7 TRICKS: How To Save A TON Of Money When Renting A Home

What's of you guys? It's Graham here. So, I don't think this topic has really been covered much before on YouTube. We've all been focused on buying properties, investing in them, and then renting them out to tenants as a landlord. But what if, just hear me out here, what if you are the tenant? Like, what if you're renting a home for yourself to live in? I think that's a hugely underserved topic here on YouTube, so we're gonna change that up today.

This video is really meant to be a complete tutorial and guide to everything you need to know when you're renting a home. That includes everything you need to know, everything you must get in writing, all the biggest red flags to look out for when signing lease agreements, and also the best ways and the best techniques to negotiate a very low price and save a ton of money anytime you're renting a home. So, it's basically everything you need to know.

And by the way, these types of videos always take me forever to plan, to film, to edit, and post up on YouTube. So, if you wouldn't mind just destroying that like button if you haven't already, we'd be good. That's it, let's get in the video.

Okay, so step one. The first thing you must do anytime you're looking for a rental is to make a list of must-haves that you cannot live without. For example, be totally clear with how many bedrooms you need, how many bathrooms you need, if you need a yard, if you need a pool, if you need a car elevator to take your Lamborghini up to the master bedroom, and so on. These are items that should be non-negotiable that you cannot live without.

Now, with this, you should really also figure out how much you want to spend on rent every month. Now, my recommendation is that the rental payment should not exceed three times your monthly income. So, this means if you're making $4,500 a month, your rental payment should not exceed $1,500 per month. Now, obviously this is just a rule of thumb. Some people don't mind paying 50% of their income towards their housing; other people wouldn't want that to exceed 20%. So, it really depends on the individual, but my personal recommendation is that the rental payment should not exceed three times your income.

So, step two is to then see as much as you can on the market. I don't recommend just getting impatient and going and leasing the first place that you see. Don't do this. I think it's a good idea to see as much as you can on the market, get a really good understanding of what else is out there, start to see what the going rates are for places, and this is also how you end up getting the best deal.

Now, here in the United States, I highly recommend that you look on Craigslist. I think it's totally underappreciated; you can find some really amazing leases on there, and this is probably the best website out there if you want to try to find something that's a really good deal, renting below market value. Many landlords with Craigslist have absolutely no idea what they're doing; they have no idea what their place is worth, and they use really, really, really bad pictures that are shot with like the wrong side of their iPhone. So, if you watch the site very closely, you can often snag a pretty good deal.

Now, in addition to sites like Craigslist, I also recommend using Realtor.com, Apartments.com, Zillow, Trulia, Redfin. My recommendation is probably to use all of them because you'll find that some rentals are on like one site but not another for some reason, because landlords have no idea what they're doing. So, I recommend just watching all of them to try to find the best deal you can.

Now, one huge tip I can give you in doing this, and this is how you'll end up getting the best deal possible at the lowest price, be the first one to call on it and be the first one to see it in person. And also, when you're the first to see it and you see that it's a really good deal or you can get it under market value and it's the perfect place, submit an application immediately. Do not wait! Do not try to be like, “Oh, well, I'll do it tomorrow morning; I'm tired tonight.” No, no, just get it done immediately.

So, step three is that when it comes time to submit an application, make sure you ideally have everything ready ahead of time. As a landlord myself, when a tenant has all of their stuff together, it just really sets such a positive tone from the very beginning that they're prepared, that they're organized, and that because of that, they're likely to take good care of the house and they're likely to pay the rent on time.

Now, in terms of having everything together and everything ready to go, I highly recommend you get a credit report together ahead of time. Now, even though most landlords will probably want to do their own credit check, this is totally fine. At least if you have this, it can give them a bit of a ballpark about where your credit is. The second thing is that you should have some proof of income already ready to go. This means you could have a W-2, or if you're self-employed, maybe a few months bank statements or a tax return showing proof of income. A third is I recommend you have two to three months worth of bank statements if the landlord asks for them.

I would say maybe 30 to 40 percent of landlords will ever actually ask for sort of bank statements. I typically do because I want to make sure that there's nothing weird going on there because I've had bad experiences in the past. So, just be aware that this might be something that they may want to see. And lastly, have a copy of your driver's license ready to go so that way when they ask for it, you could just submit it along their way and it's easy.

Most landlords and property management companies will have their own application that they'll want you to fill out, so I recommend as soon as you get it, fill it out as quickly as possible and send it back to them immediately. I can't stand the tenants who love the place, they ask for an application immediately, but for some reason it takes them like five days to get it back. Then when they finally get it back, they're like, “Sorry, someone else took it.” And they're like, “But no, we really wanted it.” Well, if you really want it, you submit it back immediately, especially when you find a really good place and it's a really good deal. Time is of the essence.

Now, step four is negotiating the rental price and the terms. Now, this is the really fun part here. Of course, though, if they price their place really aggressively to rent it out immediately and it's under market value, don't negotiate the deal; don't lose it, just get it. It's more important to get the right place. But if it's been sitting on the market a little while or you think you can get the price down, these are some of the techniques that I've used in the past that work extremely well.

I say this as both a landlord who's rented out places to tenants, and I also say this as a real estate agent who has represented probably over a hundred leases in the past for clients who are renting homes. And this is what I do. Now, the first technique is really nothing new; it's nothing revolutionary, but just offering five to ten percent below what they're asking and see if they go for it.

Now, sometimes this could be a little bit aggressive, but every now and then you'll get a landlord who just says, “You know what, fine. I'll go for it,” knowing that they won't have to worry about renting it in the future. They won't have to keep coming back and showing it, and they'll just take a done deal right now. Even though it might not be at the top price, you know what? At least they haven't rented. Especially do this if you're a really good tenant with great income and great credit. As a landlord myself, I would rather take a lower price for the perfect tenant than get above market price for a tenant that could be risky or could be problematic in the future.

Now secondly, if they say no to the first request, then see if you can negotiate the price down by offering to move in sooner. Now, from a landlord's perspective, every day a unit or a home sits empty is lost income in their pocket. So sometimes if you just tell them, "I'll move in immediately," and you're going to have no more lost rent whatsoever, sometimes just mentioning this gets it in their head that, wait a second, they're actually saving some money by having you move in sooner.

Now third, if the landlord just doesn't want to budge whatsoever on their price and they want their number, see instead if they'll offer you some free rent. Now doing this does two things for you; this means it averages out to be a slightly lower price over the course of a year when you get some free rent, and from the landlord's perspective, it means they get their asking price. For example, if the landlord is asking $3,000 per month in rent, you could offer $2,750. But if they say no, you can go back to them and say, “Okay, I'll give you the $3,000 per month if you just give me one month of free rent.”

Now, over the entire year, this averages out to be the exact same thing to you as if you would pay $2,750, but from the landlord's perspective, they think to themselves, "Whoa, I'm getting my $3,000 per month," and they're more likely to take it. But that's the technique I've used a lot as a real estate agent, and I gotta tell you, it works wonders.

Now a fourth way to negotiate is that you can offer to prepay some of the rent ahead of time, and landlords love this. For example, you can offer to prepay the first three months of your lease or pay your rent in three-month increments. Sometimes the strategy works really well with landlords who just want the peace of mind that they're going to be paid on time.

And finally, the last way to negotiate a lower rental price is by signing a long-term lease and locking in your rent long term. Doing something like this works tremendously well when you know you're gonna be living there long term and you don't want to risk the landlord just like raising the rent and jacking it up a considerable amount the next year to try to get the most amount of money possible.

So at least you can tackle all of these things ahead of time and lock in the lower rate long term. Now, one more thing I want to throw in here really quickly as just an additional step: find out who is going to be managing the property and then see how attentive they are. Like, if it's a management company, are they easy to be in contact with? Are they attentive to any of your questions or concerns? Or if it's the owner, who's renting it out, do they live nearby? Do they live on-site? Are they going to be doing repairs themselves, or are they going to be outsourcing it to another company that you need to contact?

Now, I've noticed that generally speaking, management companies tend to be extremely professional and have a lot of business practices already in place by the time you rent. But some of the do-it-yourself landlords, on the other hand, can be an entirely different story. You'll find that some landlords absolutely hate being a landlord, and they just want to be as hands-off as possible.

Now, sometimes this works to your advantage because they're not gonna be on you about anything; they just let you do your thing. But on the other hand, you also get landlords that refuse to get anything repaired. They don't want to deal with it; you can't reach them; things go deferred and it's just a nightmare to deal with.

Before I found, you have the exact opposite of that with landlords that are too involved because they have nothing better to do. This is especially common with what I like to call retired landlords that don't really work, they have nothing to do, and this is their main profession. So they sit around all day and they're bored, and they just invent problems to keep them busy throughout the day.

And those people could be nightmares to deal with because they thrive on drama because they have nothing to do. So at least ahead of time, figure out some background on the landlord if they seem like a good fit and if they seem like the type of landlord you even want to have in the first place.

All right, so now I think we're on step five. So assuming you found the right place, you negotiated a good deal, and you have a good feeling about the landlord or property manager, it's time to then review the lease agreement.

Now here is my biggest piece of advice that you must do no matter what in every single situation. And that smash the like button! Kidding! But for real though, this is actually something that's really, really, really important, and that is get everything in writing, no matter what. Always!

And it's so sad to say, but a verbal agreement in a handshake means absolutely nothing in real estate. I have seen it before where landlords have said to the client's face, "Yes, this is going to be included. Let's shake on it. There you go," and then it's not included. And then the landlord says, "I never said it was included. It's not on the rental agreement. I didn't agree to that," and we're sitting there like, "You literally agreed to this, and you shook the guy's hand, and I was a witness of this. We all saw it."

And alas, well, it's not on the rental agreement. Sorry, guys. And guess what? The landlord is right about it because if it's not on the rental agreement, verbal agreements mean nothing. So I think this goes without saying; if there's anything that's ever agreed to when you shake the other person's hand, you say, "Okay, well, here's the rental agreement. Let's just write this in and we'll initial right next to it," because that's what you need to do.

Now, in addition to that, you're also going to need to read through the rental agreement word by word to make sure there's nothing unusual in there. Now, here are some specific things that I like to pay attention to. The first one is when does the lease start and end? The second is what is the security deposit? The third is what is the late fee and when is the late fee applied?

Also, you want to find out if there's any parking included and whether or not there is storage included. You also want to find out who is responsible for gardening and whether or not any pets are allowed, and if there are pets allowed, if there are any pet restrictions. You also want to find out if smoking is allowed, which, by the way, is a really nasty habit. You shouldn't smoke, so don't do that, but if you are a smoker, find out if that's allowed.

You also didn't want to clarify which appliances are included in the lease and if they are included, if they come with or without a warranty. You'll also want to find out which utilities are included, if any, and whether or not the owner is okay with subletting. And most importantly, like I had mentioned before, all of these need to be explicitly clarified and written in the lease agreement with no exceptions to this. Even if the landlord seems like the nicest person in the entire world and just says, "You know, trust me; we don't need to put it in here, just trust me on it," you can trust me! Don't trust them, okay?

So with that out of the way, I don't need to be a Debbie Downer with that one. But number six, before you move in, make sure you take pictures of everything. This is really to document the condition of the home prior to your move in, so that way you aren't held responsible for anything that was pre-existing. Like they say, a picture is worth a thousand words.

So make sure you document everything with photographs prior to your move in, and you get any close-ups of any defects, cracks, damage, or anything else that's noticeable. Then you'll send all of this to the owner and, you guessed it, have them verify receipt of that email in writing. So just take the 20 minutes it takes to photograph everything just before you move in, so that way it'll help you out tremendously by the time you leave.

Now, step seven, when it comes to doing this, is make sure you get renters insurance. Now, this is separate insurance that covers you and your belongings in the event of any damage. Many tenants seem to think that the landlord's insurance policy should cover their couch in the event there's a leak and it ruins their amazing leather couch. No, no, it doesn't. Instead, you'll need your own renter's insurance policy for anything that might come up.

And this is insanely cheap; I've seen most renter's insurance policies between $100 and $200 per year that can cover you between $20,000 up to $150,000 worth of damage. Seriously, just always do this no matter what because it's so cheap. I write in all of my lease agreements that the renter is to carry renter's insurance at all times throughout the duration of their lease just to protect me, and I want to make sure that all of their stuff is protected and there's no confusion about if something happens, who's covering what.

Number eight, and this is something I didn't plan, but I just thought of it and I thought it was so important to put in this video because a lot of people will eventually at some point come across this, and these are rental scams. Now, what a lot of these scam artists do is they take real homes that are actually available for rent or for sale, and then they post them up on Craigslist or Apartments.com or anything else where they can input it themselves.

Then what they do is they price the rental under what it should be renting for, so a lot of people go and see this great deal and then inquire about it. And then typically they'll say, “I'm not in the area right now. I want to rent it to a really good family." Almost always, they say they're in the military because they feel like people will trust them more if they're like serving for the country.

So what they'll end up doing is saying, “I'm out of the country, but if you just put down a thousand-dollar deposit, I'll have the key sent to you really quick," or something like this. They just want a deposit; they just want anywhere between $500 bucks and sometimes $2,000 dollars to hold this property so then they can move in. Then what happens is that they often ask for something like cryptocurrency, a Western Union, or sometimes even like a random wire transfer, sometimes even overseas because that's where they're located. And then what happens is once you wire the money, you never hear back from them.

Now, some of the ways to protect yourself with this is always meet and see someone in person at the property. Typically, these scam artists will never actually have access to the property. So if you don't see the home in person, do not rent it! Do not rent a home remotely, and do not ever send any sort of deposit or anything like this until you have a signed lease agreement. And also, of course, I think it goes without saying that if a deal sounds way too good to be true, it's probably a scam.

But now, with all of that said, assuming now you rented a place that's not a scam. Because don't, don't get scammed! That's it! And those are some of the best techniques as a tenant to go and get a great deal on a rental property long term that you're gonna be really happy with.

This is basically my specialty that got me started in real estate to begin with—leases. This is everything that I've learned from A to Z that helps tremendously well from a tenant's perspective.

So, with that said, you guys, thank you so much for watching. I really appreciate it. If you guys enjoy videos like this, make sure to smash that subscribe button, destroy that notification bell so YouTube notifies you anytime I upload a video and you could be a part of the notification squad. Also, feel free to add me on Snapchat and Instagram; I post there pretty much daily. So if you want to be a part of it there, add me on there.

Then finally, I have a private Facebook group for anyone who's interested in real estate, real estate investing, real estate in anything real estate. Add yourself to that group! Links in the description. Thank you again for watching, and until next time!