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Buying a house or apartment might be a dream for many of us, but fact is that more and more millennials are opting for renting instead of buying. Whether or not it has to do with the religious consumption of avocado toast, the truth remains that you need to know what you're getting yourself into before you call the number on the "to rent" sign outside your dream building.
We spoke to estate agents, Nicolette Makhathini, Marise Vrachanski, and Jonny Masombuka about what renting is all about and this what they had to say.
Apart from it being the most viable option, more people are renting to get their credit score rating up before choosing to buy. In addition to this, people opt for temporary renting (choosing to rent for a year or so) in order to save money for when they eventually decide to buy.
Your profile
There are things you need to consider before you rent a place. You need to know whether you qualify to rent a particular place or not. In addition to copies of your ID and bank statements of at least three months, you also need to submit payslips of at least three months. If you don't have three month's payslips, there is a document you can submit that confirms that you are a permanent employee at the place you work. This will be accepted according to the person who will process your contract and application.
It is also important that you are in good standing with your last landlord if it is not your first time renting, and that the condition of your previous place was left in a decent state.
Having a good credit score works in your favour, Nicolette says, and from the bank statement agents or landlords can determine how reliable you are regarding spending habits. How you spend your money determines how well you will be able to pay your rent on time.
Your budget
According to Jonny, you need to figure out what you can afford based on how much you earn. To estimate this simply, 30% of your monthly salary or wage should go to paying your rent. As consumers, we often make the mistake of signing for more than what we can pay for, so it is important that you find a place that is within your price range. You can calculate how much you can afford to rent on the Ooba website.
Location, location
The most important thing, Jonny advises, is the location of the place you want to rent. You have to look at where it is; whether it's close to schools, stores, hospitals, and such things. The closer a place is to all the necessary facilities and outlets, the more expensive it will be. But, simultaneously, you have to consider that renting a place that isn't within the vicinity of these places might be cheaper, but you might spend on transport to get to work and to the relevant amenities.
Other things to keep in mind
When you're planning to rent a place, you might be required to pay a deposit fist, often with the first month's rent. "Deposits are held for damages," says Marise. "When a tenant moves out, we do an out-going inspection; and when they move in, we do an in-going inspection," she says; therefore should the tenant damage anything between this time, then the deposit will be kept to pay for the damages.
The deposit is usually more or less the amount you will pay to rent every month. It can be refunded to you if you happen to end your lease agreement prematurely, if you have put in your notice in the relevant time according to your contract, says Jonny. In other words, if you decide to leave before your contract is over then you need to give notice beforehand according to the conditions of your contract.
When renting, an estate agent will be the one mediating between the tenant and the landlord, unless the landlord is renting the place out privately. Jonny advises that it is always better to work with an estate agent so that things go accordingly, and that misunderstandings or miscommunications are easily resolved between the landlord and yourself. If the landlord is leasing the property through an agent, then there is a fee of at least 10% that is added to the occupational rent which goes to the agent's commission, says Jonny.
READ MORE: Money advice for millennials who are struggling to save while paying off loans
Lastly, Nicolette adds "you need to keep in mind that you will not always find your perfect place; you might need to compromise on certain things and you need to know what you're willing to compromise on". For instance, you might not mind that the place you rent is further form your work place if you're main objective is to pay less for the apartment.
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