The rent you see in ads is seldom realistic. Aside from the cash you are required to have upfront to rent a place, and the monthly expenses not included in listings, such as utilities, the actual monthly output is usually 15-20% more than that low, low teaser number. The more you understand about where that difference comes from, the more likely you are to avoid a distressing move.
The Upfront Cash You Need Before You Touch a Key
This is the point where most renters face reality as these costs can’t be avoided. Before you even start comparing paint swatches, you’re calculating what you need in the bank right now because you’ll typically have a bond and two weeks’ rent in advance before you can even unpack your favorite movie.
For properties leasing under $700 per week, the maximum bond payable can’t exceed four weeks’ rent according to the Residential Tenancies Authority. If rent is $500 a week, you’re paying $2,000 in bond, and $1,000 in advance rent straight off the bat. You need $3,000 clear in the bank before you can even send the boys round with the truck, and after you’ve paid the boys there won’t be much left so you’d better make that grocery shop at Aldi.
Many landlords and property managers also require a holding deposit to be paid which takes the rental property off the market while your application is processed. This can’t be more than one week’s rent, and is deducted from your rent in advance, but someone has to pay it before you can accomplish anything, and that someone is you.
Electricity, gas, and internet all require a connection fee, one hundred bucks each thank you very much. Now you need $6,400, plus the movers, plus a trip to the grocery store.
Reading What You’re Actually Signing
A lease or a rental agreement QLD is a legally binding contract that details the arrangement between the landlord of the property and the tenant. It’s critical to read and understand your rental or lease agreement before you sign it. This is because, once you and the landlord sign the document, you’re bound by the terms and conditions and may not be able to break the lease without penalty. Be sure to ask the landlord questions about anything you’re unsure of.
The Entry Condition Report is a Financial Document
Many tenants perceive the entry condition report as a hassle. It’s not. It is the most essential document you will fill out during your entire tenancy, as essentially, it is what you will pay for when you leave.
Any pre-existing damage not recorded in the Form 1a, is your responsibility to pay for when leaving the property at the end of your lease for the landlord to repair. A bond deduction that could have easily been avoided by taking ten minutes to properly go through and fill out the form and take photos when you moved in.
Do not rush it. Do not let anyone tell you “small things do not matter”. Submit your completed copy to the property manager within the stipulated time and date and keep a copy for yourself.
Ongoing Costs That Renters Underestimate
Water is a nasty shock. Whether your landlord can push through water usage costs to you relies on whether the property satisfies water efficiency benchmarks and is separately metered. If not, you can’t legally be charged for usage, just for sewerage and supply. Figure this out before you count your pennies.
Contents insurance is another expense many renters neglect, particularly newbies who believe the landlord’s building insurance extends to their stuff. It doesn’t. A deluge, a theft, or a fire that destroys your couch, computer, and clothes won’t generate a payout from a building policy. Monthly premiums are generally minimal, way less than a new iPad and a new wardrobe.
In high-rises, look out for embedded network billing. Some buildings bundle your electricity or hot water with a single supplier rather than the free market, so you can’t hunt for a better deal. You get what that network decides. It’s worth questioning before you sign.
Last of all, if you own pets, include the end-of-lease cleaning costs. Pro carpet steam clean and pest control will likely be included in the pet clause in your contract, and it’s not inexpensive. Understand this in advance so you’re not gobsmacked when your fur baby bars you from your bond.
Break Lease Costs Deserve Their Own Category
Fixed-term leases are there for good reason, and skipping out early will hit you straight in the hip pocket. Break lease fees generally cover advertising for a new tenant, the costs associated with the property manager finding new tenants, and sometimes the rent until they move in. The fee can be higher the earlier you break your contract, and the longer it takes to find a new tenant.
If you’re contemplating entering a 12-month lease, and there’s any chance work or a relationship or illness might force a move, you need to understand the risks.
Rent is not the bottom line, rent is just the start of your costs. Build your budget from the ground up.
