A Graduate’s Guide to Renting

By Justine Chan | 26 May 2020

Congratulations 2020 graduates! Your entire life awaits you! While this is an unprecedented time to graduate, time and time again we have seen students and workers rise to the challenge. You will too; have faith and keep pushing forward.

As a newly minted graduate, one of the biggest expenses you’ll experience is housing. As you take on your new career, consider this expense and availability of housing near your desired workplace. If you are moving to a new city (or staying in your current city but need a new living situation) we have written a guide to get you started.

Step 1: Set your budget 

Step one is to identify how much you can afford. Typically, experts recommend about 25-30% of your gross monthly income towards housing expenses. However, this has to be localized to where you live and, especially as a new grad, this might be difficult on a starting salary. For instance, meeting this ratio is not as easy for a high cost of living (HCOL) city like San Francisco, as opposed to a low cost of living (LCOL) city. To live within your means in a HCOL city, there are ways to reduce your monthly rent like having roommates or living further away from the town center. 

In addition to rent, there are other monthly housing-related expenses to consider:  

  • Utilities – what is included in your rent and what is not? 
  • Wifi / Internet 
  • Furniture 
  • Renter’s insurance 
  • Moving costs

Not sure where to get started? Check out the budgeting tool inside the nav.it money app or check out this guide.

Step 2: List your criteria

At the start of your search, it is important to identify what you are looking for and how important that factor is. With this, you can focus your search and not become inundated by the process of applying to listings that don’t fit your needs. 

Below you’ll see a starter list of criteria to look into and evaluate. For each criteria, you will assign a priority level like ‘Deal breaker’, ‘Preferred’, ‘Nice to have’ and ‘No need’. You can do this is any way that suits you, but a Google Sheet (or Excel)  it easy to manage. 

A sample of considerations include:

  • Unit: size, washer/dryer in-unit, dishwasher 
  • Location: neighborhood, distance to office, public transportation options 
  • Amenities: rooftop, gym, doorman, elevator 
  • Policies: pets, occupancy 

Step 3: Determine if you need a co-signer 

For many new grads, you will require a co-signer for your first rental. Most rentals and landlords will have minimum credit scores or income levels to apply for a unit. Landlords have lenders to satisfy in order to keep their property, and they want to verify that the tenant is able to fulfill his/her rental obligations. 

What this means is that if you are unable to pay your rent, your co-signer is then liable for the obligations… in this case your rent. For most people, this would be a relative or good friend with more established credit and employment history. If you are unable to find a co-signer for the lease, then you might want to consider companies that essentially serve as a guarantor for a fee, such as Rhino or Insurent.

Before you start seriously searching, you might want to ask for someone to agree to be your co-signer.

Step 4: View properties 

In the current state with a pandemic, virtual tours are the standard way for viewing apartments or other rental units. A renter needs to understand the government orders within a state/city and respect the rules laid down. So even if a landlord or real estate agent says they are able to show a property, but the city or building complex does not allow this, then the right thing to do is to watch a virtual tour.

If you are uncomfortable with this, working with a trusted agent might provide you more assurance about renting through a video tour. 

Step 5: Review the contract 

If you are in this stage, you have an accepted offer and are well on your way to getting your first rental. Congratulations!

A lease agreement might at first seem long and filled with jargon so we recommend getting your lease reviewed by someone who has been through the process before. This might be a family member or even a friend who has experience renting apartments and knows what you should look out for.

Be sure you understand what you’re authorized to do or not, what the process is for breaking the lease agreement, and what your monthly rent obligations are. Because of the current climate, many landlords are looking for reliable tenants to fill vacant properties. If you (and/or your co-signer) are well qualified, you may be able to negotiate free rent or a waived deposit fee, complimentary parking or some other perk. Good luck graduates!

About the Author

Justine is the founder of Live With Plum, the home buying guide for the modern woman. She holds an MBA from Yale and is a real estate investor and licensed real estate agent in New York City.

We’re changing the narrative around money but change can’t happen with a one-sided conversation. That’s why we’re excited to bring different voices and experts to share their wisdom. Send us an email and let us know what you think. And remember the nav.it money app offers you free tools for making confident money moves.

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