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So you're planning on renting an apartment or house. Whether it is your first rental or not, there is a lot to consider.
First on your list should be a financial assessment. How much can you afford? Financial advisors generally recommend that rent be no more than one-third of your monthly take-home pay. Remember that after you sign the lease, you will have to come up with a total of 2 to 4 months' rent up front, which may include:
- Application deposit - Not refundable if you don't end up renting it. If you do, this deposit may be refunded, or go towards rent for your first month.
- Credit report fee and background check- you will have to provide your Social Security number. You may choose instead to get a copy of your credit report and bring it with you.
- The first month's rent (and sometimes the last month's rent!)
- The security deposit, which is usually equivalent to one month's rent, but can be more or less. A security deposit provides protection for the landlord in case of damage to the home or unpaid rent. Provided that you fulfill the terms of your lease, do not owe any rent, and have not caused any damage to the apartment (normal wear and tear excluded), you are entitled to a full refund of your security deposit within 30 days after you move out. If the landlord will be withholding money from the security deposit to pay for damages, he or she must provide you with a statement indicating what has to be fixed and the corresponding cost(s).
- Pet deposit - find out if it is refundable.
- Parking fee - management may require first and last month's fees up front.
And don't forget:
- Utilities - deposits and "hook-up" fees
- Housewares: towels, dishes, groceries, furnishings, etc.
- Renter's insurance - It is strongly recommended that you purchase renter's insurance. It is relatively inexpensive (generally between $10-$20/month), and well worth it. Your landlord's insurance does not cover your belongings, only the building itself. In case of fire, theft, and natural disasters, you will be out of luck if you don't have renter's insurance.
The basics of renters insurance
As you can see, these costs and fees add up fast, so if you are strapped for cash, you may want to consider moving in with a roommate.
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