Financial Considerations to Think About Before Signing a Lease

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Finding an apartment or home to rent is a process that can be both fun and stressful. There are so many things to consider, like location, amenities, whether or not to get a roommate, and what is included in the price of rent.

Luckily, there are ways to prepare before signing on the dotted line of a lease agreement that can help make some decisions and the entire process of apartment hunting easier.

Most people know the most basic piece of financial advice when it comes to rented housing: the cost of rent should be no more than 1/3 of a person’s total monthly income. But this adage is only one thing to think about when looking at the monetary side of renting.

Credit Checks

Most landlords and management companies perform credit checks as part of the application process. Someone’s credit score can help landlords get a full picture of their financial responsibility and how likely they make their rental payments on time each month. 

While it’s not a guarantee, having a strong credit score may put an applicant in a better position for negotiating concessions that lower their monthly rent payments. Know what your credit score is can help narrow down your options when searching for an apartment since different buildings and landlords have different thresholds applicants have to pass in order to qualify for an apartment. If you don’t know what your score is, you can always use a free credit score check.

If your monthly income or credit score is too low to qualify for a particular apartment, there may still be an option for having a co-signer or guarantor on the lease.

All-In Costs

Not all apartments have “all-inclusive” rent. When thinking about a budget, renters should calculate the listed cost of rent with other expenses related to the apartment. These expenses include:

Application fees and security deposits
Fees for access to secured, heated, or covered off-street parking
Cost of utilities like electricity, gas, water, and trash removal
Pet rent 
Additional storage units
Laundry facilities
Telecommunication services like cable and Internet

Renters Insurance

Renters insurance policies cover a renter’s belongings in the event of theft or damage due to events like fires. These policies can also help pay for damages to property or injury to other people that occur in a rented home that a person is found legally liable for. 

Some landlords require that their tenants have proof of a renters insurance policy before they’re allowed to sign a lease. Even if it a policy isn’t required by a landlord, it’s a good idea to have one to protect yourself and your belongings. There are a number of very affordable renters insurance policies available.

Apartment Size

People who are living alone usually find themselves trying to choose between a studio or one-bedroom apartment. While many people prefer the idea of a one-bedroom, especially those for whom the price of rent is less of a concern, studio apartments can be the better option. 

In some markets, like New York City, studio apartments and one-bedroom apartments have the same square footage, but one-bedrooms cost hundreds more in rent each month just for the walls separating the bedroom from the rest of the living area.


It’s fun to think about renting in a swanky new building with top-shelf finishes and resort-like amenities, but a lot of renters end up paying a premium for amenities they never use, like saunas and country club-style clubhouses. Taking time to seriously consider whether the amenities being offered are worth the higher cost of rent can save renters thousands over the course of the lease.

Finding an affordable apartment that fits your lifestyle can be challenging, especially when you start doing all the math. But sitting down before starting your search to evaluate these considerations can help ease some of the stress and help you find an apartment you’ll love to call home.


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