If you're just graduating from college or have plans to rent your first apartment in the near future, this may be the first time you've entered into a contract. Your parents might end up cosigning, but this isn't something to take lightly.

This might be your first apartment, but probably not your last. You might change schools before graduating or elect to rent after college while you pay off loans or build a career. You may also relocate for your career. When you rent your second apartment or home, your prospective landlord will likely ask for the name and contact information for your last landlord to see if you were a problem-free tenant.

Next, renting can affect your credit score. Although paying your rent on time isn't something that currently affects your credit score, if you don't pay your rent on time, you're likely not paying your other bills on time either. Renting can help you form good money management habits. Here are a few other renting tips before signing the contract.

Don't Overspend
The conventional wisdom is to not spend more than 30% of your annual salary on housing expenses, but that's a difficult task if you're a college student with a minimum wage job. If you have to pay more than what you're bringing in each month, something will have to be cut. Cable TV and high-priced cellphone plans are a luxury. You need shelter before you need HBO.

Don't Forget Utilities
Housing costs include more than your rent. They also include utilities like gas, electric, water and luxuries like cable if you can afford it. It's also best to buy renter's insurance if a lot of people will be in your apartment. Renter's insurance covers all of your assets that you keep in the apartment. If there were a fire, the landlord will not replace your assets. They are only responsible for the structure. Expenses associated with utilities add up quickly. Make sure you have approximate costs of utilities before signing the lease.

The Neighborhood
You might not care about the quality of the landscaping in the neighborhood, but high crime rates will make your auto insurance go up. If you're moving for school or a new job, the further away you live, the more you'll spend on gas to get there. If you're going to move, live close to your primary destination. Biking or walking saves a lot of money if you can live that close, but every dollar you save on gas is one more dollar you can take off of the cost of the apartment when you budget.

Do a Walkthrough
There are reports of scams where thieves posing as landlords put an ad on Craigslist with an apartment or home for rent. However, because of some seemingly good reason, they can't take you inside. All you have to do is send the security deposit and they'll set up the showing.

No money should change hands without the landlord taking you inside the structure first. Everything should be in writing. If you're dealing with an individual, ask to see this or her driver's license and write down the number. If it's a home, do some research to make sure it's not currently in foreclosure or has any other liens.

The Bottom Line
Renting your first apartment is exciting and it represents freedom and personal responsibility, but take your time, do your research, and ask for help when you need it. It's likely that the apartment you can afford and the apartment you want are two very different places. Go with what you can afford. It will save a lot of stress and if you're a college student or somebody just starting a new career, you'll have plenty of stress already.

Related Articles
  1. Retirement

    Budgeting Tips: Living in Panama on $1,000 a Month

    Discover how far $1,000 in monthly income can take you in Panama, and determine whether this Central American paradise is the place for you.
  2. Investing

    7 Creative Ways to Save for an Early Retirement

    Take note of these out of the box steps you can take towards securing yourself an earlier, more comfortable retirement.
  3. Retirement

    Birch Box Review: Is It Worth It?

    Learn more about the convenience of the subscription beauty box industry, and discover why the Birchbox company in particular has become so popular.
  4. Personal Wealth & Private Banking

    Women, Invest In Your Financial Literacy

    Becoming financially literate should be on the to-do list of anyone who is not.
  5. Investing Basics

    Top 10 Features Of A Profitable Rental Property

    Owning rental property is a tough business. Here are 10 things you should consider before investing in an income property.
  6. Savings

    How to Save Your First $100,000

    Saving your first $100,000 requires the discipline to put money away and control your spending. But just remember – the savings get bigger as you go.
  7. Retirement

    Real Estate Rents Can Fund Your Retirement

    Rental properties can provide a steady source of income in retirement, but it’s not an effortless investment.
  8. Retirement

    3 Reasons Why This Is the Perfect Time To Visit Greece

    Discover three reasons why now is the best time to visit Greece, including the favorable exchange rate and the country's unrivaled hospitality.
  9. Home & Auto

    What are The Best Ways to Save on Moving Costs?

    Because buying a house isn’t cheap, funds might be limited during your move. So, to avoid additional stress, here are seven money saving tips.
  10. Budgeting

    How Much Rent Can You Afford on $50K a Year?

    Before you go apartment hunting, spend some time calculating a price range that works for you. Here's how.
RELATED FAQS
  1. Does renters insurance cover storage units?

    An all-perils renters insurance policy provides coverage for the contents of storage units. Most policies limit the amount ... Read Full Answer >>
  2. Does renters insurance cover mold?

    An all-perils renters insurance policy typically provides a low set amount of coverage for damage caused by mold as long ... Read Full Answer >>
  3. Does renters insurance cover theft?

    An all-perils renters insurance policy provides worldwide theft coverage for personal property after a claim exceeds the ... Read Full Answer >>
  4. Does renters insurance cover dog bites?

    A renters insurance policy typically provides liability coverage, up to policy limits, for dog bites unless the coverage ... Read Full Answer >>
  5. How much renters insurance do you need?

    You should have enough renters insurance coverage to replace lost or damaged items with new ones. On average, renters have ... Read Full Answer >>
  6. Does renters insurance cover moving?

    An all-perils renters insurance policy covers damage to items resulting from a covered peril during a move. Limitations and ... Read Full Answer >>
Trading Center