How to navigate the rental market - a guide for the first-timers
The Australian rental market is the tightest it’s ever been and it’s no fun if you’re faced with the prospect of finding a new place to live. The demand for rental accommodation is ever-increasing, and the available supply seems to have dwindled, leading to what many are calling a rental crisis.
According to the Australian Bureau of Statistics, (ABS) since late 2021, the rental market has tightened, and market rents have been on the rise ever since. Large rent increases have become common for all properties regardless of whether the tenants are new or existing, and according to the ABS, in February this year, over 60% of properties with new tenants had rents that were around 10% higher than in February 2022.
So why is it that we – in the Lucky Country – are facing such a rental crisis? According to the Australian Housing and Urban Research Institute (AHURI), there are a few reasons:
- There simply aren’t enough homes to keep up with population and household growth.
- International borders have re-opened since the pandemic, giving rise to an influx of international students and workers who all need accommodation.
- AirBNB has impacted housing availability, particularly in coastal and tourism-rich regions, as investors remove their properties from the rental market to chase the more lucrative holiday market.
It might be tight out there, but if you’re a first-time renter, there are definitely some steps you can take to navigate this difficult market.
1. Create a budget
If this is your first foray into the rental market, it’s important to set a budget and stick to it. Moving can get pretty expensive, as you’ll need to have the cash to pay for the bond, some rent in advance and also for connecting power and the internet. Then there are the ongoing costs, such as your rent, utility and internet bills and potentially also contents insurance. By developing a budget you’ll get a good idea of how much rent you can afford and whether or not you’ll need to share the property with others who can contribute to the rent.
2. The internet is your friend
Whether you are just starting to scout for houses to rent or you’re ready to organise your necessary paperwork, the internet is your best friend, and it’s opened a lot of opportunities for renters and landlords alike. If you are a rental first-timer, you will benefit significantly from scouting online using the many online rental property websites and search tools. Without having to go anywhere, you can see the condition and location of properties that may be of interest. You can also often request some of the necessary paperwork online so you can get started on your application. From scouting to applying, the web provides services that enable first-time renters to get familiar with the process.
3. Develop strong application documentation
A good renting history helps you to develop a strong application. But, as a first-timer, how do you develop this when you don’t have a record? The answer is in the documentation. Be sure to have a strong foundation when you provide your documents. Some of the necessary bits and pieces you’ll need are:
- Official photo identification
- Pay slip, bank statements, or recent utility bill (demonstrates capability to pay the rent)
- Proof of employment
- Contacts for references (preferably those who are unbiased such as an employer)
NOTE: Ensure your application acknowledges your absence of rental history but reinforces the reasons why you would make an ideal tenant. This could include things such as always keeping your surroundings clean and tidy and being more of a homebody than a party-goer. It’s also a good idea to “dress to impress” so you make a good first impression when you meet the owner or rental agent.
4. Understand the paperwork
It’s important to understand all of the paperwork that comes with renting a property, including the residential tenancy agreement, the bond, and the condition report.
- The bond is a deposit you pay before you move in. It’s the landlord’s security for any times when you may be unable to pay your rent or have damaged the property or any of the contents that come with it. The bond is separate from the rent and will be refunded to you when you finish your tenancy provided you’ve kept your rent up to date and there is no damage
- The condition report is the document that states the condition of the property and its contents when you first move in. Make sure you check it carefully and it’s a good idea to take pictures of the property before you move in – just in case you end up in a dispute about who needs to pay for any damage or cleaning. Both the landlord and the tenant must agree on the condition of the property and sign an agreement
- A residential tenancy agreement is a legal contract between you and the landlord. The contract should outline the rent amount and payment method, the length and type of tenancy, the required amount of bond, and other details and conditions, such as any contributions to water rates and the amount of notice that needs to be given to vacate
Final Thoughts
Being a first-time renter can be a bit nerve-wracking, especially in such a tight rental market. Finding the money to cover the bond, rent in advance and moving expenses can be a stretch, but if you need a little financial assistance, we’re here to help. Just take a look at our cash loans to $5,000 to find out how quick and easy it is to get your hands on some extra funds. Once a loan is approved, the cash is usually in your bank account within a few hours. Get your application in now - so you can be ready for hassle-free renting!