So, you're ready to find a new place to rent, and the challenge is both stressful and exciting. You can minimize some of the stress with good planning, and an important part of that planning is getting a full grasp of the expenses involved, aside from just the monthly rent and utilities.
While there's no down payment required, as there is with a home purchase, there are some expenses and fees that you will need to take into account and budget for prior to putting your name on the lease agreement. If you're preparing to move into your first apartment, some of the fees may come as a surprise. If you're a seasoned renter, you probably know what to expect, but it's always good to take a refresher course on what you may need to pay.
Yes, everyone wants their pound of flesh, and part of that is the application fee (or the cost of processing the paperwork for the lease and the performance of a background check by the landlord or property owner). Keep in mind that while it's not typically an exorbitant cost, every penny counts. The average application fee is about $30, but it can be lower or higher, so don't be surprised by this. Think about what car dealerships charge for documentation fees (which is, essentially, processing paperwork), and you'll realize that a rental application fee is just part of the cost of doing business.
This might be the biggest nut you have to cover in addition to your monthly rent. It's a one-time payment that covers the cost of potential damage to your apartment while you're leasing. Typically, you'll be asked to pay the equivalent of the first month's rent as a security deposit (or possibly two months), and if nothing glaring emerges from your move-out inspection, you should get it all back. Not all security deposits are as much as the first month's rent since some states cap it at a certain amount (you should check before you pay it). Just remember that you need to budget for it, and it could be a few thousand dollars depending on your monthly rental amount.
You read that right. Advance rent is a thing. Landlords may sometimes request rent paid for the first month in advance, along with the security deposit. So, what you'll need to do in this case is to pay the first month's rent before the first month when you actually move in. This may prevent you from reneging on your commitment and asking for your security deposit back. You cannot get the advance rent money back, which commits you to honor your lease agreement.
Another fee you may need to budget for prior to your move is a move-in fee. While that might seem like a ploy to get more of your money, this may be charged when the rental market in which you move is very competitive. This move-in fee is for the purpose of prepping your place for inhabitation: new paint, minor touch-ups, etc. Look at this fee as a going towards minor improvements. It might even cover new carpeting, etc. It also covers potential damage to the common areas when you move in. The money you pay in the move-in fee covers some of the contingencies on move day, and that could be a very good thing.
Not every apartment complex allows you to have a pet, so consider yourself fortunate if yours does. But that amenity doesn't come without responsibility. Pets can be messy and cause damage, so in addition to a security deposit, a landlord may ask for an up-front fee to cover potential damage by your pet. Amounts can vary, but states may also put a cap on how much they can charge tenants (so, do your homework before you pay). It's usually not a small amount, sometimes in the hundreds of dollars, and sometimes the amount is added to your monthly rent rather than charged as an up-front fee
There are also fees that you'll need to keep on your running list of expenses so you don't get blindsided. Here's a list, but by no means is it comprehensive.
- Utility Fees: cable TV installation, internet installation, telephone land line installation.
- Moving expenses: truck rental, mover fees, moving box costs, POD rental costs
- Mailbox keys
- Renters insurance costs
- Parking fees