Articles and advice about renting an apartment


Just like when you go house hunting, it’s important to develop a list of needs (must-haves) and wants when shopping for an apartment. Similar to owning a home, location matters – most likely you’ll want shopping and transit close by.

When developing your list of needs and wants, it’s important to be flexible. If you’re looking for the perfect apartment with everything on your wish list, you could be looking a very long time. Here is a list of things to consider before signing the lease to help you find the right apartment.

Number of bedrooms

The last thing you want is to feel crammed in your new apartment. When hunting for an apartment, it’s important to choose a place with enough space for your family and you. If you’re expecting a child, it might make sense to choose a larger place now, rather than having to move once your child is born.

Home sweet, home

Are you a light sleeper? One of the biggest complaints of apartment dwellers is noise levels. If the walls are paper-thin, you can have a tough time catching some shuteye at the end of a long day. It’s a good idea to visit the apartment at night to see how noisy it is. You can also ask neighbours if there have ever been complaints about excessive noise. The last thing you want to do is move into an apartment when you can’t get any peace and quiet.

Entertaining

Do you host a lot of social gatherings with your friends and family? How sociable you are can have a big bearing on the apartment you choose. For example, if most of your friends live downtown, they may be less willing to stop in if you decide to pack up and move to the suburbs. Does your apartment have noise restrictions? The last thing you want to do is upset your fellow neighbours and face eviction for excessive noise.

Amenities

Apartments come in all shapes and sizes. Are you looking for a no-frills apartment with just the basics, or would you like an apartment with all the bells and whistles? You can find nice upscale apartments with gyms, pools, and billiard rooms. Before signing the lease it’s important to ask yourself how often you’re going to use these perks. If you only end up going once, you’ll kick yourself for paying a higher rent the rest of the year.

Safety

How safe do you feel in your new apartment? You don’t want to worry about arriving home late at night. Some apartments offer 24-hour security, while others you’re on your own. If safety is a concern, it’s a good idea to ask before you move in and find out you’re on your own.

Before signing on the dotted line of a lease agreement, it’s important to sit down and figure out how much you can realistically afford to pay towards rent. Landlords often want you to sign a year’s lease just to secure an apartment. The last thing you want to do is commit to a beautiful apartment in writing, only to find out it’s outside your budget. If you dedicate too much of your monthly income towards rent, you run the risk of running into cash flow issues down the line.

Understanding the rental market

Similar to when you purchase a home, there’s room for negotiation, as rental prices are usually not set in stone. When determining how much you can afford in rent, there are three prices you should familiarize yourself with: what you feel you can afford to pay, what local landlords feel renters can pay, and the average rent of apartments in your neighbourhood. Although the rent price you can afford depends on your income, it also matters what stage you are in life. For example, if you have a spouse who is about to go on maternity leave, you should be prepared to survive on a reduced household income.

Housing Affordability Ratios

It’s important to not get in over your head when you’re renting. You don’t want to end up becoming a slave to your landlord. Two ratios that homeowners will be familiar with are handy for renters as well.

Gross Debt Service Ratio

The Gross Debt Service (GDS) Ratio looks at how much you can afford to pay in rent each month. Instead of taking your monthly mortgage payment, property taxes and utilizes, you can take your monthly rent and divide it by your gross monthly income. You should aim for a ratio of 32 per cent or lower, although that may be harder to achieve in higher priced rental markets like Toronto and Vancouver.

Total Debt Service Ratio

The Total Debt Service (TDS) Ratio takes the GDS Ratio a step further. It looks at how much you can afford to pay in rent each month, when you include your monthly debt obligations. For example, you may have an outstanding credit card balance, car payment, student loan, or line of credit owing. To calculate your TDS ratio, you take your monthly rent and debts and divide by your gross monthly income. You should aim for a ratio of 40 per cent or lower.

Choosing your new neighbourhood is one of the toughest decisions homeowners and renters face. Although it’s a lot easier to move when you’re renting, most landlords want you to sign a year lease – this means you could be stuck in a single location you end up not liking for an entire year. Instead of moving to a location and realizing you hate it, it’s a good idea to do some research ahead of time. Let’s take a look at some factors to consider when choosing the right neighbourhood.

Amenities

A lot of renters forget to consider amenities when moving into a new apartment. The last thing you want to find out is the closest supermarket is three miles away, especially if you don’t own a car. To avoid being disappointed by your neighbourhood-to-be, why not give yourself a “day in the life” of the neighbourhood? Before you move in, spend a day there to see how much you like it. Check out the local coffee shop, library, grocery store, and pharmacy.

How long you plan to live there

Your considerations will be a lot different depending on how long you plan to stay at an apartment. For example, the considerations of a student just planning to stay somewhere for four years while they finish their undergraduate degree will be a lot different than a family looking for a long-term place to raise their children.

Another thing to consider is your hours of work. If you work irregular hours like night shift, evenings and weekends, amenities and location may matter less to you. Why spend a ton of money to live in a prime location when you’ll be at work and miss all the action?

Commuting

Not only does location matter from an amenities perspective, it matters for your commute. Even if you own a car, commuting can end up being a nightmare. The last thing you want is to be stuck in a traffic jam travelling at a snail’s pace to work. To avoid this you should take the time to travel to work during rush hour and see how long it takes you – at least there won’t be any unpleasant surprises when you move in.

If you don’t own a car, commuting can be even more vital. Some locations have great public transit, while others not so much. Some questions to ask include: is the subway or bus stop nearby? How long will it take you to get to work? How packed is the subway or bus? The last thing you want to do is travel on an overcrowded bus or spend 20 minutes waiting for a bus with enough room to let you on.

The landlord-tenant relationship is similar to marriage. More than likely you’ll be living under the same roof as your landlord. Some landlords are laid back and leave you alone, while others may be controlling and complain at the slightest noise.

Before you sign the lease, it’s important to get a feel for your landlord. A good landlord-tenant relationship will be beneficial to everyone. Here are some questions to ask prospective landlords before signing a lease.

Is the apartment in good shape?

Once you step foot inside the apartment, you should be able to see if it’s in good condition, or if you should look elsewhere. If you’re still interested once you step inside, it’s important to ask how you would handle repairs. You may be a careful tenant, but accidents are bound to happen, it’s just a fact of life. Whether it’s a leaky faucet or electrical problem, you’ll want who to contact and that your request will be taken care of in a timely manner.

How is the water?

Don’t you find it annoying when you’re having a shower and suddenly you run out of hot water? To avoid this situation, it’s important to ask about the water heater in the rental unit. The last thing you want to do is to be forced to take a shower in cold water just because your neighbours used up all the hot water.

Water pressure is another concern for a lot of tenants. When you’re having a shower, you probably want the water to come out full blast, rather than a trickle. By asking about water pressure ahead of time and testing out the shower and taps, you can find out if the plumbing is up to par.

Are the utilities inclusive?

It’s important to ask if you’ll have to pay for any utilities on top of your monthly rent. Utilities include gas, electricity, and water. When you’re renting in an apartment building, your utilities will more than likely be included in your rent, but if you’re renting part of a house, the homeowner may ask you to pay a certain percentage of the utilities based on the size of your living space and the number of people. Some apartments even include cable and telephone as part of the rent if you’re lucky.

How are the appliances?

Nothing can be more annoying than cooking a meal in an oven that takes ages to head up. The only thing worse is a fridge that doesn’t keep your food cool. You’ll want to inspect the appliances in an apartment and see if they’re in working order.

Is laundry included?

Hauling your clothes off to the laundry mat is no fun. Not only is it time consuming, it’s expensive. To avoid this inconvenience, it’s important to ask if laundry is included. Landlords often allow you to pick days you can do your laundry. Be sure to find out if your laundry is shared or separate. There’s nothing nicer than having your own stackable washer and dryer in your apartment.

Most people strive to be homeowners, but does owning a home always make sense over renting? Not necessarily; there are cases when renting can make the most economic sense. For example, if your job has you constantly on the move, it probably doesn’t make sense to purchase a home.

Buying and selling too often can be a drain on your finances because of the transactional cost of really estate. Every time you buy or sell a home, you have to pay closing costs. Closing costs can amount to anywhere between 1.5% and 4% on the typical home. Let’s take a look when it can make sense to rent rather than own.

Your finances are unstable

Income stability is one key factors lenders look at when approving you for a mortgage. If you hop from employer to employer and haven’t held a job longer than a year, you can have a tough time obtaining a mortgage.

Self-employed individuals are another group where it can make sense to rent instead of buying. Your business is your livelihood; if times are tough, you may have to cut your expenses to the minimum to meet your mortgage payment. Not to mention the fact that you have to jump through a lot of hoops to qualify for a mortgage.

Commission sales people are another group of people who might think twice about owning a home. If over 50 per cent of your income is from commission and it fluctuates on a monthly basis, when times are tough it can be difficult to come up with the extra money for your mortgage payments.

The rental market is good

With home prices skyrocketing in cities across Canada and rent rates relatively stable, it can make sense to rent purely from a dollars and cents perspective. Canadian real estate has benefited from a boom due to record low interest rates, but what happens when the Bank of Canada starts increasing the overnight lending rate and lenders follow suit with an increase in prime rate? If you’ve paid top dollar to purchase a home, you could actually see your home value fall. It doesn’t seem like such a good investment now, does it? Although there’s no guarantee this will happen, a lot of prospective homebuyers are deciding to sit on the sidelines to hopefully wait out the housing boom.

You’re not ready to own a home

With homeownership come great responsibilities. If you’ve never owned a home before, you can be in for a rude awakening. Owning a home isn’t cheap; besides the monthly utility bills, which can fluctuate, another major expense homeowners face are repairs and maintenance. Are you ready to put money aside to budget for a new roof or furnace? Besides expenses, there’s also the yard work that comes with owning a home. Are you prepared the mow the lawn and shovel the driveway during winter? If you’re unsure perhaps homeownership isn’t right for you.