Real Estate Matters | What To Expect When You Are Renting Clarifying Costs For Tenants

- Friday, January 30, 2015 - 9 years ago No Comments 4,319 Views

Juliet Risdon

Juliet Risdon is a Director of JML Property and a property investor.
Having established the company in 1994, JML Property offers Investment Property & Homes. It specializes in managing properties for owners and investors, and providing attractive and comfortable homes for tenants.

Renting a property is usually the first option for young couples, foreign workers as they arrive in a new location, and of course families who find themselves priced out of the property ownership market.
Whilst it may require less money than buying an apartment, renting is usually not in any way ‘cheap’.
There are many costs to consider if you want to rent a property, and this article is about making sure you know what to expect.
You can consider costs in three areas;
•Administration Costs – Hotel Fees, Deposits, Agency Fees etc
• Renting Costs – The cost of the property itself
• Property Costs – Improvements and furnishing
Administration Costs
1- Hotel Costs
Unless you are willing to rent a property without seeing it, you will have to stay in a hotel. The average length of time between arriving and moving in to a property is 2-4 weeks. If you are fortunate this expense can be covered by your company, but if not you will need to budget accordingly.
2- Deposits
You will be asked to pay a deposit to hold the property initially, and this is usually equal to one month’s rent. The deposit is often non-refundable if you choose not to proceed with the apartment. This deposit will later become part of the two month refundable security deposit described in the next section ‘Renting Costs’.
3- Agency Fees
Agent fees vary from country to country. In Macau, the standard agency fee is equivalent to one month’s rent when renting an apartment.
Renting Costs
1- Current Month Rent in advance
Once you have found a property and signed the contract, you will be asked to pay the current months rent in advance. In some cases that means paying until the last day of the current month. In others it means paying a full month and having your rent due mid-month for the duration of the contract.
2- Refundable Security Deposit
You will also be asked to pay a security deposit equal to two months rent prior to moving in. It is worth noting that this deposit is fully refundable, and may not be used to cover rents during the term of the agreement.
3- Current Bills
You may also need to cover the first utility bills as they come in, then reclaim the portion that does not belong to you from the owner. This is to ensure that bills get paid in a timely fashion and you do not get cut off
Property Costs
1- Furnishing
Even when a property is furnished, it may not contain cutlery, plates and cups etc. Many people prefer to purchase their own utensils prior to moving in rather than using anything supplied with the property
2- Improvements
Whilst it is not your property, it IS your home. You may want to invest some money in improving the place given the amount of time you are going to spend there, especially if you have a family. Painting walls, upgrading bedding, new TV and audio equipment are all popular ways of improving your surroundings. Lets face it, if you are here for a while, you may as well make the most of it !
Next Week: Clarifying costs for Owners & Landlords