Rentwise! Chapter One -- What Can You Afford?

AFFORDABILITY: Many people, especially young first-time renters, get into financial trouble when they don't plan for expenses. The following are up-front cash requirements for first-time renters:

Damage deposit: $150 and up. Landlords often ask for a refundable deposit equal to a month's rent.

Rent for first month: (See the Housing Types chart for approximate costs.) The entire amount is due when you sign the lease and move in. Your rent should equal about one week's pay (before taxes), or about one-quarter of your gross monthly income. Many landlords use this formula when deciding if you can comfortably afford a unit.

Utility deposits: If you've rented before, deposits will transfer to your new address with just a phone call to the utility. First-time renters will need cash on hand to start service.

Electricity: $50, 2 pieces of ID, 24 hours notice.

Water: $15 turn-on fee. No deposit unless renter has been cut-off more than once or owes the company. A $25 deposit is required along with payment of/on old bill.

Gas: Some rentals require natural gas for appliances and heat. No deposit is needed if credit is good. In cases of poor credit, an amount equal to the 2 highest bills at that address last year is demanded. This can run from $50 to $500. For best service, give a week's notice.

Phone: No deposit if credit is good; people with no credit or poor credit pay $75 which is returned after a year of timely payments.

Budget experts say that rent plus monthly utilities should take no more than one-third of your gross monthly income. Unfortunately, lower-income families frequently must spend 50% of income for housing costs. If you have unpaid bills from another address, the utility companies will work with you to make special arrangements to continue service, but don't abuse the privilege! If utilities are cut off for more than a few days, you may get evicted. Those trying to get service under a phony name can be prosecuted for fraud.

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