21st Century Student FinLit -Getting Personal SW

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Costs of Renting Rent + Utilities (or not). Obviously, the tenant is responsible for paying the rent. The cost of utilities , such as power, water, gas, garbage and cable, are sometimes the responsibility of the tenant, sometimes the responsibility of the landlord. The lease or rental agreement will specify who pays these. Before signing any lease or rental agreement, it is essential to read it carefully to understand who pays for what.

Think affordability! Experts suggest that renters spend no more than 30% of monthly take home pay on housing costs.

Security deposit. In order to move in to a rental property, tenants must pay a security deposit . The landlord keeps the security deposit as a source of funds in the event the tenant moves out owing rent, or if they damage the rental unit or leave it less clean than when they moved in. Typically, a security deposit is made up of a combination of the last month’s rent plus a specific amount for cleaning. If the property is pet-friendly, it will include some amount of money to cover any damage caused by your pet. Generally, when the rental term ends and the tenant moves out, a landlord may withhold from the tenant’s security deposit only those amounts that are reasonably necessary for those limited purposes . Always carefully inspect the rental unit with the landlord on move-in day. Test appliances. Take pictures of any physical defects, such as a hole in the carpet, a cracked mirror, or broken window and provide the landlord with copies. Note the level of cleanliness. You must leave the unit in as good a condition as when your tenancy started. Reflect on Learning: You want to move into an apartment where the rent is $750 per month. There is a $200 cleaning deposit. How much will it cost you to move in? Answer $1700. (First month’s rent + last month’s rent + cleaning.) Renter’s insurance. Many tenants assume that if their belongings are damaged or destroyed by such things as a flood, fire, or theft, the landlord’s insurance will pay for repair or replacement of their property. Wrong. A landlord’s insurance generally covers only damage to the structure, not damage to the tenant’s belongings. If your expensive electronic equipment or clothes are ruined when a water pipe leaks, or you get ripped off in a break in, you are out of luck unless you have renter’s insurance . Why risk it? If you rent, get renter’s insurance. It’s cheap and easy to get through most insurance companies. PRODUCT PREVIEW

The Financial Benefits of Renting a Home Cheaper Move-In. Obviously, it costs a lot less to move into a rented home than to buy a home. After all, first and last month’s rent plus a cleaning deposit are a lot cheaper than a 20% down payment. Depending on where you live, monthly rent is usually less than a mortgage payment. Freedom. One of the things many renters like most is the lack of commitment to a location . Move in, move out. Mobility is no problem. Most experts advise that if, you are not willing to commit to ownership of a home for at least several years, the better option is to rent.

Federal Fair Housing Act The Federal Fair Housing Act protects people from discrimination when they are renting or buying a home. The prohibitions specifically cover discrimination because of race, color, national origin, religion, gender, disability, and the presence of children.

THE 21st CENTURY STUDENT’S GUIDE TO FINANCIAL LITERACY 161

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