There are lots of things to think about when you’re ready to start renting. You might be considering what location will work for you, deciding if you want to live with flatmates or wondering if you can do without off-street parking if there are good public transport links close by. Regardless of these considerations, there is one important factor for you to start thinking about and planning for – how much money should you budget for when starting a new tenancy?
Determining the amount of rent you are able and willing to pay is the most obvious financial consideration for new renters. Deciding to rent with flatmates may mean costs like rent per person are reduced, but will also require a house with more bedrooms.
Generally, rental costs will likely be higher in city centres and surrounding suburbs (especially in places like Auckland, Wellington, Christchurch and Queenstown), although properties close to beaches or other key recreational facilities may also be more expensive locations.
You will need to pay one or two weeks’ rent in advance, which will be determined by the terms of your rental agreement.
Your rent can be increased 12 months after your tenancy starts or 12 months after the date of the last rent increase. You will get written notice at least 60 days before rent increases, but it’s a good idea to keep the potential for rent increases in mind. If you have a fixed-term tenancy longer than 12 months or agree to extend your fixed term after the first 12 months, rent can only be increased if a clause to increase the rent is written in the tenancy agreement.
You will need to have enough money for a rental bond. Bonds are held by New Zealand’s Tenancy Services and even though the money remains yours it can be used to cover anything you owe at the end of your tenancy. A bond of up to four weeks rent can be requested, so depending on the cost of the rent, money for your bond is something to budget for.
If you look after your rental property, pay your rent on time and take care of any other money due, you should get your bond back at the end of the tenancy. This will be subject to a final property inspection and all utilities and other invoices being paid. It is worth noting that if you are moving from one rental to another, you will need to get finances organised for a new bond, as most property managers don’t accept a Bond Transfer.
Accidents happen. If you, or any visitor or occupant at your rental property causes any damage, this may be able to be charged to you by the landlord. Careless damage would only be payable up to the lower amount of a landlord's insurance excess or four week’s rent, although if proven to be intentional, the whole cost may be payable to the landlord.
Property owners usually have insurance that covers their rental property; however, this does not include your personal belongings that you bring to the property. You should have insurance to cover the replacement value of your personal belongings, this would normally include personal liability insurance to protect you in certain situations.
There will be utilities to pay when you rent a property. These are the ongoing costs of living in the house. Common utilities that you have to pay for (unless included in your lease agreement) are:
Planning for, and budgeting for costs associated with renting a property means you are one step closer to securing a home that suits your budget, and you are less likely to be surprised by unexpected costs after you have signed the tenancy agreement.
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