Setting up home in someone else's property? If you think that renting a place is only about paying monthly rent and a deposit, think again. In real terms, it comes down to a lot more than that. Here are some other expenses that you need to consider while renting a place.
1. REPAIRS, REPAIRS AND MORE
The older the property, the more you will need to spend on repairs. And by repairs we mean everything from plumbing and electrical to the kitchen and other appliances. If you picked up an older condo because of that extra space it comes with, remember that it is a matter of time before the repair bills start to pile up.
Safeguarding against repair costs: Ensure that the contract you sign with the landlord has a minimum cutoff on how much you should pay for repairs. Usually, landlords pay for repairs that cost more than S$200-300. It is important to go through the contract and be conscious of this figure because sometimes the figure may go up to S$500. A S$500 ceiling has the ability to derail a tight budget, so it will be wise to revisit your budget in relation to the age of the building and appliances before you decide on the final number.
2. MAINTENANCE CONTRACTS
Another fixed cost while renting a place is the annual maintenance contract of air conditioners. All contracts specify that the tenant foots this bill. Since annual air conditioner maintenance can cost between S$100-150 per unit, depending on the number of services per year, it works in your favour to check on costs before you finalise the amount.
Safeguarding against maintenance contracts: Know your AC contract. Shop around and you will figure that not only do costs sometimes vary, but these contracts also come with different packages like chemical cleaning, which usually cost more. Choose a reliable and regular AC maintenance contract and ensure that the contract mentions what is included.
3. CONDO EXPENSES
You move into a fancy place and realise that you have no entry passes to the facility! Condo entry passes for each member can cost between S$10-50, with S$100 or more as security for each pass. And if you add to this the cost of replacing a lost card, you will be saddled with quite an amount in entry pass costs. More money, more expense!
Safeguard against condo expenses: Ask the landlord if he can provide additional access passes for your family before you move in.
4. DEPOSIT AMOUNTS
Usually, landlords ask for a 2-month deposit from tenants. But it is not unheard of to be asked for a 6-month deposit. So it becomes very important to know what the norm is and not pay in excess of it. Also, the clause about deduction from your deposit must be very clear so that you don't find yourself in a spot over normal wear and tear costs.
In case of arguments about the state of your home, or the condition of the things provided during handover, your deposit amount could be in trouble. If things are not amicable, you could lose the entire amount.
Safeguarding against deposit amounts: Take pictures of every nook and cranny of the home before you move in. Also, take close-up pictures of existing damage that you see in the house. Make sure that these pictures are signed off by the landlord before you move in. This way, you will only have to pay for damages that happened during your stay. You must also check the inventory of contents in the house before you move in, and make sure it corresponds to the actual items.
5. AGENT EXPENSES
Usually, it is the landlord who pays for the agent fees but there is no written rule about this. In some cases, you may also have to partly bear the expenses of the agent who shows you the properties.
Agent fees are paid by the landlord unless there is a tenant's agent as well.
Even then, the tenant pays half the fees only in cases where the rent is above S$3,500 and there is a 1-year lease. In cases of rent below S$3,500 and a 2-year lease, the tenant's agent, if any, collects one month's rental from the tenant. When the rent is below S$3,500 for a 1-year lease, the tenant's agent, if any, collects half a month's rental from the tenant.
Safeguarding against agent expenses: In most circumstances, agents need to show you multiple properties before you decide on the final one. So, focus on your requirement and give a clear rent budget to the agent. If you scout for properties within a wide range, you will only end up visiting multiple properties that don't fit your needs - increasing your agent fees in the process. Another way to safeguard yourself is to ask the agent who will bear the agent fees right at the onset.
6. UNEXPECTED DAMAGE AND INSURANCE
Usually, tenants need to pay in case there is a fire, flooding of homes or some damage to property. Ask your landlord if the property is insured against any of these and what it could include.
Safeguarding against damage: Mention in the contract that your liability will be limited to your goods and not the home, in case of an unexpected calamity.
7. CLEANING UP AND DRY-CLEANING BEFORE HANDOVER
It's moving out time and you have to handover the property to the landlord. Most landlords insist on tenants bearing the cost of a complete industrial clean-up of the house as well as that of dry-cleaning the curtains. Though it is not a massive cost, it is best to include a minimum of S$500-800 in your budget for this.
Safeguarding against cleaning up bills: Get the cleaning up of the premises done at your own expense by your own chosen agency. Leaving it to the landlord may result in paying more for it than you initially budgeted.
It is always better to be aware of what you are signing up for. Keep your contract water tight, in case you need to fight it in court. Be cordial with the landlord through the stay, and try to work things out when there is an issue.
This article was first published on BankBazaar.sg