Entering into a new apartment can be an exciting, yet somewhat nerve-wracking experience. Even if you’ve been budgeting carefully and feel ready to sign a lease, there may be unexpected payments that come up as a renter.
To avoid being caught off guard, it’s important to educate yourself on the common fees that you may be required to pay after signing a lease. This includes fees such as security deposits, pet fees, and utility costs.
By being aware of these costs upfront, you can better plan and prepare for your move into a new apartment.
Prepare for the Possibility of Paying Last Month’s Rent Up-Front
When you move into a new apartment, you should be prepared to pay your first month’s rent as well as a security deposit, which may be equivalent to one month’s rent. This means you will need to have a larger sum of money upfront, as you will be paying double your monthly rent right away.
While this may seem like a lot of money at once, it’s important to understand that landlords need to protect themselves from tenants who may not pay their last month’s rent or cause damages to the apartment.
By requiring the last month’s rent upfront, landlords can mitigate this risk. On the plus side, this means that one sixth of your rent for the year has already been paid.
When it comes time to move out, you will have already paid for your last month’s rent, so you can use that money for payments at your new apartment.
Expect to Pay a Security Deposit Equal to One Month’s Rent
Every landlord has their own policy when it comes to security deposits. It’s common for a security deposit to be equal to one month’s rent, but it’s not unusual for it to be two month’s rent.
This means that after signing your lease, you may be required to pay three or four times the amount of one month’s rent upfront. For example, if your monthly rent is $600, you should have at least $1800 saved to pay for your first and last month’s rent and security deposit.
If your security deposit is equal to two month’s rent, then you would be expected to pay $2400 in this case.
It’s important to note that as long as you don’t cause any damage to the apartment, you should expect to see your security deposit returned to you when you move out.
In some states, landlords may be required to hold security deposits in an account that accrues interest, which means you may receive more than what you originally paid when your deposit is returned.
However, if you cause damages to the apartment, you may not see your deposit returned, and the landlord may keep it as profit.
To set yourself up for success, it’s a good idea to save up for a security deposit that is equal to two month’s rent. If that’s not feasible, aim to have at least one month’s rent saved for your security deposit.
Don’t Forget About The Broker
If you choose to use a broker to help you find an apartment, you will be required to pay a fee after you sign a lease. The standard broker’s fee is 10% of one year’s rent, or one month’s rent, but this is negotiable.
Using the example of a monthly rent of $600, you can expect to pay anywhere from $600 to $720 to the broker. Keep in mind that you will also need to pay your first and last month’s rent, as well as a security deposit, to your landlord.
Using the same example, this means you would be paying $1200 for first and last month’s rent, $600 or $1200 for the security deposit, and $600 to $720 to the broker. In total, you can expect to pay anywhere from $2400 to $3120 when you move in.
It’s important to budget for these upfront costs and to be aware of any additional fees that may come up during the process of finding and moving into a new apartment.
You Will Inevitably Spend Money Moving
It’s impossible to move free. If you hire professionals to do the moving for you, expect to pay a significant amount for their services (as well as a tip). If you decide to move yourself, you will have to pay for gas, wear and tear on your vehicle, and take time off work.
Either way, you will need to budget for the costs associated with moving your belongings to your new apartment. This may include fees for professional movers, truck rentals, or compensation for friends and family who help with the move.
Will You Need Off-Site Storage?
If you have a lot of possessions and limited space in your apartment, you may need to consider using a storage facility to house some of your nonessential items.
Before you do this, try to sell as many items as you can part with, as this will help you make money and potentially eliminate the need for off-site storage.
If you can’t part with your belongings, you’ll need to add the cost of off-site storage to your budget.
Keep in mind that space is a valuable commodity in an apartment, so it’s important to be mindful of how much you’re bringing with you and to consider whether you really need all of your possessions in your new home.
Other Expenses to Add to Your Budget
In addition to the payments mentioned above, you may be required to cover additional fees if you have a pet. It’s common for landlords to charge a “pet deposit” in addition to the security deposit, and you may also be required to pay higher monthly rent if you have a pet.
It’s important to speak with your landlord and be aware of all potential payments before you sign your lease and move in, so you can budget accordingly. Be sure to ask about any additional fees you may be required to pay as a result of having a pet in your apartment.