How much can you really afford? In most
countries when you are looking for an apartment to rent, the starting
point is to take a realistic look at your budget. The best way to do
this is to track your expenses for a month; place your net income into
one column and list your potential expenses such as groceries, utility
bills, eating out and entertainment; Of course you must also include
other household items such as kitchen utensils, appliances, and
furniture in your budget; these costs quickly add up.
Once expenses are tracked and
documented before rent, this amount is deducted from monthly earnings.
It only after this that one can look at what’s left and consider how
much you can realistically spend on rent. Ideally your rent should be no
more than 25 to 30% of your income to leave you with enough for other
expenses, debt payments and some savings.
In Nigeria, it is not as
straightforward as this; even though income earned is based on monthly
instalments, tenants have for decades been forced to pay landlords their
rent one or two years in advance. This inevitably means that for those
who are not fortunate to be in full time employment and where a housing
allowance is paid in advance, are forced to borrow their rent money and
then seek to pay back monthly from their salary. It is expected that
with recent legislation that seeks to prosecute landlords who collect
rent in excess of one year in advance from new tenants, landlords will
have to be more accommodating of their tenants.
Rent is not the only expense associated
with a new apartment. Your landlord may ask for a security deposit,
which will be held until the tenancy comes to an end. It can be a bit
tedious to carefully go through the inventory but if you don’t, you
could be leaving yourself open to forfeiting part or all of your
deposit. If you leave at the end of the lease with the apartment in
perfect order, your security deposit should be refunded in full; the
landlord should only hold back part of it if the property has incurred
some damage. There is also the estate agent’s and legal fees to pay.
It is extremely rare in this environment
to find an apartment where utility costs such as water and electricity
are included in the rent. Most landlords will apply a separate service
charge to take care of such expenses as well as for maintenance and
repairs of common areas. A most unfortunate trend has developed and it
is anyone’s guess how much one might end up spending in a year, as
diesel costs can be unpredictable.
The old adage “Location, location,
location” usually refers to buying property, but when you are looking to
rent a property, this is also a major factor. Determine the best place
for you to live in relation to where you work; the farther away you are
from work, the higher your transportation costs will be. At the same
time, If you work in a major business district you will find that the
housing costs decrease the farther away you live. The key is to find a
balance between the two.
The best way to get a feel for an area
is to visit it and to consult people who live there. Look at several
apartments in different neighborhoods in order to see what is available
within your price range. For most properties you will find that you can
quickly determine whether or not it is for you.
You must fully understand your
responsibilities as a tenant. Make sure you keep strictly to your side
of the bargain. If you don’t pay your rent when it is due and are always
full of excuses, you could damage the relationship with your landlord
or agent. This has implications as you may struggle to obtain a
reference from your landlord, which a new landlord might request for.
Getting your finances sorted out properly and having the required rent
available will mean that you have access to the property and can prepare
to move in.
Carefully read your lease agreement and
be aware of the legal terms and conditions binding to both you and your
landlord before signing the contract. It stipulates the annual rent,
due date, the length of the lease as well as what happens if the lease
is broken. It also includes details of any other restrictions or
requirements the landlord may wish to include.
As far as possible, avoid breaking a
lease and plan to give reasonable written notice to your landlord that
you are moving. Lease agreements usually have penalties for breaking the
terms including the forfeiture of your deposit and worse. Many people
neglect to read the small print; be sure that you read and understand
what you are agreeing to before you sign as you are accountable even if
you never read it. Keep a copy of the lease safely for your records.
Don’t forget your insurance. Most
landlords will insure their property; however their policy generally
doesn’t cover any losses sustained by the tenant in case of theft, fire,
flood or such disasters. Renter’s insurance can reimburse for such
incidents and is well worth considering; remember that without this
insurance, you could have to pay to replace belongings from your own
pocket.
As you rent an apartment, keep your
long term goal of owning your own home in view. Be realistic about your
expectations and don’t be tempted to commit to an apartment that is out
of reach at this stage. For now, rent what you can comfortably afford,
and begin to set money aside towards your own home.
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