19 Mistakes College Grads Make When Finding Their First Apartments

You aren't being graded on your apartment hunt, but you still want to get it right.

Finding your first apartment after college is a big undertaking — it can be hard to know where to start when you’re staring at a stack of listings and the money from your new job is burning a hole in your pocket. And you’re new to all this, so you’re bound to make some mistakes along the way.

But we can help. Take a look at some of these common slip-ups so you can do your best to avoid them as you search for a new place to hang your cap (and gown … see what we did there?).

1. Starting Your Search Too Early

“Generally, the best time to start looking for an apartment is no more than three weeks before your move-in date,” said Margaret Fanney, a licensed real estate agent at Triplemint in New York City. But once it’s time to start your search, you want to make you aren’t …

2. … Underestimating How Much Everything Costs

Whether you lived in student housing and paid on a semester basis, or you are moving to a different state (or even different city) post-graduation, getting your first apartment can be a big financial adjustment. (Still deciding if you want to move somewhere new? Check out these 15 best cities for college graduates.)

You can use the time before graduation to research how much apartments are in the areas you’re considering and what costs you might pay for additional amenities.

3. Not Planning for Expenses Beyond Rent

Most people think about the monthly rent check (or charge, if your landlord lets you pay rent by credit card), but that’s not the only expense you’ll face living on your own. Think about other necessities like laundry detergent, toilet paper and groceries. And remember, there are ways to save on your daily expenses — like making this delicious 16-cent breakfast.

4. Leaving Student Loan Payments Out of Your Budget

“Monthly payments for student loans are often overlooked … because student loans come with a six-month grace period before you have to start making payments,” said Brandon Yahn, founder of Student Loans Guy.

5. Forgetting About Credit

Most landlords look at a version of your credit report as part of the application process. Things like credit cards or loans (ahem … student loans) are impacting your credit. (You can read more about what factors influence your credit scores here.) Depending on how far into the world of credit you’ve ventured, your credit file may be pretty thin. Not sure? Now’s the time to find out — take a look at a free summary of your credit report on Credit.com.

6. Not Gathering What You’ll Need

“Graduates usually rush to find an apartment without contemplating on the requirements for renting an apartment,” Kobi Lahav, managing director of Mdrn. Residential in New York City, said. “They don’t have any offer letters ready, pay stubs or bank statements.”

7. Not Talking With Your Guarantors About Their Essential Paperwork

Once you’ve gathered all your paperwork, it’s important to also remind any guarantors of what they’ll need, as “springing it all on [them] at the last minute is guaranteed to cause delays and frustrations,” Fanney said.

8. Not Brushing Up on Terminology

“[Recent graduates] don’t typically know the difference in rental versus condo versus co-op building,” Greg Moers, a licensed real estate agent at Triplemint, said. “They tend to just shop for what looks awesome and do not take into consideration the process involved with putting together a board package and the cost.”

To get you started, check out this guide that deciphers 16 confusing mortgage terms.

9. Choosing the Wrong Roommates

Fanney suggests comparing schedules and lifestyles to see if living with a particular person is really a good idea.

“You should already be thinking about things like each person’s tolerance for mess and budget, but now that you have your first full-time jobs, you’ll have to make sure the lifestyles can coexist peacefully.”

10. Not Getting Roommate Agreements in Writing

Even if you’re living with your best friend, it’s important to write out responsibilities and agreements you’ve made about the living situation. You’ll also want to outline how bills will be paid and who is responsible for what. Hopefully you’ll never need to reference this for any reason, but you’ll be glad to have it all in writing if things go bad.

11. Not Considering Apartments With Fees

We know, all those fees are the worst. But some of these upfront costs, while painful at the time you see the money coming out of your account, may mean paying less over time.

According to Chelsea Werner, a Bold New York real estate expert, many of the no-fee apartments just add fees to your monthly rent. And, if that’s the case, “although you will pay less upfront, over time it will even out, as you will be paying more per month.”

12. Forgetting to Meet Potential Neighbors

“In college, your neighbors were probably other college students, but that probably won’t be the case now,” Fanney said. “Don’t let that stop you from getting to know your neighbors and finding ones you can trust.”

13. Not Factoring in the Landlord

“It’s sometimes better to pay a premium to be with a better landlord than to pay less and be with a bad landlord that doesn’t fix anything and is hard to reach,” Lahav said.

14. Skimming Over the Lease

In a time when we all just click “next” anytime we install an update on one of our devices, it’s easy to flip to the end of the agreement and sign on the dotted line. But it’s essential you know what you’re agreeing to and negotiate things that you’re not quite on board with.

15. Not Knowing Your Tenant Rights

Tenants (and even applicants) have federal laws protecting them. And, in many cases, there are state laws that help protect you too, so you’ll want to do your research and find out what legal rights you have ahead of time.

16. Passing on Renters Insurance

Renters insurance may seem like one more expense, but just like car insurance, having it may ultimately save you money in the event of a problem. You can read about the little-known ways renters insurance could save you money here.

17. Only Looking at the Bottom Line

“Graduates are very price-sensitive, so they will usually go with the cheaper apartment as their rule of thumb,” Lahav said. “However … they don’t realize that sometimes a cheap deal is not the best deal for them.”

18. Holding Out for Perfection

Apartment hunting can be a lot like a relationship — you start out with a list of ideal qualities, but the odds of finding someone (or some place) that meets all these may not be realistic.

“Regardless of your budget, there is no perfect apartment,” Werner said. “Renting is all about tradeoffs.”

19. Forgetting About What Comes Next

“When looking for an apartment, people have a tendency to not think about a rental as more than a one-year commitment,” Werner said. But, unless you have reason to move, you probably won’t want to go through the hassle. So, that’s why Werner said it’s a good idea to “think about how that unit will fit your life in the next few years.”

Image: svetikd

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Best Ways to Spend Your Graduation Money

Sure you can just spend it, but here's how to ensure your future self will thank you.

Graduation is right around the corner and that diploma may not be the only piece of paper graduates are excited to receive. If you’re among them, it’s likely your family and friends are eager to celebrate your accomplishment, and you may be expecting some gifts in the form of checks or cash. As tempting as it may be to go out and spend this money right away, here are a few ways you may be able to put your graduation money to better use.

Begin Paying off Loans

While the stress of tests and papers will soon be off your mind, in comes the anxiety of having to repay those student loans. You’re not alone. Many students rely on loans to help them achieve their degree — the rising student loan debt is proof. Your graduation money may not be able to cover your entire loan, but it could be a good start. Since some loans accrue interest during the grace period, this money may be able to tide you over in the meantime.

You also may want to consider paying down credit card debt. If you racked up credit card debt during college and had only been making minimum payments, now is a good time to pay off any remaining balances so you can begin working on your student loan debt. (You can see how your student loan balances are already affecting your credit scores by using Credit.com’s free Credit Report Summary.)

Invest in Yourself

There are many ways you can invest in yourself after your college graduation. For example, you can pay to speak with a professional like a financial planner or debt attorney. These professionals can help you determine your financial goals and help you sort out your student loans so you can begin the repayment process. Another great investment in yourself is to join a networking group. This can be an opportunity to meet industry professionals and begin making a name for yourself. Speaking of making a name for yourself, consider investing in some professional attire!

Build an Emergency Fund

You may also want to consider “paying yourself first.” Now may be a good time to start saving your money and begin creating the perfect emergency fund. Storing your money away in a savings account can give you time to decide how you would like to best spend your graduation money. Just be careful not to dip into this when you’re looking for quick cash, as you may deplete your savings before you have a chance to put the money to good use!

When starting out in the workforce, things may be uncertain. You may look to change jobs or pursue a different career. An emergency fund can keep you afloat while you’re figuring this out. Consider putting away at least three to six months worth of living expenses.

Invest

Consider using your graduation money to make even more money. Investing in mutual funds, stocks, an individual retirement account or other investment tools while you’re young gives your money more time to compound, which can mean even more money for your future! These funds can be used later to help make larger purchases such as paying for a wedding or making a down payment on a home. Before looking to build your portfolio, consider speaking with a financial planner who can place your money in places that align with your financial goals.

Treat Yourself

You may want to set aside some of that money to treat yourself. After all, you’ve worked hard to earn that diploma and there’s no harm in celebrating this accomplishment with a gift to yourself. Consider using some of your graduation money on a purchase or experience that will remind you of all your hard work in college. This isn’t to say you should blow all this money on a frivolous or impulsive purchase, but life’s accomplishments should be celebrated. Your college graduation is no exception.

Image: stockce

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