarly, if you are renting a suburban house, make sure that it has sufficient security provisions, including burglar guards, security gates and an alarm system – not only for reasons of personal safety but because the lack of such measures can make a huge difference to the premiums for your home contents and car insurance.
Add up all your monthly living expenses before budgeting for rent, and then see if you can save on any of these through your choice of property. An apartment building equipped with its own gym or pool, for example, could save you the cost of a monthly gym membership.
Or you might consider paying a bit more to rent a home close to a rapid bus transport system or the Gautrain if that would enable you to do without a car and the associated expenses for a few years.
And with utility costs becoming an increasingly large percentage of household expenses, you really need to budget very carefully for these, based on your usage history.
A well-managed and well-maintained property is always going to make a difference to your overall satisfaction as a tenant, so it is important to ensure that the property you choose is professionally managed by a reputable company with trained and friendly staff.
Renting through a company like Trafalgar, for example, means your lease will always be compliant with the relevant legislation, your interests as a tenant will be protected and any problems with the property will be quickly addressed.
Many landlords are now asking for a deposit equal to two or even three months’ rent and this can be a significant obstacle to renting the property you want unless you save up in advance. Alternatively, some landlords now have a type of insurance when enables them to offer zero-deposit leases in return for a 10% increase in the monthly rental. If this option is available it might influence your decision about which property to choose.
Even if you are not planning to buy your own home, you will most likely be trying to save for something – a rainy-day fund, for example, or an overseas holiday – or trying to reduce debt, and you should never be tempted to sacrifice these plans in order to rent a more luxurious property than you need.
“How Much Rent Should You Pay?” was issued by the Trafalgar Property Group – http://www.trafalgar.co.za/