6 Financial Mistakes To Avoid As A First-Time Renter

September 12, 2023

Around 8 out of 10 people in the country live on rent rather than owning an apartment or a living space. The rental market is growing and is daunting more than ever.  Calling a place your home could be a daunting experience. It is because finding the right location, surrounded by the facilities you need, is slightly cumbersome and challenging. It is where the individuals make mistakes. One of the biggest mistakes that they commit is- not budgeting enough for the apartment.

While doing so, it is important to have a realistic budget in mind. This is because expenses like electricity, gas, cable and water could quickly add up. On top of that, moving costs, furniture purchase and repairs consume the most of your salary.

Thus, it is important to budget flexibly for the rental payments. For this, you must avoid unnecessary overhead expenses. The blog lists other mistakes that you must avoid as a first-time renter.

What financial blunders should you avoid if renting for the first-time?

Undoubtedly, finances spill through the cracks while renting for the first time. Individuals, unknown about the whole thing spend more than they ought to.  Eventually, it disrupts other critical aspects of the budget. Thus, if renting for the first time and want to hold the financial strings tight, have a quick peep into the mistakes below:

1)      Not having tenant insurance

It is one of the most common mistakes that renters commit. What if the property you reside in, is disrupted due to a natural disaster or a landlord’s mistake? Would be responsible for the loss? No. But how can you legally claim the compensation?

 Yes, by having tenant insurance. It lists and safeguards you from interference with the property that does not involve your participation or consent. Thus, have tenant insurance to cover unexpected loss or damage to the property hassle-free. Otherwise, it becomes troublesome to manage.

2)      Missing budgeting for holding deposits

Holding deposit is the money the landlord asks for as a token of confirmation to rent the property.

Under this, they cannot ask for more than 1 week of the rental costs. If they do, you can ask for a refund legally. Moreover, avoid doing so if you have any queries or concerns regarding the property.

After that, you legally own the property. The landlord, however, returns the amount after one week of moving into the rental. However, he may deny doing so if:

  • You provide misleading personal information
  • You do not provide the complete amount as a holding deposit
  • Do not move the property after confirming your take
  • You do not meet tenancy agreement guidelines

Thus, every landlord charges one at the beginning of the agreement. One must prepare and budget for the same before moving in. It would help you avoid surprise costs.

For example, if your monthly rent is £15000, your weekly pay would be £3750. It is your holding deposit that you must pay the landlord.

If you presently lack the amount due to constant involvement in – managing debts to boost credit, moving costs, rent deposit, etc., options like very bad credit loans with no guarantor from a direct lender may help. With this, you can finance the critical payment without third-person involvement hassle-free. Individuals with regular income can clear the dues at affordable and small payments.

3)      Buying brand new furniture

According to an expert “Buying brand-new furniture in a temporary living space does not make sense.”  It does not imply that you should not live the way you want, but just limit the expenses. It would help you save much and help you own your home/ property later.

Thus, instead of buying a new one, you can seek the best-used furniture at half the cost. You may get some in good condition if you check for the same at antique stores.

Moreover, you may spot some for free! Check the Facebook marketplace and gauge the authenticity of the advertisement. If the person on the call is genuine, contact them immediately and get one home.

4)      Not recording the apartment’s condition

Another mistake that first-time renters commit is not saving the or noting down the repairs required on their visit. They keep it on hold until moving in. Thus, one must avoid the mistake of not inspecting the property thoroughly before signing the rental agreement.

Analyse the things that require immediate repair like- plumbing issues, chipped walls, broken window panes or latches. Furthermore, click the images of the improvements required.

Discuss these with your landlord and avoid any additional expenses on the go. Moreover, if you engage in any dispute, you can click the existing issues in the property that you did not complain about and win over them. But it is most important to do so in the beginning because if it exists before moving in, the landlord would be responsible for the same solely.

5)      Skipping the additional fees landlord charge

Identify whether the landlord charges additional fees apart from rent, electricity and water bills. For this, you must read the fine print in the agreement. Usually, one skips going through the expenses part and ends up paying bills and costs apart from rent.

You must avoid that mistake by asking about the same from the landlord. A genuine one would help you know the costs involved with the rental agreement. It would help you budget accordingly. Alternatively, if he asks for the bills out of nowhere, it may impact your budget.

If anything of that sort happens, do not panic. Check the available savings with you and prioritise expenses. If you share inflexible finances, contact Florafinance as a financial advisor for a suitable solution. It may help you with the best cash help for short-term financial hiccups.

6)      Not checking the Deposit Protection scheme

 According to a 2007 law, the landlords and managing agents must place the deposit that a renter pays towards a Deposit Protection Scheme. It is an authorised scheme that grants landlords the security they need on their rentals. The same agreement guarantees that the landlord must pay the deposit by the agreement’s end or if the renter desires to leave.

In the same vein, the landlord must tell you the scheme that your deposit belongs to. He may enter your deposit in any of the 3 schemes and provide a clear outlook. These are:

  • The Deposit Protection Service
  • Tenancy Deposit Solutions Ltd
  • The Dispute Service

If your landlord or agent fails to provide you or denies the deposit after leaving under any of these, they must pay 3 times the deposit amount as a penalty.

Bottom line

Rental agreements are a legally binding agreement. Thus, you must understand every aspect before signing in pursuit to become an ideal tenant for the landlord.  It would help you avoid unwanted surprises down the lane and finish off the agreement legally.

With proper planning and knowledge, renting property gets smoother.

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