Sydney Rental: How to Rent in Sydney Guide
There are a few key factors that will determine if you are living in a great place or you are loosing money on your decision to rent in a particular place. one of the most important issues to consider is the way of living. your financial state, the condition of the Sydney Rental, your level of tolerance, available places at the time you look for accommodation, and your key demands from Sydney Rental market.
In this article, I will review all the financial aspect of renting a place in Sydney Rental market and how to position yourself to the best possible outcome, with whatever financial state you are at the moment.
Before you go to Sydney Rental market to rent a place, you must remember one thing about renting and that thing is: Renting must be temporary!!! as it is like throwing money on the rocks! therefore, you must plan in advance how you are going to use this strategy in order to advance to the point where you own a place of your own.
As renting is literally paying other’s people mortgage especially in the Sydney Rental market we must make sure that this is our last option altogether, and the only advance to this option when it’s your last option. why? because the longer we can pros-pone this kind of living, the better we will be long term financially. In today’s Sydney Rental market condition, it is important to prepare in advance for the possibility that we will need more years in order to be able to buy our own place.
The reason why house prices in Sydney Rental market are so high is because of many factors outside your control and one very big reason which you control altogether, and that is your demand for rent. You see the power to create affordable houses lie within the renters, not the owners! if all the people that rent will stop renting house prices will go down sharply, as they will be considered bad choice at an overpriced investment. so the number one factor for rent prices is YOU, and not the landlord! (a good example will be a place where no one wants to live will stay vacant and lose all value, as it’s clearly getting no return at all).
The first step in the renting cycle – Health check:
We must first understand our financial situation. when a person goes to the bank to ask for a mortgage the bank will examine the credit level of the individual and based on that he will decide what is the amount this person can borrow. you should do the same before going out there and filling rent application.
You must understand what is the “real” status you are at, and what can you buy with your paycheck. the best way to do that is to conduct a family budget, where you track all your expenditure and income and review by it what is the amount you can put aside for rent. a rule of thumb is the rent can’t be more than 40% of your gross income, going above that will put you in a financial pressure when unplanned expenses will show their ugly faces.
After we understand how much money we have on hand per week for rent, the next step must be, based on the figure we have, where can we rent in this Sydney Rental market, what can we rent, and what will be our overall way of life.
There is one important thing to remember when renting and that is the trade-off between the quality of the suburb to the quality of the place you rent per known budget. if you go for the better place you will live in a less good suburb and vice versa.
The best way out there is to ask friends and family about areas like east south north and west, if you don’t have anyone you can skip this step and use the online scene for that here:
after you made a good and informative research, you are now ready to understand the differences between the type of accommodations and what it means to you.
The third step – understanding the type of accommodation:
Apartment/Unit – this is the most basic way of renting. it usually the most affordable to most people. within this category, there is a scale of differences that you must take into account when making your overall decision.
- A renovated apartment – this option is attractive to the naked eye tenant, but usually, the owner wants monetary compensation, so here you must review if the compensation is fair, or outrageous. if you are after the best cost for money this is NOT a good option, you better off trying to find a place that you can with little effort make look much better than it looked in the inspection.
- A new apartment – this is the most expensive option of this class, and in terms of cost for money, this will be the worst option, so if you are after the right economical option try to avoid this option.
- Old apartment – this is the gold mine of the real estate market, as long as you can find one that looks good and feels good to you. remember, when you get in, with some cleaning effort you can make any place feels like home.
- An apartment in a complex – these are overpriced places where you need to pay extra for the fact you have a pool and a gym. try to go for those only if you can’t find anything else. you see it will be cheaper for you to have a pro gym membership than to pay extra for the unequipped gym in the complex, and you can go to a paid pool when you want to, this will be much cheaper and a better financial decision.
Villa – this type of accommodation is the same as an apartment, but it’s on the ground, and you have fewer neighbors. the main advantage here is that you have some privacy compared to an apartment, the disadvantage is the price, as there is no real difference between this type and a regular unit, (they usually doesn’t come with any yard, or very small that resemble a porch) you are expected to pay for this privacy, the only question you must ask and answer is how much (make sure it’s not more than 10%, otherwise stay clear of that option, it’s not worth it).
Granny Flat – this is basically a self-sustained Vila when you have everything you need from a normal house. the main disadvantages are the fact that the owner live just a few meters from you, it’s very small compared to a villa and you will have to share the back yard with the owner (and you might feel as a guest there). the big advantage is it’s cheaper than a villa.
Town House – this is a two storage house that is built on a smaller land size. it comes with a small/medium yard. the main advantage here is the fact that you can find some with a very nice yard. the main disadvantage is the fact that these places are not bigger than an apartment, but yet priced higher. use the same 10% rule here to avoid financial mistakes.
House – this is the most expensive option. houses have space, back yard, maybe a pool and car spots. and you will be asked to pay for all of them. for financial reasons, I would advise avoiding this option at all cost. think of it this way: you can buy tickets to a concert the regular for $100 and the gold one for $1,000, now you will see OK from the regular spots, so why lose $900? the same goes here when you mentally understand that by agreeing to pay more you actually losing money, everything will be all so clear for you.
The fourth step – research the specific place you consider:
so by now you found a few places that you want to inspect and you made a list, and you ready to go and tap into the Sydney Rental market. well, don’t go yet. now you can with a few keystrokes of a button review the market value of the proposal. what I mean by that is you need to make sure that the asset that you are considering is not over priced. DO NOT get in a place which is overpriced, it’s like losing money, but the really bad news is, you are losing twice: once by helping an investor paying off his mortgage faster, and guess what the sooner he will pay off his mortgage his back out there competing with future you on another real estate property!!! and twice by overpaying you hurt your future self from buying your own property!! DON’T EVER OVER PAY, IT’S A DISASTER TO YOUR FINANCIAL FUTURE!!!
use this website to see old rent prices to check 2 things: Historical Property Prices
- check that the place that you want is not overpriced in today’s Sydney Rental;
- check the trend of the rent in today’s Sydney Rental, do you see that it is raised proportionally? too quick?
- try to avoid places where the real estate agent is just basically greedy!!! his greed is coming from your pocket!!!
There is no second chance to impress so do try to wear business clothes. (think about it this way: if the agent wears professional clothes, you should, at least, match his efforts) you see people in the western world are still making short cuts based on stereotypes, for example: if you see in a hospital a man with a white coat and medical equipment, you will assume he is a doctor without even checking that he is in fact a doctor. so by wearing business clothes you are telling the agent you are ready to make a business decision, and that is what he looks for in the interaction with the inspectors.
another very good advice is to interact with the agent, ask as many questions as you want, this will show them that you are interested in the place, and you are ready to make the decision. but be smart, ask questions that will help the agent understand that you are serious, and if you are ready to commit ask when can I move in? what is the lease period? where is the application? can I have your card? anything that mean: let’s sign now! even if it won’t happen now, at least, the agent will think that he can count on you to commit.
The best advice I can give you here is to make sure your application will stand out from the crowd. and the best way to do that is to make sure it looks like a business plan. but here the components of the application will be a bit different.
our main objective in the application is to overcome all the mental obstacles an agent might have with regards to any tenant. mainly: will the tenant be able to pay on a regular basis? will he keep the place clean and tidy? can I count on him to be a good neighbor? and overall what type of a person is he? a one that I can count on, or do I have my doubts?
The ingredients of a successful application:
- Long term savings; (shows stability and that you can manage your financials).
- Paychecks – from the last 3 months (shows you have the financial means to rent, and shows that the rent won’t be too high when taking your overall way of living into account);
- Recommendation from your superior manager – this will help establish the fact that you won’t get fired, at least not anytime soon.
- General ledger – shows your record of paying on time (unless you never rented before);
- The 100 point test documentation – allow the agent to make sure you are a real person;
- Written recommendation from your previous agent (the best way to get this, is to offer to give him a recommendation on their website);
- making sure you are putting all these together in one easy to read and easy to follow document.