Renting: The First Step Towards Home Ownership

Keys for house

There comes a time in each of our lives when we move into our own rental property or apartment. Some of us move out when we go away to college. Others move into a place of our own when we find a partner we want to begin a life with. Whatever the reason, it is an important and life-changing step.

Renting a place — whether you live in an expensive 3-bedroom place in Chicago or a small condo in New York City — is usually our first step into adulthood. For the first time in our lives, keeping the rent paid so that we have shelter is our responsibility. The consequences of not taking this responsibility seriously are swift and harsh. We must pay for power to run the household, the food we eat and the clothes we wear. Most of us go through a bit of a culture shock when we realize how much it cost to live life in the manner we have grown to expect. And hey, when you have car troubles, you might even have to take care of it yourself.

Tips for making the move into a rental

  • Use a real estate company like U move free. You will save time and frustration.
  • Keep a notebook for all leases, deposit receipts, and other paperwork
  • Before the moving day, check with the Power Company, Internet Company, and television service to ensure your services are turned on and ready to use when you need them.
  • Speak to the neighbors and let them know you will be moving in and ask if there is any time that would cause them problems. This is just polite and gets you off to a good start.

People Gathered Inside House Sitting on Sofa

How you begin matters

You are young and you have the world in front of you. But, very soon you will be graduating and beginning the next phase of your life. You will be starting your career, getting married, and having a family. This is when your education, finances, and financial habits merge. This is where you discover how well you managed to set yourself up for smooth sailing into the future.

It may be difficult for a young person moving out on their own for the first time to understand, but this is an important time in our lives. Not only does this step affect our immediate life, but it affects our future.

One of the most significant parts of the American dream is homeownership. There will come a time when you want to own property. The home you buy will likely be the largest investment you will ever make. It becomes the cornerstone of your financial portfolio. The way you handle your financial responsibilities associated with your home is a key factor in your creditworthiness. In other words. If you do not over-extend yourself, pay your mortgage on time, and keep your home in good repair (which increases its value) you will be able to get the credit to buy the things you need to proceed.

Train Yourself

People (especially your college buds) will tell you that it won’t hurt anything if you are a little late with the rent. So what if you have to kick in a late fee if it means you can go to that killer concert this weekend. What can they do?

This is BAD advice! Allowing yourself to act irresponsibly will always come back to bite you in the rear. There are many reasons for this. The most important is this. As an adult, there is nothing more important to your financial future than your credit score. Some landlords report your payments (good or bad) on your credit report. Getting evicted or refusal to renew your lease because of late payments is reported. When a company looks at your worthiness to finance a home, furniture, a car, or a credit card, it is those late payments that determine if you will get your loan, and how much you will pay for it. The interest rate you are charged is a direct reflection of your payment history.

Teach yourself to:

  • Budget your money and do not change that budget for anything that is not a true emergency.
  • Understand that pizza, beer, and concerts are not an emergency
  • Save money each month from your already tight finances to pay one months’ worth of bills so you are covered if a real emergency happens
  • Pay cash for extras and keep your credit cards paid up, and with an available balance.
  • Never borrow the money you do not have the means to repay
  • Never loan money you cannot afford to lose
  • Follow all the rules of the lease
  • Read up on new trends in homeownership, such as smart technology

When the time comes to invest in the home of your future, there will be much to learn. There are several ways to secure home ownership. If you have lived your life responsibly to this point, you will have a lot more options available to you.

Renting is the way to begin. However, you do not want to spend years paying for a house that someone else owns. You do not want to build a financial future for someone who has little influence on the avenues you will take in life. When you own a home, you always have financial backing. Enjoy your adventure. While doing so, lay the groundwork for tomorrow. You will someday be glad you did.

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