1. Objective 2.02 ANALYZE financial and legal aspects of renting.

2. Terms to know: Landlords are property OWNERS. They expect tenants to:
Pay rent on time
Keep property in reasonable condition
Tenants are RENTERS. They expect landlords to:
Make necessary all repairs
Give written notice to enter the unit
Not increase rent until the lease ends
Lease is a legal document that includes
Length of agreement
Amount of deposits, rent, and fees
Address of unit
Who pays utilities
Number of people that can live in the unit
Pets (types and sizes).

3. The Rental Process Application
Application Fee – shows landlord you are serious. Usually $25- $100 or higher
Credit Check through a credit agency tells if the tenant pays bills on time.

4. The Rental Process cont.
Security Deposit:
Covers cost of future damage to property
May equal 1 or more month’s rent
Can be returned partially or in full
Pet Deposit - covers pet damage.

5. The Rental Process cont.
Advance on Rent
One or more month’s rent in addition to deposits

6. The Rental Process cont.
Renter’s Insurance
Insurance to cover the renter in the event of flood, fire, theft or any other hazard
VERY inexpensive.

7. The Rental Process cont.
Utilities
Water, gas, sewer, electricity, phone, cable, trash collection
Sometimes the landlord will pay some or all utilities, BUT usually the tenant pays all.

8. How Much Rent Can I Afford?
In general your housing should not exceed 28% of your gross monthly income.

9. Calculating Rent if Paid by the Hour
Hourly wage x # of hours worked weekly = weekly income
Weekly income x 52 weeks in year = annual income
Annual income / 12 months = monthly income
Monthly income x 28% = maximum rent
Example:
$6.00 x 40 hours = $240
$240 x 52 weeks = $12,480
$12,480 /12 = $1040
$1040 x 28% = $291.20

10. Calculating Rent if Paid by the Week
Example: Weekly Income = $340
$340 weekly income x 52 weeks = $17,680 annual income
$17,680 annual income/12 = $ monthly income
$ monthly income x 28% = $ maximum rent

11. Calculating Rent if Paid by the Month
Example: Monthly Income = $3000
$3000 monthly income x 28% = $840 maximum rent

12. Calculating Rent if Paid by the Year
Example: Annual Income - $32,000
$32,000 annual income /12 months in a year = $ monthly income
$ monthly income x 28% = $ maximum rent

13. Complete “Finding Maximum Rent”

14. Ending a Lease
Suppose you need to move earlier than expected. What are your options?
Continue to pay the rent until the end of the lease
Assign the lease
Sublet the lease.

15. Assigning the Lease
This means to transfer the remainder of the lease to another person
The original tenant is NO LONGER responsible for any rent or damages.

16. Subletting a Lease Tenant leases the property to another person
BOTH tenants are responsible to the landlord
EX: college student leaving for semester abroad and lets friend rent apartment.

17. Results of Violating the Lease
Breach of Contract
When either the landlord or the tenant fail to meet the terms of a lease
Eviction
Legally removing tenants from the property before the lease expires
Tenant must receive written notice.

18. In summary…..