Hopefully, before you decided to rent an apartment, you started saving your money. Because you're going to need a bunch of start-up dough to get yourself a place.
While many people have heard of a security deposit, there's another fee that often gets confused with it: a move-in fee. And it's a whole different animal. For starters, a move-in fee is not refundable (unlike a security deposit that's returned when you move out). But wait, there's more. Here's what you need to know before you decide you've found your home sweet home.
After a tenant leaves, the landlord or property owner usually repaints and makes any repairs or changes so when you come along, the place is at its best. A move-in fee is something that helps the landlord cover the cost of that turnover. The landlord uses the security deposit to pay for damages caused by a tenant.
Landlords are legally allowed to collect both a move-in fee and a security deposit. In fact, if you're about to rent in a state where security deposits are heavily regulated, a landlord will most likely charge a move-in fee in order to make enough money to cover maintenance and repairs. But, if the landlord requires a really hefty move-in fee, that might leave them without a tenant for long periods of time. So, landlords try to keep it reasonable in how much they charge for a move-in fee.
As mentioned, the landlord uses your security deposit to pay for any damages you may have incurred while living in your apartment. These are not things like a scratch on a wall you can easily cover with paint. That's considered normal wear and tear. Damage is something you (or your drunken friend, perhaps) caused to break that's part of the property and may change its value.
The move-in fee is going to pay for the simple sprucing up done before a new tenant moves in. Here are some other differences between the move-in fee and the security deposit.
A security deposit will usually cost you more than a move-in fee. Typically, the security deposit is equal to one month's rent. The move-in fee usually ranges from 20 percent to 50 percent of one month's rent. Sometimes you can negotiate this fee.
A security deposit is regulated by certain laws. For example, there are laws that state when a landlord must return your security deposit (usually within 30 days after you move out). A move-in fee is not regulated.
As mentioned earlier, a move-in fee is not refundable. But a security deposit is — along with any interest incurred, if applicable, as long as you've abided by the rules of the lease.
Aside from the security deposit, whenever you move into an apartment, you're going to have a host of fees and upfront payments to contend with. These include:
A landlord is going to do a credit check, verify employment and look at your rental history. That takes time and research. The application fee pays for that. It's usually pretty affordable, maybe $20 to $50 and is usually not refundable. But in some states, it is refundable, so do your due diligence.
A landlord does this for every leaseholder, as well as every person moving into an apartment, and the landlord passes along the costs to you. A criminal background check is sometimes included in the application fee, but not always. If you do have a record, it's still possible to rent an apartment. Do your research first, though.
This is pretty self-explanatory, but it can get pricey, of course, so remember to budget for this. This is to ensure that you don't run off and skip the rent. If you move out before your lease is up, the landlord will keep this money. Staying until the lease is up means the money goes to pay your last month's rent. If you renew your lease, it just carries over to the new term and goes toward your last month's rent when you finally move out.
If your new rental allows you to keep a pet, you'll likely have to pay upfront in case your animal pal does some damage. The pet deposit fee covers things like carpet stains, flea infestations, chewed cabinets — things that can change the value of the property. Note: If you have a service animal, it's not considered a pet and they can't charge you for it.
Don't confuse these with utility deposits. It's likely that the property you're moving into already has the connections to utilities already paid for — things like sewer and gas lines. So, while it's unlikely that you'll pay hook-up fees, you may have to pay utility deposits, which go to start up a service (electric, water, internet, etc.) at your address. These are usually less than $100.
As you set forth on your apartment search, keep a list of the expenses you're going to incur as a renter. But think outside the box, as well. Consider parking fees, commuting costs, new furniture, how often you might want to eat out each week, etc.
Then, create a budget based on your income to help you determine what you'll be able to afford and how much you can save to make your move as easy as possible. In today's climate, be prepared to take advantage of available and affordable rentals.