What You Can Expect to Pay in Additional Fees When Renting an Apartment
When you're on your apartment hunt, you look at everything from the number of closets to water pressure strength. But your primary focus is most often rent. Are you getting the best value and does it fit in your financial plan?
However, as you budget for that initial month in your new place, you should be aware your first rent check isn't the start of your new apartment expenses. For that, you'll need to backtrack a few weeks.
Both at the time of the application and the time you sign your lease, you'll be responsible for a number of apartment application fees and deposits. Here's a rundown of everything you might be asked to pay well before your first rent comes due.
The most common fee you'll come across is probably the very first check you'll ever write to your landlord. When you find your perfect apartment, you'll be asked to pay an application fee in order to start the process of securing your new home.
The term application fee can mean almost anything, depending on what your potential landlord wants to charge for. However, it usually covers your landlord's cost of running a financial history on you, such as your credit statement and any prior evictions that have been reported. Additionally, application fees can also cover the landlord's administrative costs and time to gather all the reporting on you, verify your employment and rental history and track down your references.
Application fees are usually non-refundable, even if you are rejected. But to protect you, some states have limits on the amount a landlord can charge for the application. It varies state to state, so be sure to research yours.
Background check fee
Before you're given the OK to move in, your future landlord will run a criminal background check. Sometimes, this is included in your application fee but often it's not, because – as opposed to your credit and employment – it must be run for every person moving in, not just the leaseholder.
Since a criminal background check must be submitted for every tenant in the unit, this cost can get expensive and your prospective landlord will most likely wish to transfer that expense on to you, whether you pass or not.
The security deposit is money you loan to your landlord to ensure you haven't caused any major damage or left the apartment in need of excessive cleaning and painting at the time you move out. This fee is usually requested before you move in, and normally runs the equivalent of one or two months' rent.
If you haven't caused undue destruction, you'll get this money back when you move out. Like application fees, many states have laws concerning security deposits you should research before you sign anything.
In many big cities, security deposits are being phased out in favor of Deposit-Free Renting, which is essentially an agreement for you and your landlord to co-carry “apartment damage insurance" managed by a third-party company.
First and last months' rent
Additionally, your landlord might require an added deposit equal to two months' rent, known as “first and last month." This covers your landlord in case you skip town without paying rent you're contractually bound to pay by your lease.
If you move out before your lease is up and you still owe your landlord rent, he or she can keep this fee. If you leave by the proper terms of your lease, fully paid, this fee should be returned to you. Remember, a deposit is money you get back, a fee is money you don't.
And if you didn't think that was enough, a relatively new expense is move-in fees. But wait, you're thinking, isn't everything else we just covered a “move-in fee"? Well, this expenditure is essentially a turn-over fee from the last tenant to you, including the costs of changing the locks, putting a new name on the mailbox or buzzer or updating building and complex directories. This fee is non-refundable and is not intended to be used to fix damage or clean the apartment, as that should come out of the previous tenant's security deposit.
If you're renting a house, condo, duplex or some sort of freestanding property, the neighborhood or complex may require all residents to pay a homeowners association (or HOA) fee.
HOA fees are used to fund preservation or maintenance of communal areas and cover items like care of common spaces, lawnmowing and landscaping, roof or exterior building upkeep, insurance, sewer use, termite or insect care, snow removal, sidewalk repair and trash pickup.
As a tenant, you may be asked to provide a one-time fee for HOA dues at move-in, even though you don't own the property. If you'll be required to pay fees every month, be sure to address with your landlord whether is it will be included in your rent.
Whether you have parking access in a lot, driveway, garage or assigned street parking, you may be asked to pay a one-time parking setup fee at move-in. This usually covers nothing more than reserving the spot for your use, but it could also be used to repaint, repave or rearrange spaces, new codes for an opener or a permit sticker. Like the HOA fee, if you're expected to pay a parking fee monthly or yearly, be sure that's addressed in your lease.
And if you're planning on bringing a furry friend into your apartment, or getting a new companion, be expected to pay an additional deposit or fee for your four-legged roommate.
A charge at move-in may be a non-returnable fee or a deposit you'll get back if Fido and Fluffy behave themselves. Be upfront with your landlord as to your pet situation so you're not surprised by any additional expense.