As you budget for expenses associated with renting an apartment, be sure to include costs that you have to pay before you sign the lease. These can add up, and you don’t want to begin renting an apartment in the red. Some fees may not apply based on where you’re renting and whether you have a relationship with the landlord. In this case, your costs may be zero dollars.
Costs to Find an Apartment
Before you sign the lease on an apartment you have to find it first, and sometimes that costs money. Apartment brokers can save you time and money by doing your apartment hunting for you. It’s also a good way to find an apartment in another state or country, since you won’t be close by to visit apartments and speak with landlords. Brokers have to make a living too, which means you have to pay for their service. Brokers often charge a percent of the annual rent, around fifteen percent, or the equivalent of one month’s rent. Other apartment search fees may include a roommate matching service, and costs to place wanted ads in the local newspaper.
Rental Application Processing Fee
Most landlords are wary of renting to tenants without a thorough background check. As you look for apartments, landlords may ask you to fill out a rental application, asking you about your rental and criminal history. A lot of applications can be very detailed, and you should be careful where you submit such applications. However, you’re not going to get an invitation to sign the lease unless the landlord gets a rental application first. Research the landlord to make sure you’re not going to be a likely victim of identity theft.
In exchange for taking the time to verify your information, landlords charge an application fee for processing the application. Most of the time they pocket the fee and do the checking themselves, but sometimes they pay independent contractors or office workers (for larger buildings) to take care of it. Application fees vary and can cost $10 to as much as $75. Avoid application fees that cost much more than $75, unless you want to sign the lease of a luxury apartment.
One cost that you should not pay before you sign the lease is the security deposit. The lease agreement should be signed by you and the landlord first before you pay it. If the agreement falls apart before you have the opportunity to actually sign the lease, you’ll have the extra headache of trying to get your deposit back. While in some cases, the landlord will be willing and happy to return your security deposit promptly, other landlords may not be so reasonable. The cost of commencing a lawsuit and the time to go through a legal process may not be worth it just to get back the deposit. That’s why the security deposit should be included in your calculations prior to signing the lease. However, include it in your costs due at signing.