If renting a home right now is a better choice for you than buying one, there are a number of available solutions that may fit your needs perfectly. This is a brief overview of the advice I will offer you as a potential renter. You can browse more resources for tenants on the Welcome! page.
Renting a home may seem like a much less complicated process than purchasing one, and in fact it is. Unlike the weeks- or even months-long timeframe to close on a purchase, it is possible, in a perfect situation, to fall in love with a rental and start moving in on the following day. That’s only a slight exaggeration, but there are still a number of things to consider and be aware of when looking for and making an offer on a rental.
Are there fees to find a rental?
One of the first questions you may have is, “Will you or RE/MAX charge me for finding a home to rent?” The short answer is no—there is never a fee for my service and advice, whether to rent a home or buy one. However, you should be aware of how commissions work in New Jersey.
The standard broker’s fee to list a home for rent and to work with a landlord is one month’s rent, which is paid by the landlord to the listing agent’s real estate company. This fee can be paid by the homeowner or by the tenant, and the owner makes that decision when he first lists the home. Most landlords agree to pay the entire fee, which is taken out of the first month’s rent. There are some landlords, however, who want the tenant to pay half the fee, and in some cases the entire amount. If this is the case with any homes you’re interested in, I will let you know immediately so you can make a decision whether or not to rent that property.
Of course, a situation may arise where you find an absolutely perfect home and agree to pay the fee, if there is one. That decision will be entirely yours to make. And if you are working with a relocation company that will pay all the costs of finding a home, the commission may not be an issue in the first place.
Searching for a home
You start your search for a home the same way as with a purchase: I will discuss your requirements with you and email you listings that match your needs and budget perfectly. It should come as no surprise that many landlords do not want pets in the home, and if you have one, this will limit the number of available properties we can consider. Likewise, most owners want lease terms of at least one year. If you are looking for a rental for a shorter period of time, be aware that there may be very few if any options available to you. We will visit a number of homes, and hopefully you will find one that is ideal for you.
Once you have a home in mind, I will research comps for you to determine a fair price for renting that unit. Different developments have their own flavor, and factors such as size, condition and extras such as a garage or basement will affect an individual home’s value.
A frequent and fair question I hear is, “Is the rent on a home negotiable?” Unlike the listed purchase prices of homes which are virtually always negotiable, rents may or may not be, depending on the owner of the home. I will always try to negotiate the monthly rent for you, but if the landlord if firm on the amount, there is nothing we can do.
Even if the rent amount is negotiable, the amount we can negotiate is relatively small, usually $25 to $100 per month, unless the home is in poor condition or has been overpriced. Rental prices do not fluctuate as much as purchase prices, and it is easier to determine a fair market price to rent in a particular neighborhood.
Applying for a lease
Making an offer to rent a home is a straightforward process. You will need to fill out an application form and provide current credit scores and employment verification.
On the application form you will fill in basic items such as your name, address, contact information, salary, current rent or mortgage amount, etc. You will also provide your current landlord’s contact information and several personal references. The form itself is short, and in addition to providing information, by signing it you agree to have RE/MAX Greater Princeton request your credit scores.
In addition to learning something about you, the landlord will be primarily interested in knowing whether or not your income is sufficient to cover the monthly rent, and if your credit history is good enough to indicate that you are trustworthy and will pay the rent on time. These are reasonable concerns that any landlord would have.
Unless you have a current credit report (not older than 60 days), request one from your bank, credit card provider or another agency. This Federal Trade Commission page has good information on how to request a free credit report or order one from Equifax, Experian or TransUnion. Credit Karma offers free reports as well, although they may not be as accurate as the ones from the three nationwide credit reporting companies.
For proof of employment, usually a landlord will ask for copies of your last three pay stubs showing your pay rate and year-to-date pay. Sometimes a letter from your employer is requested as well, especially if you are moving into this area and have just started working in a new position.
Once I have all your documents, I will forward the application, credit report and proof of income along with a personalized cover letter to the landlord. The landlord’s response will depend on the information provided: if your income and credit scores are more than sufficient, we may hear from the owner quickly and proceed with the transaction right away. Sometimes the owner of the home will want to check references and contact a previous landlord, which will take a bit more time.
The lease document
When a landlord approves your application and accepts your offer to rent the home, a lease will be prepared, either by me or by the listing agent working with the owner. Leases in New Jersey are governed by very strict laws, and most lease contracts contain pretty much the same information. However, there can be a number of differences in the lease that is prepared, and I will review the document very carefully and let you know if there are any items in it that you should be aware of. You can view a sample of a standard New Jersey lease here.
A lease is designed to spell out exactly what is expected of the landlord and the tenant, and what will happen if certain conditions are not met. Even though every lease has to conform to New Jersey laws, there are certain items that legally can be different from one lease to another. For example, one lease may state that a tenant is not responsible for any repairs in the home from damage or equipment failure that is not the tenant’s fault, while another lease may state that a tenant is responsible for the first $100 of any repair, even if the tenant is not at fault. I will review all such differences with you before you sign the lease contract.
A common question by tenants is, “Is it better to have a two-year lease rather than a one-year lease?” This is a double-edged sword, as there are pros and cons to doing it either way. My opinion is that a two-year lease protects the tenant against a rate increase after one year, and offers the landlord some assurance that he will have a tenant for two years. This is a good arrangement if the rent is fair, the tenant takes care of the property and both parties get along well. I will discuss with you my personal experiences with landlords and tenants and help you decide on your best course of action.
If the lease document is satisfactory to both you and the landlord, you will sign it and I will present it to the landlord along with several checks. Your first month’s rent is due at signing, along with the full security deposit, which is one and a half times the monthly rent.
Initial payments due
The amount of the initial rent check may vary depending on when you will be moving into the home and how the lease is written. For example, if you will be moving in on the 20th of the month, your first payment may reflect rent for the first full month plus the additional number of days in the previous month. The landlord may also agree to accept one full month’s rent initially, with the partial month’s amount due as the second rent payment.
Along with the security deposit, you will provide the landlord with an IRS Form W-9, which the landlord will need to open a bank account in your name and his to hold the funds. This security deposit will be returned to you, with interest, when you eventually leave the home (minus any charges for damage to the property).
I will explain to you in detail how the checks should be made out and in what amounts when the time comes. Please be aware that all funds have to be given as certified checks or money orders (not as personal checks).
Transfer of utilities
An important step to take before you move is to contact utility companies to arrange the transfer of billing to your name. In some cases this may be straightforward, such as for electrical, gas or cable service. Water and sewer services may be more complicated, as some companies will only bill the owner of the property, not a tenant. In such cases the landlord will have to pay the utility bills directly and arrange to have you repay him on a monthly basis. I will provide you with a list of utility companies serving the township well before you move in.
Moving into your new home
Although you generally can move into your newly rented home as soon as the lease has been signed and the landlord has your rent and deposit, there is usually one important event that has to take place. Every township requires that a home be inspected before a new tenant moves in, and this can take anywhere from a few days to a week, depending on the township and its rules. This is done for your protection, and a township inspection may be as simple as checking for the presence of working fire and carbon monoxide detectors to a more thorough safety and health inspection.
On the day you move in, I will accompany you to the home and help you conduct a full inspection of the property. We will be checking for damage that is more than normal wear and tear—things that you do not want to be responsible for when you move out a year or several years later. All damage we find will be noted, and I will prepare an addendum to the lease listing all such items. This is a very important document that should be signed by both you and the landlord and kept with the lease, as it will be your only proof in the future that any damage to the home was present when you moved in and not caused by you.
Details of renting
Prior to you even signing the lease, I will give you a copy of the New Jersey Truth in Renting booklet, which outlines in great detail all your rights and obligations and the rights and obligations of the landlord. Please take time to read this booklet, as it will answer almost any question you may have about renting a home.
If you are renting a condo or townhouse, you must abide by all the rules and regulations set forth by the homeowners’ association or condo management company. The landlord will give you a copy of those rules, and you will be responsible for any possible fines by the association for violating them.
Renting a home can be a pleasant experience, as long as a tenant and landlord abide by simple principles: courtesy, communication, cooperation and common sense. If you have any questions about the home, ask the landlord for clarification. You may wonder if it will be OK to put nails in the walls to hang pictures or if you can paint a room in a different color. Some of these questions should be asked before you sign the lease, but definitely check with the landlord after you’ve moved in before making any changes to the property. All such requests and permissions granted should be documented in writing or via email, so you will have a permanent record for your file. Also, let the landlord know immediately if something breaks or is damaged; after all, the home belongs to him and he will want to protect his investment. The landlord will provide you with emergency contact information to handle anything that may need attention in the home.
My role in this transaction will not end after I hand you the keys to your new home. Please feel free to call me any time with any possible questions you have about the home, the lease, the neighborhood or your future real estate plans. You can be assured that I will be your professional contact for as long as you have any needs or concerns about home renting or ownership.
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