By Gretel Ragoonanan & Justin Nicholas
Some persons may have been expecting that perfect Maraval condo to drop to their desired budget since Covid-19 hit our shores, but in reality that price would hold firm for quite some time because of the endless demand for the area. Instead of waiting for the ideal real estate market here are few tips to navigate through the current and potentially daunting real estate jungle as a young adult.
Preparation
Rental hunting without a plan is a recipe for disaster. Having a trusted real estate agent at your side would increase your success rate tenfold. Currently the real estate industry of Trinidad and Tobago is unregulated but is soon to come under law. Ensure the agent of choice is FIU registered as well as a member of either Trinidad and Tobago Real Estate Association (TTREA) or Association of Real Estate Agents (AREA) to receive the highest level of service. If searching independently there are a number of platforms one can use to conduct searches such as Facebook Marketplace, Pin.TT or multiple listing sites such as MyBunchOfKeys or PropSnoop to name a few. Clearing a couple weekends off is also suggested as it is unlikely to find the perfect rental immediately. It is also recommended to keep a few options on hand before making a final decision. One cost effective suggestion agents provide is to find a compatible roommate to split costs before your first viewing. Energy efficient appliances and negotiating rent through long term leases are also additional cost effective options if available to you.
Location
Location and price go hand in hand and with the steady increase in prices in all areas of the industry over the years. So, more desirable locations have become out of reach to a number of persons who are looking into the rental market. Namely upscale western communities or most rentals near the capital. Due to the influx of expats and their easy access to US currency this created inflation in the market that is still felt today. However, there are still many affordable noteworthy locations that are up for grabs depending on a person’s desired location. If one needs to be close to the capital an affordable rental option can be areas such Aranguez and Barataria compared to prices close to double in areas such as Maraval or Woodbrook. Persons interested in central Trinidad would find that rentals have higher availability, better affordability and access to amenities is quite convenient. South and East Trinidad would follow in terms of affordability. Factors such as gated communities, condition of property, finishing and fixtures would affect the price along with location. For an in depth search for a property that suits your needs feel free to reach out to your trusted real estate agent.
Know your Landlord/Agent
It is equally as important to know the desired rental as well as knowing the potential landlord and his/her agent. In some cases, the potential for interpersonal conflict outweighs the desire for that particular apartment. Personalities and ideals may not always match and there may be a plethora of rules and regulations that may not have been catered for in the new abode. It is recommended to keep these factors in mind as well as gather further information concerning the nature of the proposed agreement beforehand from the landlord or agent to prevent wastage of time. Some common concerns usually pertain to utilities, pets, parking, guests, furnishings, repairs, number of tenants and anything that may affect the quality of life at the new rental. Similarly to a landlord or agent conducting a background search on a tenant, a quick internet search on the proposed landlord can reveal enough information to calm any wavering concerns.
Required Documents
Most, if not all landlords and by extension real estate agents will require a client to submit a few documents to be considered for tenancy. These would include two forms of ID, recent job letter and payslip. There is also a required Know Your Client form used by registered agents to gather basic information for record keeping. Sometimes even a Certificate of Character is requested for the landlord’s comfort but isn’t required. Considering the time constraints to obtain these documents, having these documents on hand would lead to a higher chance of success of moving into a rental.
Lease Agreement
The Lease Agreement or Rental Agreement is simply a contract between landlord and tenant that stipulates the amount the tenant(s) will pay monthly towards rent, for how long and the conditions of the agreement. Leases generally last a year but can be customized again depending on your landlord. This is the document that can begin or terminate your tenancy depending on the situation. It is imperative that you review your lease before signing to ensure it is in line with what was verbally agreed upon beforehand and to avoid future disputes. Most leases are fairly simple to understand but in the event there are any doubts or concerns about the lease feel to contact a trustworthy and professional agent for any assistance.
Payment
Before any payments are made, after agreeing to the terms of the lease, both the landlord and the tenant signs and receives copies of the lease agreement. It is also highly recommended that an inspection is done beforehand to identify any hindering damages or leaks that the landlord agrees to fix. The required payment procedure differs from landlord to landlord, however, usually, landlords require first month’s rent and a security deposit equivalent to a month’s rent. It is also safe to have extra for temporary accessories such as electric gate controls and similar apparatus and to have a few months’ rent in hand when moving in. First payment is usually done in cash depending on the size of the transaction and landlord, from then on an alternate arrangement such as direct deposits can be done. Always ensure a receipt of payment is received and if the transaction is being handled by the authorized agent ensure that permission for collection of payment is issued if the transaction is not being done in the presence of the landlord.
Benefits of Renting Vs Buying
For most individuals renting usually comes before homeownership for a number of reasons. In Trinidad and Tobago, renting long term is often associated in a negative light. In reality there are a number of advantages in renting over purchasing a property and committing to a mortgage, unless a cash purchase is an option. For starters, unless explicitly stated in your lease agreement you would not be responsible for insurance premiums as well as property tax when it is implemented.
Secondly, investment opportunities through loans are more accessible as lenders often do not consider rent in calculating your debt service ratio. Debt Service Ratio refers to a measurement that financial lenders use when determining the proportion of gross income that is already spent on housing related and other similar payments. Property taxes, credit card balances and existing loans are used to calculate the ratio of income in debt and then compared to the lender’s benchmark for deciding whether or not to extend credit. Essentially this is the deciding factor between a person and a brand new car, starting a masters or starting a business.
Lastly, renting allows for flexibility in all aspects. For instance if there is an increase or decrease in one’s purchasing power, adjustments can be made to suit current circumstances in upgrading or downgrading a rental, with proper planning
All in all by utilizing these tips the process of securing the perfect rental should be simple. There are many great options to be seen, some you may not have considered. Have an open mind, be patient and follow these tips and you should be signing your lease agreement sooner than you think.
Feel free to contact Deed 2 Deed Real Estate for any real estate questions or any clarifications you may have at 771-3333 or 771-8899. We’ll help guide you to that perfect property!
References
Merrill, T., 2020. The Economics of Leasing. Journal of Legal Analysis, 12, pp.221-272.
Investopedia. 2021. Understanding The Total Debt Service (TDS) Ratio. [online] Available at: <https://www.investopedia.com/terms/t/totaldebtserviceratio.asp> [Accessed 10 January 2021].
Jensen, M., 2021. Is Your Rent Payment In Mortgage Debt-To-Income Ratio? | Freeandclear. [online] FREEandCLEAR. Available at: <https://www.freeandclear.com/community/does-lender-use-rent-or-mortgage-payment-to-determine-debt-to-income-ratio> [Accessed 11 January 2021].
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