Frugality when renting

Two days ago, I was shocked to notice a for sale sign had been placed along the road in front of my apartment building. I am lucky, having had two years of business law in college I knew what the implications would be if, and when, the building sold.  So I took a proactive step to guarantee I could remain living here for the same monthly amount.  I realize not everyone knows you can have a little cushion of security when renting, even if your home isn’t listed for sale.

google images

Google images

The main key is that when a rental property is sold the new owners have to honor your lease. (Please check with where you live to make sure your laws aren’t different)   Knowing this I contacted the current manager of the property and asked to extend my lease. Of course I went for 5-10 years, I knew he might not want to go that far, but it was worth negotiating from there.  What I ended up with was a 3 year extension on my lease.   This means that for 3 years my rent (utilities included) can’t be changed no matter who owns the building. An added bonus is that all the work we have put into the field to have seating areas and the community garden is a selling point.   I was given the go ahead to continue what we started!

In the case of a change of ownership of your apartment, the new owner has the right to not renew your current lease, leaving you searching for a new home.  By extending the lease even if the new owner plans to displace you, you have much more time to look for a new home.

If you are looking to rent or are currently renting here are some suggestions.

  • Read your lease carefully, some will have a built-in clause which states how much your rent will increase each year.
  • For your first year I would suggest signing a 1 year lease.  This will give both you and the person who is renting to you time to get to know each other and make sure it’s a proper fit.  Asking for a long term lease may make the landlord nervous.  They don’t know yet if you are consistently late on the rent, or disruptive to neighbors, for example.
  • When it’s time to renew your lease, if there are no clauses dealing with annual increases, and you know you want to stay where you are for a longer period of time, consider renegotiating the terms of the lease.
  • Be honest!  Let them know why you enjoy living where you do and would rather not go through this each year, in my case I was honest about wanting to protect my monthly cost upon the possible sale.

Many landlords and property managers are happy to know an apartment is being rented by someone who will take care of the property, enjoys living there (less complaints), doesn’t cause problems, and pays their rent on time and will gladly extend your lease over having to go through the process of listing and finding a new tenant.

How will this help to save money

At the end of my first year here I was asked if I would be willing to sign another lease, but that the rent was going up.  It was only $10 a month and yes I wanted to stay here.  If my rent went up by $10 a year over the next 3 years I would be paying an additional $720  by the end of that period.  You may shake your head and say so what that’s only an average of $240 a year. Of course that is only the average.  Here is what it would look like year by year:

  • Year 1: additional $120
  • Year 2: additional $240 (the cost is now $20 more than you are curently paying)
  • Year 3: additional  $360 (the cost is now an accumulated $30 a month increase over your current rent)

Sure but what if that annual $10 increase one year jumped to $50 unexpectedly?  Either way I would rather have the money in my pocket to do with it what I want, such as give it to a charity or add it to savings.

 

No need to worry

For so many who learn their home is being sold out from under them it becomes a time of stress.  You have put your whole heart into making these four walls feel like an expression of yourself.  Maybe like me you have invested some of your own money, indoors or out.   All is not lost.  If you can extend the length of your lease you will have continue to be able to enjoy your home.

What happens if you and the new owner don’t see eye to eye?  With some help and done properly you can end your lease without consequences, but that’s another story and does differ from location to location.

How do you feel about signing multi-year leases?

 

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22 thoughts on “Frugality when renting

  1. That was clever that you nipped in there on time and negotiated a longer lease! And smallftprints is correct that you really should have all the documentation filed somewhere safe. I have moved house so many times I always take some pictures when I move in too (if there are stains on the carpet or damage on any doors etc. or if mould develops).

    Once where I was sharing a rented as a student in Dublin, the landlord decided he wanted to sell the property and at the time, unless the tenant lived there 2 years or more there was no possibility to extend the lease past the month’s notice at all. One of the tenants was there more than five years so he resisted and stayed another while (I think around 6 months). Whereas in Germany, the law is set up to protect the tenant more (because most people rent). A german friend who was ousted from her rented home (in an apartment block) was actually paid a nice settlement when she did leave for the inconvenience!

    • I usually take pictures, but this area has very little turnover of owners being a university town the profit on rentals is huge here. The carpet was brand new when I moved in, I was asked to delay my move in date by one day so they could give me new carpet since I told them this would be a long term stay for me. When I look see the inside of other apartments I am shocked at how bad looking their carpets are.

      Here too when you are forced to move you the new owners are required to pay you a settlement. When a mobile home park sold to Walmart to build a larger store, Walmart paid each person to move their homes. Single wides received just over $20,000 and double wides received between $50,000 and $100,000 depending on if they had attached structures like a garage but it costs quite a bit to move an actual home, they also had to give those people 6 months to make the arrangements and have the home moved out.

      • You were lucky to also get a new carpet :) I guess the inconvenience of moving home is one thing but I suppose getting a settlement for it, if the person has no problem with moving, is at least something.

        • The people weren’t happy to have to move, but given the length of time and the money it seemed to work out well for them in the end.

          I was so lucky to get the new carpeting! I saw the apartment with the old carpeting and it was this pinkish cream color not me at all.

  2. We lived in an apartment which was turned into condos. We had the option to buy one, which we didn’t want to do. We did want to stay for awhile so new owners purchased the unit and didn’t have to worry about finding reliable renters … we came with the condo. Here’s the thing … they weren’t reputable people and did everything in their power to raise our rent. Fortunately, I keep copies of (almost) everything so when they tried to raise our rent a month later, I had documentation proving that they couldn’t do it. When my lease was up, they did raise the rent considerably and we chose to move out. The one piece of documentation that I didn’t have was proof of how the apartment looked before we moved in. The new owners jumped on that to say any damage was our fault and not only did they refuse to return our security deposit, they threatened to sue us for more damages. We had no proof so couldn’t really fight it. The lesson, here, is do a walk-through with your management before you move in and get copies of everything so that when you do move out, the owner (new or old) cannot claim that you’ve damaged the place when you haven’t. And keep all of your records … it’s the only defense you really have against people who take advantage of others.

    • Great advice. I’m sorry for your experience. That is another concern when I think about who may buy the building, what will they be like. But needing a handicap accessible home there aren’t many options. While the laws here require the landlords to put in ramps or other needed changes for any one with limited mobility, there is nothing you can do if the landlord decides to rent to someone else rather than you to save money on making these changes. If he were dumb enough to tell you with witnesses or in writing that he didn’t rent to you because of your disability you could sue, but I don’t believe in suing. I wouldn’t want to rent from someone after taking them to court, and don’t believe in coming into money in that manner.

      I don’t have that either, I tried to get a move in check list done when I moved in but they said they didn’t need one and I gave up pushing it. Overall, there isn’t much wrong with the apartment. The drain can’t be plugged in the bathroom sink using the little lever on the faucet but that’s it. I joked with a neighbor that I could change a few things in here to improve the place, like a new kitchen faucet which is higher than the one I currently have, but there isn’t any damage to the unit I have and any thing that comes up I usually take care of myself. As for the security deposit, I only had to put $150 down so while I hate to lose any money it’s not that bad if I didn’t get it back. The only thing I did get in writing was the per-approval for a different paint color which they purchased and painted for me before I moved in.

    • Thank you. I do picture rents going up if the new owners decide to put some time and money into the building. There are so many improvements that some areas of the building need, some more costly than others but hopefully it won’t be much. I’m more concerned with the personality of the new owners and if they decide to impose new rules.

  3. A friend of mine had an apartment sold out from under her once – only I don’t think she even had the option to stay since the new owners completely remodeled the building and turned it into condos. Do you think there’s any sort of lease arrangement that would have protected her in that situation?

    There are times when owning a home can be a major pain, but all in all it’s been a wonderful decision for me. It’s been 18 years since I bought, but the little 285 sq. ft. apartment I used to live in now rents for nearly twice my current mortgage (which only has 10 more months on it… hooray!)

    • Depending on the local laws, and if your friend was in Colorado, I believe the law would have allowed her to stay. If the new owners wanted her to move before the end of her lease, they would have had to pay her for the inconvenience to move. Most times it’s an amount which would satisfy the cost of first and last month plus deposit and the cost of hiring movers to move her furnishings. I’m sorry she had to move and didn’t know she could at least get them to pay for her move. If they didn’t want to pay for her relocation she could have refused to leave until the lease expired and they couldn’t have made her stay.

      I did love owning my own home, but I don’t miss the unexpected repairs that came with owning something older and I also like to buy something in poor shape I can make new again and put my own stamp on it. I look back at some of the places I rented when younger and can’t believe what they are going for today. Congratulations on having your home nearly paid off, will you be throwing yourself a party?

      • Well, since I never got around to having a house warming party… or any other sort of party for that matter, perhaps I will have some sort of celebration.

        That’s very interesting info on the lease stuff. Too bad she didn’t know those details because it certainly would have helped her out.

        • You can usually get a copy of the local renters laws from your local municipal office and at least around here it’s free. I’m sorry she didn’t know her rights, hope things worked out in the end for her.

          You should have a party, around here people used to have a part when they paid off their mortgage burning the bank papers at one point of the festivities.

  4. What a fright you must have got but you’ve dealt with it cleverly. We had to leave our lovely little unit when our yearly lease ran out because the owners wanted to move in.

    • That does happen often with a duplex or flat around here, which would be another reason if you loved the place you had you could extend the lease and stay. It will either work to help a sale go through or weed out the people who want to buy and remove the tenants if they have to wait a few years to do so. I hope you found a place you love as much or more.

  5. We negotiated a special lease for my Mother-in-law who is renting a half duplex. She sold her home a couple years ago and no longer wanted to own due to likely going into a senior facility at some point. She is currently 78 years old and in good health. She found a brand new half duplex she liked that was up for sale. Due to the market being poor at the time we asked if she could rent it but only if she could have a 3 year lease. After that she will go month to month if the landlord allows or she will move if he chooses to sell it. We wrote in a special opt out clause – that she can break the lease if poor health struck her. The landlord agreed. The only thing that cost extra (and the thing that made him decide to rent it) was that it had no appliances. We purchased a new appliance package with basic white appliances for $1800 (specially negotiated again ) for washer, dryer, dishwasher, stove and fridge. She had to pay for those and at the end of the three year lease they are his to keep. This deal was great for both of them and she is as happy as a clam. He is very nice to her and because she is a great tenant he keeps bringing her presents like Salmon from his last fishing trip and a pointsettia at Christmas. It worked out really well.

    • That’s fantastic, I’m so glad it worked out for both of them. I have a similar situation, while younger than your mother-in-law, I have no idea if sometime down the road I will need to move to assisted living. Having the field and gardens to work on helps me to stay physically active. The work I have done on the back field has improved the living space for residents so I’m pretty well liked at this point by the current owner and management, although they don’t bring me presents like your mother-in-law receives. :-)

  6. My lease will only go year to year. I can get out of it for a little over one months rent. Each year that you sign a lease they still have the option to raise the rent. I’m using this time to find a place I can afford to purchase. On my budget, it won’t be easy. I thought hard about staying but my neighbors have a late night schedule and inevitably wake me. Then I can’t get back to sleep. I have 8 more months to decide. There is an argument to be made both ways. Can you hear me arguing with myself? My neighbors can. :)

    • LOL I’m really sorry about your neighbors. Any chance you could talk to them and work something out? I did briefly think about owning again when I saw lakefront property for sale, but there’s so much I don’t want to deal with. I can’t do everything myself any more, so I might as well stay where I am and I do love it here.

  7. I have never signed a multi-year lease. In my current apartment, it’s a one year lease that automatically switches to a monthly lease after the year is up… I am actually really glad about that because it means I would be able to move out on short notice if I wanted to, say, move in with my partner. Not having to wait another several months before being able to make a move like that is really nice. My lease is up in June! I like my little apartment and will probably stay a while. :)

    • If you aren’t sure if you would want to stay then it’s better not to sign a longer lease. I’ve had a month to month situation before it has it’s pros and cons. In my case the landlord was horrible and it was easy to get out of there, but on the other hand it allows a landlord to terminate your lease any time he wants to at the end of any month giving you only 2 weeks notice in some cases, depending on location. I don’t care for the uncertainty with them.

      I’m not as young as you and in my case I happen to want to live in a very expensive part of the county, so finding this place for the price was such a surprise I had to snap it up. With starting a community garden etc, there are many things I still want to do here and it has everything I wanted all in one.

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