A lease is a legally binding contract, so it is vital you understand exactly what you are agreeing to. Not to mention, having a firm grasp on the leasing process will help you prepare to move quickly when you find the right rental. Plus, there may be room to negotiate certain terms with the landlord before you sign the lease. Don’t be afraid to ask!
How long do you plan on living there?
You may have options when it comes to the length of your lease from the typical one-year term to a shorter month-to-month term. Ending your lease early can result in financial and legal consequences. Here's the difference between lease terms:
Short-term lease: Renting month-to-month will allow greater flexibility because you can give short notice when you are ready to move. The potential downside is that you aren't guaranteed the same rent security as longer leases. For example, your monthly rent might increase more frequently whereas in a long-term lease your monthly fees are likely locked in.
Long-term lease: With a year-long lease you are protected against rent increases for the duration of the year. But you’ll have less flexibility if unexpected circumstances arise, and you need to move before your lease expires.
Signing the Lease
Negotiate any special terms. In addition to negotiating the rent, you may be able to arrange for the security deposit to be paid over a few months instead of all at once. Make sure anything you negotiate is captured in writing and signed by both parties.
Ask questions. It's natural to have some questions - consider writing down your concerns to ask the landlord, leasing office or another trusted advisor if you need clarity. See if the landlord lives on-site or if a local company manages the property and ask how repair requests and general upkeep are handled.
Complete a walk-through inspection. It's best to do a walk-through inspection of the property with the landlord or someone from the leasing office before you sign the lease. Have the landlord document any damage or wear and tear that you see in the unit.
Read over the lease. Take time to read the lease carefully as it is a legally binding contract. Leases should include information on the number of people who can live in a unit, expectations for noise level and occupancy duration. Make sure any and all terms you have discussed are included before you sign the lease.
What costs are you responsible for?
After negotiations are complete, you’ll be responsible for upfront costs and will need to have your checkbook available. Upfront costs may include:
Security deposit. The security deposit is typically equal to one or two months rent. When your lease is up, you will get this money back if there is no damage or excessive wear and tear. That’s why it’s important to document existing damage with a walk-through inspection report before you move in.
One or two months rent. Landlords may require one or two months rent up front.
Pet deposit. If you have pets, you may have to pay a pet deposit upon moving in. Sometimes, landlords charge a monthly pet fee instead of a pet deposit.