Renting your first apartment or house

From: Financial Consumer Agency of Canada

What to consider before you rent

Before you move out on your own, consider the costs. You may want to rent an apartment a house or a room. These are called rental units. Wherever you live, your basic expenses will be more than just the cost of rent. Knowing the costs of renting ahead of time will help you prepare a realistic budget.

Renting or buying

Instead of renting, you may be considering buying a home. Deciding whether to rent or buy a home depends on your needs and financial circumstances.

If you choose to rent, you should not have to pay for:

  • real estate agent fees
  • property taxes
  • home maintenance costs
  • utilities such as water if included in the rent

Learn more about maintenance and repairs in this guide from the Canada Mortgage and Housing Corporation (CMHC).

Other advantages of renting include the following:

  • there is no long-term commitment
  • if something breaks, and you’re not responsible, a superintendent or landlord will usually replace or repair it
  • renting may be cheaper than buying a home

Use the Affordability Calculator to compare your options based on your financial situation.

Check your credit report

Your credit report can affect your options when you decide to move out on your own. Some landlords may check your credit report to be sure you’ll pay the rent on time.

If you have no credit history, or have had credit trouble, a landlord may ask you for a guarantor. A guarantor is usually a parent or guardian with a good credit history. The guarantor agrees to pay for you if you’re unable to pay your rent.

Learn more about credit reports and scores.

Rent within your budget

Spending too much on rent may make it difficult to cover your other expenses or save for the future.

In general, your rent and household-related expenses should not be higher than 35% of your gross household income. Your gross household income is all income you receive before taxes and deductions. For example, if your gross pay is $4,000 a month, limit your housing costs to $1,400 a month.

While you get ready to move, stay organized, stay on track and stay on budget.

Use the Budget Planner to plan your budget.

What you should know about rental agreements

A rental agreement, or lease, is a contract between a landlord and a tenant. The landlord grants the tenant the right to occupy a rental unit. In return, the tenant commits to paying rent. The contract may also include other terms and rules. When you sign a rental agreement, you’re agreeing to respect those terms and rules.

A written rental agreement is an official record of what you and the landlord agree to. If there’s a dispute later, the rental agreement helps to settle it.

If you have a guarantor, the landlord will have them sign an agreement that describes their responsibilities.

Find out what your rental agreement or lease should include.

Security deposits

Your landlord may ask you to pay a security deposit before you rent a unit. This is also known as last month’s rent. Generally, the security deposit can’t be higher than the cost of one month’s rent.

In some provinces, you have to do an inspection before you move in. This ensures that you won’t be held responsible for the damage that already exists. You should do the inspection with your landlord. Document and take pictures of any visible damage.

When your agreement ends, leave the rental unit in the same condition as when you moved in. The landlord will typically use your deposit to pay for the last month you live in your rental unit. If you don’t, the landlord may use the deposit to cover potential damages.

There can be exceptions in certain provinces or territories.

Learn more about lease and rental agreements.

Subletting your apartment or house

If you need to move before your rental agreement expires, you may choose to sublet your rental unit. To sublet your rental unit, you need to find someone who will live there. They have to pay rent and follow the requirements set out in your rental agreement. You also need permission from your landlord.

If the person you’re subletting to doesn’t pay the rent or causes damage to the rental unit, you’re responsible.

Living with a roommate

To reduce your expenses, consider sharing the cost of rent, utilities and other expenses with one or more roommates.

If you decide to live with someone else, discuss your living arrangements and shared financial responsibilities.

For example, figure out the following:

  • how you’ll divide rent
  • how you’ll divide the security deposit
  • if you’ll share bills and expenses or pay for them separately
  • what each of you will buy for the rental unit

Make sure you understand what you’re responsible for.

If 2 or more tenants sign the same rental agreement, each is equally responsible for payments and damages. If each of you sign separate rental agreements, you’re only responsible for what’s in your own written agreement.

If your name alone is on the utility bills, you must pay them on time. Missing a payment for your rent or utilities could hurt your credit score.

Tenant and landlord rights and responsibilities vary across the country.

Learn more about the provincial and territorial laws that apply to you.

Costs of renting

Before you rent, make sure you consider all associated costs. These costs may include the following:

Utilities and telecommunications

You may need to pay fees to set up new accounts with utility, cable, internet, or telephone companies. You may also need to pay security deposits on these accounts.

Moving expenses

You may need to add upfront moving costs to your budget. These costs can include truck rental, movers, moving boxes and other supplies. You may also need to take time off from work.

Get moving advice for your move.

Renter’s insurance

If you rent, consider getting tenant’s, or renter’s insurance.

Consider getting enough insurance to cover the value of:

  • damage to, or loss of, your possessions
  • personal property stolen from your car
  • accidental damage you cause to any part of the rental unit
  • injury caused to visitors

Learn more about the different types of home insurance and the coverage they offer.

Outfitting your place

If you’re moving out for the first time, you may need to buy:

  • furniture
  • dishes
  • kitchen utensils
  • small appliances
  • bedding
  • towels
  • cleaning supplies

Ongoing costs of living on your own

Depending on what your rental agreement or lease covers, you may also need to pay for:

  • parking
  • utilities such as hydro and heat
  • telecommunication services
  • laundry
  • snow removal
  • lawn maintenance

The Government of Canada offers a benefit that helps low-income renters with housing costs. You may be eligible for a tax-free one-time payment of $500 if your income and the amount you pay on rent qualify.

Learn more about the One-time top-up to the Canada Housing Benefit.

Protect yourself from rental frauds and scams

Watch out for rental scams. In general, if a deal sounds too good to be true, it probably is.

Warning signs of rental scams may include:

  • the monthly rent is much less than the current market rate
  • you’re asked to leave a deposit without any formal rental agreement or lease in place
  • you’re asked to send a security deposit to a landlord outside the country
  • you’re offered a rental unit without a background check
  • when you ask about the rental unit, you get an email that sends you to a website asking for personal or financial information
  • ads show pictures of the outside of the unit only, or pictures that don’t match the actual property

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