Buying your first home is thrilling and empowering, but it’s also a huge responsibility. There’s few things you should know before you get started.
Top tips for first-time renters – from house hunting to a smooth move
Moving out of home as a first-time renter is daunting; everything feels new and there’s so much to learn. Here's the how-to from HOOD.
Moving out of home as a first-time renter is daunting; everything feels new and there’s so much to learn. Here’s HOOD’s guide to everything you should need to know before you start house hunting.
Flying the coop? Planning to move out for the first time is an exciting period in anyone’s life, but there’s lots of things to keep track of, and almost certainly a few surprises ahead. This guide is going to clear the mist. First, we’ll give you a list of everything you should need prepared before you start looking for a rental property. Second, we’ll walk you through the process of inspections and making applications, giving you a few things to keep in mind. And finally, we’ll give you an idea of what to expect once your rental application has been approved.
First-time renter: where to start?
You’ve made your decision, it’s time to get your own place. But where do you start? The best way to avoid surprises is preparation. You’re going to want to know in advance where you want to live, how much you can afford to spend, and the living situation that best suits you.
Start your research by combing through online real estate listing sites like rent.com.au or Domain. Enter the suburb you’re looking to live in (and maybe a few surrounding suburbs to expand your search), use filters to narrow down your search (like number of bedrooms or car spaces) and refine it with your budget.
How should you budget for rent? Usually rental prices are listed at their weekly cost, but paid monthly. Property managers will normally only approve a renter’s application if their monthly household income is at least three times the monthly rent. That means you shouldn’t be looking at anything that costs more than a third of your income per month – not just because you might not get approved, but because you’ll probably need more money than you think to cover other expenses like groceries and utilities.
If someone is going to be helping you out with your monthly rent – your parents, for example – be sure to list them as guarantors on your rental application so your property manager knows you’ll be able to pay your rent on time every month. They may ask for some additional information from your guarantor, like proof of income and photo identification.
Bond and first month’s rent
Finally you’ll need to make sure you can afford the actual process of moving out, which is often a surprisingly expensive process for many a first-time renter. The two largest expenses to plan for are your bond and first month’s rent.
You can think of a rental bond like a security deposit; in Australia, your bond is set by the rental provider but paid to and held by the Residential Tenancy Bond Authority (RTBA), to be returned to you at the end of your tenancy. Once you’ve finished up at your rental property the rental provider will inspect the property, if they find any damage which is attributable to your time there, they will apply to the RTBA to claim the cost of fixing the damage from your bond. This is why it’s so important to look after your rental while you’re living in it, and to document the condition of the property in detail as soon as you move in (more on this later).
Note that as of 29 March 2021, the amount rental providers can ask for you to pay in a bond cannot exceed one month’s worth of rent at the property (unless the rent amount is above $900 a week).
Your rental provider will also almost certainly ask you to pay your first month’s rent before you move in. This means you’ll need two month’s worth of rent in advance before you can move in; one to cover your bond, and the other for the first month of your lease.
It’s also good practice to have your application filled out before you visit a property for inspection, so you can submit it straight away if you’ve decided you’re happy with it. Remember that rental applications can be pretty competitive, so as a first-time renter, you want to put the best foot forward by presenting as organised and punctual.
Plenty of rental providers these days opt for a digital rental application process, 1Form being the most popular. You can sign up as a tenant on the 1Form website and fill out your profile ahead of time. This way, applying to individual properties will be a breeze, as 90% of the information rental providers ask of you will be pre-filled.
Along with your application, you’ll be asked to provide a form of photo identification (like a driver’s licence or passport), proof of income (payslip or employment contract), a previous bill (phone bills are most common) and a personal reference (try asking your employer).
BEFORE YOU GET STARTED: CHECKLIST
- First month’s rent
- Personal reference
- Photo identification
- A copy of a previous bill
- Completed application
INSPECTIONS AND SECURING THE PROPERTY
Once you’re loaded up with all your preparatory materials, it’s time to get out there and start scouting. Organise inspections for the properties you narrowed down during your initial search – some of them will have pre-defined inspection times for you to visit the property, and others will require you to get in touch with a property manager to arrange a specific inspection time. It’s very important that you inspect the premises in person before putting pen to paper, in order to avoid future painful complications.
Make yourself a ‘Must Have’ list of housing attributes you absolutely cannot compromise on: things like location, proximity to public transport, walkability, amenities or pet-friendliness. Pay close attention when inspecting your property: this can be difficult when you’re only allotted a 15-minute window to share with 10 other people, so having a list of items to check off will be more useful than you might think. As a first-time renter, this process can seem a little intimidating to begin with, but the more properties you look at, the more comfortable you’ll grow with knowing what to look for.
Don’t be discouraged if your first application doesn’t get approved. Remember that you’re competing against other house hunters with more rental history and possibly higher incomes. The first house a person moves into usually isn’t their dream home, but that doesn’t mean you won’t find a place you’ll be happy to live in.
Try to make a day of your inspections by organising them back to back, this will help expedite your search and compare each property more accurately. It is not uncommon for rental hunters to have multiple applications for different properties pending at the same time. While your application is pending, make sure you are contactable in case the rental provider needs to get in touch or requires further information.
Signing your lease and preparing to move
You found a place, made your application, and got your approval – congratulations! This is where the fun really begins (and where your wallet starts to feel lighter). The first thing you’ll be asked to do is drop off a cheque for your bond. For a lot of young people, this will be their first time paying with a bank cheque. If that’s you, don’t fret – the process is as simple as heading down to your local bank branch, and asking for a bank cheque for the bond amount addressed to the RTBA.
You should receive your rental agreement a few days after your application is approved, be sure to read through it carefully. If you don’t understand anything, ask for clarification or go through it with a friend. It’s very important that you know what you’re signing up for when signing a contract as binding as this one, and you don’t want to be blindsided with a clause you didn’t quite get halfway through your tenancy.
Once you’ve signed, paid your bond and your first month’s rent, you should receive a welcome pack from your rental provider containing your keys, a signed copy of your rental agreement and a condition report.
The condition report is a document that you fill out detailing any damage the property has sustained before you moved in. It might not feel very important, but it’s vital that you take the time to fill this out carefully. Go through each room and take a careful look for cracks in the walls, spots on the ceilings, chips on the doors – anything that might potentially become a point of contention at the end of your tenancy. If your rental provider makes a claim on your bond for damage you don’t think you were responsible for, you’ll be able to reference the condition report you filled out at the beginning of your tenancy as proof. This is why it’s also a great idea to take photos of every room along with the condition report, even if it isn’t required.
Rental providers normally give you about 14 days to complete and return your condition report once you’ve moved in, so make this a priority. If you fail to submit the report, the rental provider will just revert to the condition report they conducted, so you won’t get a say in any claims made on your bond, should there be one. As a first-time renter, the last thing you want is to have to deal with bond conflicts at the end of your lease.
You’ll want the water running and the power working before move in day, which means sorting out utilities connections as soon as possible should be a priority. Depending on which state you’re in, you’ll have different options available for each utility. Get started by shopping around: do the research on each water, electricity, gas and broadband provider that can service your new address, call them all individually and arrange for a connection to be made before you move in. Each call is likely to take between 20 and 30 minutes.
If that sounds like a lot of work, the alternative is using a utilities connection service like HOOD. Our service is totally free, and saves you a tonne of time and cash. Speaking with a HOOD specialist specialist means you’ll have someone to explain the difference between providers and the plans they offer, the option to choose from any of our available providers, and the convenience of getting all of your utilities sorted in one phone call.
Moving in itself is another beast entirely, which is why we made the best-moving house checklist ever »
It includes every aspect of a typical Australian move, and it’s the perfect companion for a first-time renter, and sure to save you a lot of time and stress.
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