Conventional wisdom holds that renting a house is always cheaper than owning one. And it’s true that only one of those two housing options requires you to take out a pricy 30-year loan.
However, renting has some little-known costs that can dramatically inflate your monthly housing bill.
Whether you’re weighing the pros and cons of renting versus owning or looking for ways to cut down on rental costs and lower your financial stress, keep reading.
Check out the 15 most common hidden and upfront costs that tend to accompany renting.
Landlords and rental companies often charge an upfront fee when you apply for their rental property.
Typically, this fee covers the cost of a background check, though some landlords also charge for the time it takes to review applications and submit background checks.
Depending on your state, there may be a law regulating how much landlords are allowed to charge in application fees. For instance, in New York, landlords can’t charge more than $20 in application fees.
First and last month’s rent
If they accept your application, most rental companies and landlords require you to pay your first and last month’s rent before moving in. This isn’t necessarily an add-on fee — after all, you’d end up paying your last month’s rent anyway the month you move out.
However, since it requires you to have twice your monthly housing budget on hand, it’s important to plan for the extra expense the month you sign your lease.
In most states, landlords can charge a security deposit on top of the first and last month’s rent. Typically, your security deposit can’t be higher than your last month’s rent, and landlords in most states can’t use your deposit to pay for typical property maintenance.
Since security deposit amounts and regulations vary by state, you’ll want to read the details of your lease agreement or contract thoroughly.
Make sure you understand how much you’re paying, what the money will be used for, and how much of it you can expect to receive back.
Some rental properties flat-out ban pets. Many that allow pets require you to pay an upfront pet deposit, an additional monthly fee, or both. As with most rental fees, the amount a landlord can charge you as a pet deposit differs from state to state.
Note that if you are charged a pet deposit, your landlord is likely prohibited from spending your security deposit on any damage caused by your cat or dog.
Renters insurance doesn’t usually cost as much as homeowners insurance, and it can be extremely useful in a crisis. Still, you should expect to pay around $12 or $15 a month in renters insurance for coverage of around $35,000.
Not all landlords require tenants to care for the property’s yard or garden. In fact, for the most part, landlords tend to be responsible for their property’s outdoor upkeep.
However, the specifics of any landscaping costs should be covered in your contract. Read the lease agreement carefully so you’re prepared ahead of time for any yard-related costs.
Before signing a lease, double-check the parking situation. Do you need to pay extra for a parking pass? Is there free street parking, or do you need to apply for a permit?
You might also want to talk to your neighbors about other parking fees, including typical tow, boot, and ticket fees.
While mortgage payments are technically due on the first of the month, homeowners usually get a grace period of 15 days before they’re charged a late fee.
In contrast, landlords usually set their own late-fee policies, meaning they decide when your rent is considered late and how much you’ll owe for late rent payments.
Pest control fees
For the most part, landlords must pay for endemic pest problems out of their pockets.
However, if you, your guests, or your pets cause damage or contribute to conditions that make a pest infestation likely, your landlord is likely within their rights to charge you an extra fee for pest mitigation.
Don’t have a washer and dryer within your rental unit? You’ll likely be visiting a laundromat, where the average load of laundry can cost between $2 and $4. That total might not include the cost of buying your own laundry detergent, fabric softener, or dryer sheets.
Pools, fitness rooms, and high-speed internet can be great draws for new apartment complexes, but read the fine print of your contract to find out if you have to pay an extra fee to access top-tier goods and services.
Pay particular attention to whether you’ll be charged an extra monthly fee for luxury amenities even if you don’t use them.
If your rental unit isn’t big enough for your possessions — for instance, if your new apartment is furnished and you need a place to store the furniture from your old unit — you’ll likely need to pay for a storage unit.
Per Consumer Affairs, the average storage unit costs $190 a month, but the actual cost depends on your storage unit’s size, whether or not the unit is climate controlled, and how much you’ll pay in insurance premiums.
Charges for damages and repairs
Once your lease is up and you move out, your landlord will likely walk through the unit and determine which portion of your security deposit will go toward damage and repairs. Landlords can also use tenant deposits to cover unpaid rent or utility bills.
You should receive the remaining money from your deposit within a reasonable time frame. If you don’t or feel your landlord deducted money from your deposit unfairly, your state might have free tenant resources to help you pursue legal action and recover your deposit.
Move-out cleaning fees
Landlords are generally allowed to charge a separate cleaning fee rather than using your security deposit to pay for routine cleaning after you move out.
However, if you were charged a cleaning fee when you moved in, your state might prohibit your landlord from charging a move-out cleaning fee.
No matter where you live or who you rent from, expect to pay standard fees like a security deposit, last month’s rent, and costs for any damage you directly caused while living in your rental.
But some landlords and rental companies sneak in more hidden fees than others, so before signing a rental agreement (or even paying an application fee), read the fine print so you don’t throw money away.
You deserve to pay only what you agreed to, not a penny more.
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