It’s been a while I posted and this is due to the certification exams (Institute of Chartered Accountants of Nigeria (ICAN) ) I had to write this week. I missed sharing awesome personal financial tips with you and I’m glad to be back.
This week, I want us to focus on a topic – RENTING A HOUSE. There is so much to discuss when it comes to renting a house. But I would be limiting it to this two:
- The things you should know or check before renting a house and
- How to effectively save towards house rent (out in my next post).
Most millennials want to have their apartments, either to be independent, live close to places of work or discover themselves (goals and capabilities) outside the influence of their families.
Before you decide to rent or move into an apartment, be ready to do the work. Do not be desperate. There are a lot of background checks to avoid financial or non-financial issues in the future – and you need to go through that process very carefully.
Do not leave the things that matter to you in the hands of your agent.
Here are some points to consider when trying to rent a house:
Research the Area
You have to explore the area before you move in. Is it near the market? Is it near the hospital? Can you easily access the bus stop? Does it get flooded during the raining season? Is it safe? Is close enough to work? Is the environment conducive? Is dirt dumped close to the building? etc.
As I said earlier, it is up to you to do all the research you can before signing or making payments. You can speak to few individuals in the neighborhood to get more information on what you need. You should start your apartment search way early to avoid making decisions in a haste.
It costs more than you think: Understand the Contract
Before accepting to pay any rental fee. You need to go through the contract to understand the exact amount you would pay in your first year of moving in and in subsequent years. An agent might tell you a rent fee is #400,000 per annum, but then, you find yourself paying more than that in the first year. This might leave you financially down because it wasn’t planned for. Fees might include:
- House Rent
- Agency Fee
- ”Omo onile” fee
- Security fee
- Waste fee
- Legal fee
- Administration fees etc.
Another thing you have to sort is the rent increase issue. Will there be subsequent increase in the rent? You have to get clarity on this from the agent or landlord. In the event of justifiable rent increase, you have the right to know early enough to prepare for it.
Check the Price Guide for your Area
This is really important, to avoid being cheated on. Houses in specific areas have similar costs of rent, provided they are offering you the same services. E.g
- A self contain in Yaba/Somolu/Palm groove, Lagos would cost between #200,000 – #250,000 rent excluding other fees mentioned above.
- A mini-flat in in Yaba would cost between #300,000 – #350,000 rent excluding fees mentioned above.
From the illustration above, you can see it is specific to that area. Rent varies in different areas or states in different countries.
Beware of Hidden Cost
There may turn out to be some extra hidden costs that the landlords and letting agents will not inform you about. These costs are then passed onto you. This happens a lot and it is very rampant when renting houses in Lagos. You find yourself having to pay accumulated electricity, water or waste fees that you knew nothing about.
There have been a lot of recorded circumstances:
- A friend of mine Dami, who recently moved into an apartment, had to pay over #80,000 PHCN Bill which she knew nothing about.
- A colleague was locked out of his apartment because LAWMA ( Lagos State Waste Management) claimed the building owed over #200,000 waste fees. He had to pay out of the fees.
You have to be fully aware about this to avoid financial loss. Ask Questions!
Bills, Bills, Bills
Renting a house or home comes with a lot of responsibilities. So it is not just about renting the house, but you have to understand how you can sustain yourself through out the rent period. Renting houses comes with a lot of monthly or quarterly bills you have to pay. You have to plan yourself financially to deal with bills events. You might be faced with:
- Gas bills,
- Electricity bills,
- Water bills,
- Fuel Bills e.g generator
- Waste bills,
- Security bills,
- DSTV subscriptions
- Miscellaneous bills e.g house repairs, electronics repairs etc.
Check the Apartment/House
I am certain none of you want to be in a situation you paid over #400,000 per year for an apartment and thereafter, find yourself spending over #200,000 making repairs. You are way over budget. So, this boils down to the fact that you should start your house search early to avoid taking poor-conditioned houses in desperation. When checking houses, you should consider the following:
- Presence of burglary proof
- House painting
- Security of the building
- Electric sockets
- Good electricity
- Holes in the building etc
Few circumstances might arise when you are in an urgent need of house, this is tough, but you have to still carefully check the certain features above to avoid regrets after a certain period.
Shared Apartment: Know your Room/House mates
If you decide to rent an apartment with someone else to save cost, that is absolutely fine. But it could either be a really wonderful experience or a total disaster. Knowing your roommates also entails talking to them before both of you decide to share costs. You must:
- Talk about how to split the bills
- Respect each others differences
- Condone each others bad habits etc.
Photo Credit: Google
There is so much more to talk about, but I hope I’ve been able to cover most things you should know before renting an apartment.
Kindly share your experiences or contributions in the comment section.
Have a great week, and until next time,