Your lease is up, and you need a new apartment. In this landlord’s market, apartments are in short supply--making apartment hunting tedious on your schedule and wallet.
The housing market may be still be struggling to gain its footing, but apartment vacancy rates stood at 4.3% for the third quarter 2012, according to the National Association of Realtors (NAR), and are expected to hold steady for the next few years, says Walter Molony, senior public affairs specialist at the NAR.
Many renters aren’t moving, and properties aren’t turning over, says Michael Corbett, Trulia's real estate expert, adding that apartments come and go in this market with good ones snapped up in 24 hours. If you don’t act fast and aren’t prepared, you could miss out on a great space.
“Be first,” says David Vivero, vice president of rentals at Zillow. Landlords lose money everyday a property’s vacant. “The key with rentals is it’s not an auction process—the first person who meets the desired qualification of the landlord gets the property.”
Since inventories change daily, start looking 30 days before your move date and set your expectations appropriately, says Gary Malin, president of Citi Habitats. If you start too early, there won’t much inventory that fits your moving dates.
Whether you go it alone or with a real estate agent or broker, experts suggest being prepared, moving fast and expecting competition. “Regardless of market conditions, you’ll find a new home,” says Malin. “You’ll have bumps along the way but have fun with it.”
Tip No.1: Understand your needs
“Make a list of wants and needs and figure out what’s most important,” says Malin. Doing more due diligence up front will help you make decisions quicker and avoid losing an apartment due to indecisiveness.
Experts recommend considering the size of the space, commute to work, neighborhood and rent, as well as knowing what you can compromise on and what features are necessary.
Tip No.2: Calculate what you can afford
“Don’t waste your time looking at apartments you’re not qualified for,” says Vivero. “In general, 33% of your income or less should be spent on rent.” To calculate the maximum rent you should pay, divide your annual income by 36—someone earning $36,000 can afford up to $1,000 monthly rent. “This isn’t a hard and fast rule, and there are ways to fill that gap with a guarantor or co-signer,” he says.
Be sure to have rental agreements or checks for prospective new landlords. “Landlords want to know what you were paying in your last apartment,” says Corbett. If you’re looking to pay a lot more than your current rent, the landlord will scrutinize you more. Having a history of paying on time helps you.
Tip No.3: Know where you want to live
Don’t rely on a flat map to pick your new neighborhood—visit and walk around, suggests Vivero. “Bring a mobile app with you to see what’s available and to make sure the neighborhood works for you.”
When deciding on a new area, consider the commute to work, the general location and whether the neighborhood’s amenities fit your lifestyle. You should also check the local crime report and any construction or development plans.
Tip No.4: Come prepared to transact
Every landlord has different qualification procedures so experts recommend having paperwork in order—bring copies of your ID, lists of references, employer offer letters or digital paystubs, your most recent tax returns, as well as bank account info.
“You want to be able to fill out an application on the spot and write a check,” says Corbett.
Tip No.5 Check your credit
“Be upfront about our credit,” says Corbett. If you’ve had a foreclosure, short sale, or other credit issues, discuss these with a future landlord when you submit your application. If the landlord likes you but finds out after the fact, they may not consider you as a tenant.
Make yourself more desirable by offering first and last month’s rent on top of the deposit, says Corbett. This will help level the playing field with someone who has good credit.
Tip No. 6: Keep money easily accessible
“Set up a bank account in advance at a local bank where you can get a certified check immediately,” says Malin. To take an apartment off the market, some landlords prefer a certified check instead of a personal check.
Have at least three times your rent in this account, says Vivero. “If your credit is a little low, your income doesn’t quite meet the ratios, or you have a dog, the landlord may want more of a security deposit.”
Tip No. 7: Stay in good standing with your old landlord
“In this rental market, landlords want to reference your previous landlord,” says Corbett. “Don’t try to stiff your old landlord.” Potential new landlords will find out whether a previous apartment was damaged and whether you paid rent on time.
Tip No. 8: Visit properties…efficiently
As you start to look at physical spaces, experts suggest using available tools and being persistent to find rentals.
Use online apps. “You can go to an app and the GPS will tell you all the apartments that are for rent around you,” says Corbett. If you’re not using the Internet, you’ll be about a week behind. For example, Trulia’s app downloads listings from the Multiple Listing Service and other rental agencies to help you get a better overview. “If there’s inside information, you have to be tapped into those networks,” he adds.
Set up appointments early. In this competitive market, you can’t rely on the landlord to call you back immediately, says Vivero. “If it’s an apartment you really want, call a few times until you hear back from the landlord. Don’t just fill out a web form or send an email and think you’re going to get the apartment.”
Tip No. 9: Know the rental expectations/terms
Know what you’re responsible for paying. Rentals from private investors are a huge component of the rental market, but you may be responsible for more than just rent. “Find out who pays for the utilities like water, trash, gardeners, and sewage charges,” says Corbett. “In an apartment, it’s more clear cut but in a house, there are definitely more grey areas.”
Can you live with the landlord’s rules? If there’s a homeowner’s association, Molony suggests making sure you know its rules and regulations and whether your lifestyle is compatible with these restrictions.
Act fast when you see something good. Experts suggest jumping on a listing when you see something you like or that meets your requirements. In a landlord’s market, you need to make decisions quickly, says Malin. “Give more than the asking price if you really want the apartment.”
In the end, landlords want tenants who will take care of their properties and pay on time. “All landlords want to hear the tenant say, ‘I hope this is a quiet building,’” says Corbett.