Leaving Home? What Renters Need To Know

In the first of a series of articles about renting, we tell first-time renters what bills they can expect.

When you're looking to leave the family home and start renting, the first thing you need to do is write out a budget.When budgeting, it's not just the rent you need to think about, but related household bills too. To help you estimate your future expenses, I'll go through the renting-related bills and costs that affect most first-timers:RentWell, obviously.If you're anything like me you'll set yourself a nice low figure for rent that ends up being wishful thinking, unless you want to live in a large, centrally-heated storage cupboard. So it's vital that you also know the actual rent you can pay.What I mean is, if you get shown around a flat you really like and then the agent tells you it's £10 per week (£520 per year) more than you'd budgeted, you need to know whether you truly can afford it. Just a few pounds a week can throw your budget off.Willpower, people! Be very firm with yourself. Have in your mind, before you start searching, the very most you could possibly pay within a sensible budget, and don't go a single pound over it. Otherwise, that attractive pine floor might make you do something impulsive and silly.*Council taxCouncil-tax rates vary wildly from council to council. My own bill halved when I moved to a different area last week, despite the two properties being roughly the same value, in my estimate.This local tax is divided into bands, usually A-H. Properties in band A have the lowest taxes and properties in H have the highest. The more expensive the property, the higher the band.I reckon that, for most first-time renters, your council tax will be between bands A and D. In London and other expensive areas you should probably expect C or D.Do your research to find out how much tax you might pay. You could do this by checking out the council's website for its rates. You can find it here, although it's usually quicker to type the council's name plus 'tax' into Google.Whilst you're there, check to see if any discounts apply to you. One discount that's available, for example, is 25% off the full council-tax bill if you live alone.Estimating your future council tax in this way should help you budget but, before you make an offer to an agent or landlord, ask them how much the council tax is, in order to confirm your estimates.Gas and electricityThis is another difficult thing to estimate, as prices vary by region and your bill is obviously affected by how much you use.An average household pays around £850 to £900 for both gas and electricity each year. However, most first-time renters will probably use a hell of a lot less; you'll probably be young, which means you won't be so prone to the cold and you won't have families, plus you might be out a lot of the time.I share with one other person and between us we pay roughly half the average. It helps an awful lot that we shop around for better deals once in a while.Compare gas and electricity prices through The Fool.WaterSadly, you can't shop around for your water supplier; you're stuck with whichever one does your area. The average unmetered water bill is £312 per year. For metered water (i.e. you pay for what you use) the average is lower, presumably as people on metered water try harder not to waste any.Telephone and InternetYou can investigate the cost of telephone and Internet connections yourself, with the help of Google. When doing this, use a post code from the area you're moving to, so that you can be pretty sure you've got the right prices.I reckon it'll cost you about £20-£30.Money-saving Fools might point out that you might be able to do without an Internet connection. If you're allowed to use a connection at work for personal use, there may be little point having one at home as well.TV billsA full package can cost £400 these days, I'm told, so luckily for me I don't have a TV!You need a TV licence, and you may feel you need all those extra channels and features that I've heard so much about. This is another expense that you can pin down to the last penny with some Internet research, so you should do so!Household contents insuranceIt's surprising how much the value of your possessions adds up, so most people should get this cover. You don't want to have to pay for a whole new wardrobe, and replacement DVDs, a TV, stereo, furniture and so on.Furthermore, the legal cover you can get with contents insurance can be invaluable for renters.You can't know how much your contents insurance will be until you get a quote based on the property you're moving into. However, you need a realistic estimate for your initial budget.The AA reported this month that the average contents premium is £147, although if you shop around it's just £82!Personally I'd estimate at the higher end; firstly because premiums vary so dramatically, and secondly because many first-time renters will be in shared buildings or shared accommodation, which pushes the premiums up.Once you know the post code of the property you're considering you can get a proper quote but, for your pre-search budget, make a pessimistic estimate.Compare household contents insurance quotes.Car insuranceYou'll have to tell your insurer of your new address and where your car will be parked. In all likelihood, this will change your premium, for better or worse. The insurer will probably also charge an administration fee for the change.To help you budget before you start looking for properties, ask your insurer to quote based on the sort of area you're moving to. Give it an example post code. However, if your property is on a more dangerous road or if your car will be parked in a less safe place, you might find your estimates are wrong.Compare car insurance quotes through The Fool.EmergenciesTo cater for any inaccuracies in your initial budget, and to prepare for future problems, you must include a figure for emergencies. I know this can be easier said than done for first-timers, but it's vital, because small things happen all the time, and big things can happen at any time!Other billsAbove are all the bills specific to your move from under your parents' wing to rented accommodation. But, for completeness, you should also take a look at the list of expenses here. This will help you to complete your budget. Don't forget to add amounts for entertainment and luxury purchases too.Things to save forYou'll need to save up before you move out, so that you can put down a deposit. Typically this is six-week's rent, so multiply your weekly rental figure by six and voila! That's how much you need.It's also likely that you'll have to pay administration costs, i.e. fees to the estate agent for printing off a template contract. This task usually costs about £100 per person (because pressing 'Ctrl+P Print' clearly requires a great deal of skill and training).If you want unfurnished accommodation, which is often cheaper, you'll need to save up for furniture. You will also, most likely, need to buy your own kitchenware, vacuum cleaner and so on, whether or not the place is furnished. On the other hand, most places (in my experience) come with white goods: a fridge and a washing machine.*I mean, you might rent a property you can't afford. What did you think I meant?...You pine-floor fetishists are not welcome here.