Budget and Costs

The 28% Rule

Many landlords recommend that tenants budget 25-30% of their gross income for rent. As an example, if your monthly income is $3,000, you should budget at least $750 - $900 for rent. 

Security Deposits, Utilities, Etc.

Most landlords require one month's rent plus a security deposit (usually equal to one month's rent) upon signing the lease. Moreover, you will likely need additional cash to cover moving expenses and utilities (power, telephone, etc.). For customers who have no credit or poor credit, utility companies like SDG&E often require a deposit in order to start service. You should plan on having enough cash to cover all of these expenses as well as a reserve amount for unforeseen expenses.

Discuss cable and internet providers, all utilities including water and sewer with your landlord to understand any requirements and expectations before signing a rental agreement.  Understand how much flexibility you may or may not have in choosing some of these providers.

Credit Reports and Credit Scores

A credit report is a document that lists a person's debts and history of borrowing and repayment. A credit score is a measure of the person's overall creditworthiness. A credit report and/or score are used by a landlord to judge a tenant's financial reliability in making monthly payments. Therefore, having a good credit report and score is very important in securing a rental property.

Landlords will often want to view your credit report and/or credit score as part of the application process.  By federal law, you are entitled to one free credit report from each of the three major credit bureaus each year. A good strategy is to bring copies of that free credit report when viewing properties, so that you are prepared to give it to landlord with the rental application. For more information on free credit reports, go to reviews.com, www.ftc.gov, or www.annualcreditreport.com.

Some landlords prefer to collect a fee from you for the purchase of the credit report. California law stipulates that landlords can collect a maximum fee of $30 for a credit report. The landlord must also provide a receipt that itemizes how the money is spent on the report, give the applicant a copy of the credit report if requested, refund any unspent portion of the fee, and return the entire fee if a credit check is not performed.

Renters Insurance

Renters insurance protects against property losses such as losses from theft, fire, vandalism, or water damage. In addition to property coverage, renters policies may offer protection against personal liability, guest medical benefits, additional emergency living expenses, and credit card protection.  Contact your insurance agent for more information.

Note to International Students

Without a U.S. Social Security Number it is impossible to obtain a credit report from a U.S. credit bureau. Many landlords may be adverse to accepting tenants who cannot provide a U.S. credit report. Therefore, international students are advised to prepare additional documentation of financial resources (scholarships, bank account funds, etc.) as part of a supplemental packet of information that can be provided to landlords.