9 Important Things To Consider When Signing a Lease

Can You Afford the Rent?

Your dream apartment won’t seem so dreamy if you struggle to pay the rent each month. Before signing a lease that may be difficult and expensive to get out of, Barone suggests considering your current income-to-expense ratio. “Experts say a good rule of thumb for renters is to set aside about 30% of their income for rent,” he says.

Let’s say you make $60,000 per year. Using the 30% rule means $19,800 — about $1,650 per month — can go toward rent.

The “30% rule” dates back decades, before ballooning student loan debt and other modern expenses, so take a good hard look at your obligations. “You know your priorities and spending best,” Barone says. “You may spend more or less than 30% based on your values.”

Sometimes landlords, management companies and cities have income requirements for renters. To apply for a New York City apartment, Barone says, your yearly salary must be 40 times the monthly rent.

How Much Is the Deposit?

Rent isn’t the only thing you have to worry about when signing a lease and moving into a new place. “[Make sure] you have enough saved to pay for the security deposit in addition to the first month’s rent,” Barone says.

Security deposits are a safety net for unplanned damages to rental properties. They typically cost the same as one month’s rent, although some states allow landlords to charge more.

Landlords usually hold the security deposit in a separate bank account until you move out. “If there is no damage to the unit at the end of a lease, landlords return security deposits to the renters,” Barone says.