Everyone knows you need a stash of money saved up before you buy a home. But renting doesn’t necessarily put you on Easy Street. You typically don’t need the same amount of reserves on hand when you rent, but you still need to lay out some cash, whether you rent a studio apartment in Chicago or a brownstone in Boston.
The best way to fight hidden apartment fees is to know what they are (so you don’t have to take out a loan to pay for them) and to learn some strategies that might reduce the costs.
Here’s a breakdown of the costs to consider before signing your next lease — and ways to manage them.
1. Moving costs
If you’ve asked your college buddies to help you move one too many times, or if you’re making a significant move, you’ll need to hire a moving company.
But there could be additional costs you haven’t considered. “Talk to your new landlord about truck accessibility to your unit,” says Ryan Carrigan, founder of moveBuddha, a moving-costs-comparison site. “If movers can’t pull the truck up within 75 feet of your front door, they will typically charge a ‘long carry’ fee,” he says.
To fight other potential fees related to damage, be proactive and make sure your mover has general liability insurance, which covers damage to the home or building. “If the mover scrapes a wall or nicks a door frame and doesn’t have this coverage, your landlord may take it out of your security deposit,” says Carrigan.
2. Storage rentals
What do you do with all your stuff when you need to move out before your new place is ready? Rent a storage unit, right? Maybe, but that’s not your only option.
Storage units typically aren’t too expensive, but they do require you to move your belongings twice. “A better alternative is using a portable storage container, such as PODS or Zippy Shell,” says Carrigan.
If there’s only one day between your move-out and move-in dates? “Leave all your stuff in a rental truck and pay the overnight fee,” he says.
3. Application fees
Landlords charge an application fee so they can run a background and credit check on you. They’re charged to do this, and they pass that cost on to you.
Many landlords charge only what it costs them; others charge a minimal amount extra for their time. Some states even regulate how much extra landlords can charge for application fees. But if your landlord’s fee seems extreme, you could be in an unregulated state, where landlords can charge as much as $200 per applicant, according to Christina Friscia, a New York City real estate broker.
These fees could be negotiable, but if your landlord’s application practices seem shady, that could be a big clue that you’re dealing with an unscrupulous landlord.
4. Security deposits
About half the states have laws that spell out exactly how much a landlord can charge for a security deposit — usually one or two months’ rent. In states that don’t specify, your local jurisdiction might. Keep your potential landlord honest by knowing just how much he can charge.
Contrary to popular belief, you cannot skip out on paying rent the last month and call this “living out the security deposit.” That money covers any damages you might make to the property beyond normal wear and tear, not your rent. Keep the place as nice as it was when you moved in, and you should get this money back when you move out.
5. Last month’s rent
Many landlords (probably ones who’ve been burned by tenants living out the security deposit) require renters to pay last month’s rent before they move in. If that’s the case with the place you want, expect to pay at least three times your monthly rent before you’ve spent even one night there: first month, last month, and security deposit.
6. Elevator reservation fees
If you’re moving into a building and won’t be on the ground level, you’ll need to reserve the building’s service elevator — if it has one.
It’s possible that you won’t have to pay a fee, but if you do, it could be significant. “These fees vary wildly, from $500 to $1,000 refundable deposits to as high as $1,000 nonrefundable move-in fees,” says Alin Zdroba, a Florida real estate broker. In some cases, if you think the fee is too high, this could be a good point of negotiation with your landlord.
7. Parking fees
Unless you’re moving into the Sky Garage penthouse in New York City, an approximately $20 million apartment with a special elevator that transports your car to its own room, you’ll probably need to pay parking fees.
“Parking gate openers and parking permits/stickers can [cost tenants] between $20 and $100 or more each,” says Zdroba.
8. Broker fees
If you want the big-city lights to inspire you, as they do Alicia Keys, you’ll probably need to pay a broker to help you find a place in New York. “In New York City, the standard broker fee is 15% [of a year’s rent],” says Christina Friscia. You can go it alone, but having a broker will make the process much easier — especially if you’re trying to find an apartment in time to start a new job.
9. Renters’ insurance
Landlords usually require tenants to have renters’ insurance. That way, they won’t have to worry about you coming after them if your stuff is damaged in a fire or other disaster at the rental property.
Sure, you can skip this one, but you’re probably better off having renters’ insurance, whether the landlord requires it or not. “It’s better to be safe than sorry, and it’s relatively inexpensive,” says Friscia. Expect to pay less than $200 a year.
10. Pet fees
It’s wonderful when you find a place that allows pets. But you might have to pay for the privilege (unless your pet is a service animal). Here are the various ways this could impact your bottom line:
- An extra pet deposit in addition to the security deposit (legal in some states)
- A nonrefundable pet fee (legal in some states)
- Pet rent, which means your rent will be higher with a pet than without one
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