A full 64% of the respondents to the Mayflower 2022 Finding Home Study agree that finding the perfect home is a life goal. One of the steps you may be taking along the journey toward your forever home may involve being a tenant. And if you’re like many people, even this part of the journey is a series of smaller steps, with moves from place to place.
Renting versus home ownership has its own pros and cons. While you won’t be building equity with the money you put toward rent, you do have considerably more flexibility to come and go and — depending on the type of lease — a predictable amount to spend each month on housing costs. If you’re looking to save for the future, this can be an excellent way to budget and plan ahead.
Let’s take a closer look at rentals when it comes to Finding Home — and how to make sure this journey is still moving you up, not just out.
Set Your Goals
Really think about what you most want in your living space. For instance, is it important to have outdoor space like a yard or balcony? Plenty of light? Is an airy, open loft or a two-bedroom home your ideal or would a cute pad downtown suit you better? Do you want a door attendant, an elevator, an eat-in kitchen or a home office? Knowing your must-haves will point you toward the spaces that may be a good move up.
Make no mistake: You probably won’t get everything on your list; however, if you get your top needs met, you are headed down the right path.
Size and Location
It’s not all that uncommon to find yourself moving down in square footage to move to a better location. For instance, going from a two-bedroom suburban rental to a studio apartment in the heart of a city will almost always mean a step (or three) down in size. Will closer quarters cramp your style?
Again, it’s a tradeoff. Even if it’s less spacious, your new place might put you closer to the things that matter most to you. For some it may be proximity to work or loved ones; others may want to be “where the action is” in terms of culture and nightlife.
Aside from floorspace, your privacy will also be impacted by living in a smaller space — and you may find yourself knowing more about your neighbors’ habits than you may have intended. Unless you’re considering a detached property in a suburban or rural area, this is a factor to look into carefully. Many renters take the extra step of checking out what’s going on in their future neighborhood during the evening and especially on weekends.
Need to get rid of some stuff before you relocate due to downsizing? Check out our tips.
Age and Condition
In any given market, rentals can run the gamut from unrenovated dwellings to brand-new luxury high-rises with all the bells and whistles. Finances permitting, that deluxe apartment in the sky may have everything you want; however, it’s often a mixed bag when it comes to older spaces. A charming fireplace and built-in bookshelves often come at the expense of a dream kitchen or fully modernized bathroom. In other words, as a renter, you should be willing to compromise.
That said, couldn’t you just put in the work yourself to make the space perfect? Beyond a new coat of paint or a similar quick fix, probably not. In most rental agreements, major DIY renovations are not encouraged or even allowed. Besides, you’d be spending money fixing up a space you don’t actually own — and could wind up losing your security deposit.
Another word of caution: While most landlords inspect for damages, clean, repaint and upgrade their units between tenants, some offer apartments “as is.” Taking a unit in “as-is” condition essentially means someone hands you the keys. Then it’s up to you to take care of any problems. You may be okay with this arrangement but think seriously about whether it’s actually a deal-breaker. At the very least, you or the landlord should change the door locks.
Services and Amenities
One of the advantages of renting is that there are fewer out-of-pocket and unexpected expenses. Most well-managed rentals either have a responsible owner or a superintendent acting as a general handyperson to take care of minor fixes. Services like an exterminator are also usually provided. In most situations, it’s also up to the property owner to clear sidewalks, mow lawns, fix plumbing, solve electrical issues and provide general upkeep.
Of course, this can vary widely depending on the type of rental you have and where it’s located. In New York City, for example, major appliances like refrigerators and stoves come with the apartment. But just across the Hudson River in Jersey City, you have to find your own fridge or buy it from the previous tenant. It’s important to know what services and amenities come with the space before entering into any lease agreement.
Affordability and Cost of Living
The Mayflower 2022 Finding Home Study also revealed that 54% of all movers say that current inflation levels have made them more willing to consider moving. If saving money right now is a priority, one of the advantages renters have over homeowners is the “one price covers all” nature of lease agreements. For instance, property taxes are usually factored into the monthly rental fee. In a lot of places, heat and hot water are also included. However, if you’re thinking about relocating to a big city, be prepared to pay more for things like electricity and cable.
As we said above, a smart move up provides renters with the ability to budget and save up for the next big step. Moving to a pricey rental that will make you “cash poor” is probably detrimental to achieving the bigger picture.
Another affordability factor many overlook is the actual cost of living in their new area. Even if you’re relocating for a new job with better pay, it may actually be a move “down” in terms of the value you get for your money. There are a host of online resources for calculating cost of living by city and region — be sure you check them out.
Last But Not Least, the Lease
Most leases require you to pay a security deposit — usually the equivalent of a month’s rent — before you’re handed the keys. This is used to cover any damage you might cause during your tenancy. A reputable landlord sets this money aside and pays it back with interest when the lease is up.
Watch out for restrictions around pets, as well as the rules around having a roommate, as that person needs to be listed on the agreement. Animals like fish and indoor cats are usually negotiable; dogs and exotic animals are sometimes prohibited and could cause you to forfeit your deposit — or worse. As far as whose name goes on the lease, it is important to consider the co-signer’s reliability since you’ll be expected to pay the rent, regardless of if they do.
Fixed-term leases are great for people who know they will stay in the same place for a while. Such leases also offer security because the rent price won’t fluctuate from month to month. On the downside, breaking a fixed-term lease isn’t always easy. If you need to move before your lease ends, it could wind up being quite costly since you may have to pay for the duration of what you signed for.
Month-to-month leases allow you or your landlord to cancel at any time without penalty, as long as there’s proper notice, which should also be indicated in writing. This might work well if you’re only looking for temporary housing or plan to move again within a short window of time. The downside is that your landlord may raise the rent, cancel the lease or change other terms at any time while you’re there.
Sublet leases mean your name is not on the original lease, but you’ll be the one paying rent and maintaining the unit. This should be done transparently, with the property owner, landlord or management company fully aware of what’s going on. Our advice: Avoid the temptation to get involved in an illegal or under-the-radar sublet. Chances are you’ll be found out and possibly even evicted.
We hope your journey to finding home is smooth and successful. And remember, no matter where you happen to be in the moving process, you can count on Mayflower to be with you Every Step of the Way®.