Expenses to Expect When Renting

If you're new to the rental world, you may think your only expense will be the monthly rent bill. However, there are usually other costs involved. If you're not prepared for them, they could come as a big surprise. Some common expenses are credit report, damage deposit, first and last month's rent, connection fees, lease costs and renters' insurance.

Credit Report
Some landlords want to know if your credit is acceptable before renting you a place to live. You might be asked to pay for a credit report, but the costs are usually quite reasonable.

Damage Deposit
When you rent an apartment or house, the landlord will require a damage deposit. This money is kept aside for the entire time you rent the property, and it will be returned to you when you move out if there is no damage reported.

When you move in, it’s a good idea to walk through your rental unit with your landlord so you both can note any existing damage. Then, before you move out, schedule another walk-through with your landlord so that both of you can assess the condition of the property and ensure that there’s no new damage that you might be responsible for. That way, there should be no surprises about damage discovered once you’ve left.

First and Last Month's Rent
To protect themselves from renters who leave before a lease has expired, landlords frequently require up-front money equaling the first and last month's rent.

Connection Fees
For many services in your new home—such as telephone, electricity, gas, and water—the utility company generally requires a hook-up fee, which must be paid before you can use the service.

Lease Costs
If you sign a lease, you are responsible for paying all the rent for the duration of the lease—say, one year. Even if you want to move out before the lease expires, you’ll have to pay the remaining rent due. If you’re not sure you’ll be living in this location for the entire term of the lease, try to negotiate for a month-to-month lease instead. That way, you’ll only be responsible for paying one month’s rent at a time. Also, be sure to read the lease carefully before you sign it, and ask the landlord about anything you don’t understand.

Renters' Insurance
It’s a good idea to buy renter’s insurance. Do You Really Need Renters' Insurance? has tips on what to look for.

Use the Walk-Through Worksheet when you first move in and when you’re ready to move out.

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