Renting: 5 areas to budget for when renting

When beginning your search for the next or even your first rental property, it is important to budget for the costs that are associated with both moving and the ongoing expenses.

Rent and bond budget

In assessing your rental application, Property Managers will look at your income and affordability for the home. As a rule of thumb, an acceptance of affordability will be if your gross income falls within 30 – 35% of the weekly rent.

When looking for a rental property, it is wise to use this as a benchmark so that you are staying within the limits of affordability and not stretching your budget further than you can afford.

A bond that is the equivalent of four weeks’ rent will also need to be paid to the bond authority before collecting your keys and moving in and this will need to be considered when budgeting your affordability.

Relocation costs

Budgeting for costs like removalists in advance can help you to prepare for moving day and the expense that comes with it. Contacting several removalists to get a quote on the cost of the move can assist with planning.

While it may seem an affordable option, the costs of moving can really add up and being prepared can remove any nasty shocks on moving day.

Cleaning and vacate costs should also be factored into the equation of the move. If you can, employ a cleaner, carpet cleaner and any trades to repair items. This will help reduce stress on moving out and assist with getting your bond back faster if you have used professional cleaners to do the work.

Utilities budget

When you are renting there are also utilities that you will need to factor into your budget as regular expenses.

These may be a little harder to budget for, however you can look at costs from your previous home or the utility companies can usually provide an estimate based on the size and number of people in the home. After the first month or quarter, it will give you a clearer look at what costs you could expect.

In some cases, electricity, gas, or water may be included in the rental price and it is important to clarify these costs with the Property Manager or Owner prior to signing the lease agreement so that you are aware of your obligations.

Internet

You may want to connect the internet to your home after your move-in date and to budget this expense, you will need to research the type of connection that can be set up at the property.

There are websites like the NBN Co that will help you to work out what kind of connection is available at the property and then you can research plans with various providers to find the best option for you.

Insurance

While the Owner will have insurance over the building, your contents will not be insured under their policy.

There are many companies that will provide a renter insurance that covers your belongings for any incidents or accidents that may occur during the life of your tenancy for an affordable cost.

New to renting? What is a Residential Tenancy Agreement?