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A Financial Guide to Renting

Navigating your rental journey can be tricky. Use this guide to ensure that you have a foundational financial understanding of what to expect before, during and after renting.

Before

Whether you are just moving out of your parents’ house, or looking to move to a new space, starting out on a renting journey is always the most daunting part.

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The best way to confirm that you are ready to make your move is a proactive planning approach. Before looking into the desired neighbourhood or location for your new home, you must unpack your financial status to make sure you are prepared.

Look into your expenses, savings and debts:

  • Getting a good grasp on these numbers allows you to know the exact amount you can allot towards rent.

Start a search in your price range:

  • Once you know your price range, you can look into rental units that have the amenities you need to sustain your lifestyle.

  • Make sure that your proximity to school, work or transportation is not excessive, so you do not have to spend extra funds on buying a car or gas.

Budgeting

Budgeting for renting looks a little different then the basic budget we are used to seeing. It involves getting a full-view of your entire financial picture.

Think about your ongoing payments:

  • Rent

  • Utilities (heat, electricity, water)

  • Groceries

  • Transportation

  • Parking

Tip: It is also important to consider amenities. Is laundry included on site? Is your apartment furnished? If not, these will be extra costs that you have to work into your budget. 

What about one time payments? 

  • Upfront costs

  • Security deposits

  • First and last month's rent

  • Potential application or brokerage fees

It is important that before signing your lease, you make sure you are well aware of your rent amount, lease duration, renewal terms, termination and maintenance costs.

It is a general rule of thumb to use approximately 30 percent of your monthly income towards your rent and utilities. However, financial scenarios range among individuals.

During

While you may be eager to move all of your belongings into your new space, it is vital to document the state of your rental property. This allows you to refer back to its initial condition to ensure that you're keeping it up to standards. This documentation will also allow you to provide physical proof to the landlord if there is a damage or cleanliness discrepancy when moving out.

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It is important to note that rent increases are subject to a 2.5% increase cap as of 2024. This cap ensures that landlords keep their rental price within a reasonable range. This rate is also a good reminder to continue to monitor your budget as time goes on and rent increases.

If you feel overwhelmed by rental costs and you are unable to save enough to get by, considering a roommate may be a great option to divide costs and may allow you to save more in the long run.

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Tip: Another proactive approach could be to purchase rental insurance, which is a relatively affordable option that can protect you against theft, damage and loss.

Communication is key:

Avoid unhappy surprises. Informing your landlord about damages to your rental throughout your tenancy not only enables good communication, but allows you to avoid being hit with damage fees when moving out.

Make sure you are made aware of inspections or maintenance schedules. Know when they are expected to happen and how much notice your landlord will give you before inspections, which is usually 24 hours prior.

After

Monitoring your budget throughout your lease is essential so you can be made aware if your financial situation changes or if you have the financial flexibility to afford an upgrade. 

If you do decide that moving out is the right choice, what approaches should you take financially? 

When it comes to renting, there are a lot of moving parts like fees, lease agreements, and moving costs. It is up to you to ensure that you are able to financially handle a leasing agreement. Implementing proactive strategies can allow you to move into your new home with ease knowing that you can not only live comfortably in your rental, but so that you spend comfortably too.

Timeline:

  • You may want to move out before your lease is up, but do be made aware of potentially being penalized if you break the lease.

    • Tip: If you are looking to move but you do not want to be hit with fees, consider getting a subletter to fill your space for the remainder of your rental agreement.

Providing Notice:

  • You need to provide notice to your landlord even if you are planning to leave on the end date of your agreement, which is usually 60 days notice before the end of the lease.

Cleaning and Damages:

  • It is important to leave the unit as you found it, as you can be charged for cleanliness or damage fees. If you are able to fix any damages, make sure to do so properly and within what’s outlined in your lease agreement.

Think About Moving Costs:

  • Do you need movers? Boxes? Time off work? Make sure that you designate an amount towards moving costs, so you are not surprised when the bill comes.

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