Hidden Costs Of Renting A House Or Apartment | What Are They?

  • By: Peter Parker
  • Time to read: 7 min.

Most tenants consider renting as a good financial decision as it is cheaper than buying a house or apartment.

Buying a property demands a huge downpayment and monthly mortgage expenses, which are a drain on the pocket. 

Renting a house is not as cheap as it seems, there are many hidden charges that many tenants fail to account for.

They just finalize the house based on the rent charged and end up losing lots of money on hidden charges. 

It is crucial for tenants to know the different hidden costs of renting a property to make an informed decision and save themselves from landlords, who lure tenants with low rental charges but impose huge security deposits and other charges. 

The hidden cost of renting a house or apartment:

1. Application fees

Landlords charge application fees from prospective tenants. This fee is non-refundable and is used for the purpose of conducting background checks such as credit checks, rental history verification, etc. 

The amount of the application fee depends on the state, city, and locality. Some states place a cap on the number of application fees while others do not regulate application fees. 

2. Security Deposit

The majority of landlords collect security deposits or rental bonds from their tenants. The amount of the security deposit depends on your credit score, rental history, and state and local laws.

The security deposit can range from a few hundred dollars to a couple of months’ rent, depending on the local law and the market rate.

You should consider security deposits also when finalizing a rental property because they will add up to the costs and increase the overall cost. 

3. Advance rent

Along with the security deposit, some landlords collect advance rent from the tenants. Advance rent will account for the last month’s rent before you move out. The amount of advance rent is mentioned in the lease document. 

 If the landlord collects advance rent, You will have to pay thrice or four times the amount of rent in the first month – rent + security deposit + advance rent. It is important to factor in the advance rent before you finalize a rental property. 

4. Additional fees and deposits for pets

If you are a pet parent, be prepared to pay extra for renting a pet-friendly house or apartment.

Landlords charge pet deposits to allow tenants to keep pets. The pet deposit can be a few hundred dollars and is usually non-refundable. 

Some landlords also charge additional pet rent. Pet rent varies from $15 to $100, depending on the local laws and the laws of the apartment complex. 

5. Renter’s insurance

A majority of landlords demand their tenants get renter’s insurance. Renter’s insurance helps to protect your valuables from damage in unexpected circumstances such as fire, theft, etc. 

The insurance coverage pays for the loss or damages to your personal property in a rented house or apartment. It also covers the liability if someone is injured on your property.

The premium for your renters’ insurance depends on the value of your belongings, the type of policy, the extent of coverage, the term of the insurance, etc. 

6. Utility start-up costs

When you move into a new home, you have to set up new accounts for utilities such as electricity, gas, water, internet, etc.

Utility companies charge start-up costs for new users. Some companies also charge deposits that are refunded at the end, when you cancel the account.

 Utility start-up costs and deposits vary from company to company. It is advisable to compare the prices of different providers and choose the one with the best rates. 

7. Moving-in costs

Some apartment complexes charge moving-in fees for the services such as setting up the service elevator, supervising the move-in, etc.

The moving-in fee can range from $100 to $500 depending on the number of stories, location, city, etc. 

Apart from the moving-in fee, there are several other costs such as the cost of hiring movers to shift your belongings, movers insurance, etc. 

8. Home decoration and furnishing

Some of your old furniture may not fit in the new house, you may want to replace some furnishings or decorate your new rental property with some pictures, knick-knacks, or new wallpaper. 

The cost of decoration and furnishing can range from a few hundred dollars to a couple of thousand dollars depending on your tastes and preferences. 

9. Additional fees

Some landlords charge extra fees for additional services such as doorstep trash pickup, package delivery fees, replacing lost key fobs, etc. All these additional fees add up and increase your monthly cash flow. 

Some landlords also charge parking fees for designated parking spots, late fees for late payment of rent, fees for subletting if you are subletting the house, guest fees to accommodate guests, etc. 

10. Charges for using amenities

Most modern buildings and apartment complexes provide amenities such as a gym, swimming pools, game rooms, rooftop decks, lounges, etc.

The charges for using these amenities are charged extra to the rent.

 It is recommended to check with the landlord whether the amenity usage charges are factored into the rent or not before signing the lease.

If they are not built into the rent, you may have to pay a few hundred dollars extra every month to use the common amenities. 

11. Laundry cost

This is the most overlooked cost that tenets forget to include when estimating the monthly rental expenditure.

Apart from the cost of cleaning detergents and laundry products, you will incur an additional charge to use the washing machines. 

If the building has a communal laundry, you must pay extra to use the washing machines. If your unit has a washing machine, you will have to pay additional utility charges for water and electricity. 

12. Cleaning costs

It is essential to keep your home and surroundings clean to protect the property as well as the health of your family.

Regular cleaning helps to minimize wear and tear and protect your security deposit.

Regular cleaning of the carpets, kitchen, bathrooms, etc. ensures that they are in good condition throughout and reduces your cleaning expenditure when you move out. 

Though the cleaning costs seem like a negligible expense, the cost of cleaning products, the costs of hiring professional help, and other costs can quickly add up and increase your monthly expenditure considerably. 

13. Maintenance costs

Though most of the maintenance costs are the responsibility of the landlord, tenants also have the responsibility to maintain the house.

Regular maintenance tasks such as cleaning the air filters, changing the batteries of the smoke detectors, upkeep the safety equipment, replacing light bulbs, unclogging toilets, etc. are your responsibilities.

All these maintenance activities add up to your monthly rental outflow. 

Tips to reduce the hidden costs of renting a house or apartment

The additional fees, deposits, and maintenance costs can increase the monthly rental outflow manifold and drain your pockets. Here are some tips to reduce hidden costs and save money. 

1. Go through the lease carefully

Don’t sign the lease as soon as your rental application is approved.

Study the lease carefully to know about the various charges such as security deposit, last month’s rent, pet fee, pet deposit, maintenance charges, moving-in charges, etc.

This will help you to know what the additional charges collected by the landlord are apart from the monthly rent. 

2. Negotiate with the landlord

Landlords are willing to negotiate with tenants regarding some fees and charges.

You can negotiate additional charges such as pet rent, amenity usage charges, package delivery charges, etc.

If the landlord feels that you are a trustworthy tenant and will stay for a long term, he will agree to reduce some charges. 

3. Shop around

Shop around before finalizing the utility companies, insurance companies, and other service providers.

Compare the charges of different service providers for utilities and choose the one that suits your requirement and budget.

You can also negotiate with service providers if you have a good credit score and rental history. 

4. Consider private rentals

A private rental is a house or apartment owned by an individual or a family.

Private landlords are friendlier and easy to negotiate with. Most of them do not charge hefty deposits and additional charges. 

5. Be responsible

Act responsibly and use utilities judiciously to save resources as well as reduce your expenses.

Cleaning the house regularly will reduce hefty cleaning expenses at the end of the term and ensure that you get a full refund of the security deposit.

Being alert will prevent accidents and help to keep your insurance premiums low. 

Most of the tenants only consider the rent when choosing a rental property. However, there are many hidden charges that increase the monthly rental outflow and affect your bank balance.

It is essential to know these costs beforehand and negotiate with the landlord for a concession. 

Add all the hidden costs before comparing the rental value of different properties and finalizing the house for renting.

You must read the lease carefully to be informed about the additional fees and deposit, and penalties for breaking the lease or not following the rules and regulations.

Shop around and choose the right service providers for utilities. Lastly, use the property carefully and clean it regularly to avoid damage and wear and tear. 

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