When you find a rental you like with an asking price that’s within your budget, it’s a great feeling. But many renters’ happiness quickly sours as their bank accounts are buffeted with additional fees and expenses—many of which are unexpected. Although the White House refers to them as “junk fees,” many of these hidden costs do serve a legitimate purpose. The problem is, renters often aren’t aware of them before committing to a new place, and find their budgets stretched to the breaking point by expenses that can add up to 20 percent of the cost of rent. To avoid finding yourself in this stressful position, familiarize yourself with common fees you may have to pay. Then, talk to your potential landlord and read your entire lease to find out what you’ll be on the hook for. Don’t sign the lease unless you clearly understand your financial responsibilities as a renter and feel confident that you will be able to cover them. Here are some of the most common up-front and ongoing fees you may be responsible for. Note that all price ranges are estimates. The fees you’ll be asked to pay, and how much they’ll cost, will vary based on your location, rental property type, and individual landlord.
Up-Front Fees
Application Cost: $35-$60 Timing: When you decide you’re serious about a place
Application fees often help landlords cover the cost of preparing and processing lease agreements—but this fee isn’t just about recovering costs. Forcing you to put a little money down helps them identify who’s really serious about the place. Sometimes, application fees also cover the cost of background and credit screenings—but not always—so be sure to check!
Credit Check Cost: $20-$50 Timing: At the time of application
Landlords usually run credit checks to assess renters’ financial responsibility and overall ability to pay. Note that “hard pulls” on your credit can affect your credit score, so only authorize these checks when you’re sure you want to move forward with a rental application.
Background Check Cost: $20-$50 Timing: At the time of application
Many landlords want to ensure that their renters don’t have a history of evictions, criminal convictions, and other red flags. A background check can take several days to complete, so plan accordingly and don’t wait until the last minute to apply for a rental. If you do have an eviction or criminal record, be up front with your potential landlord and explain any extenuating circumstances.
Holding Deposit Cost: As low as $100 - As high as one week’s rent Timing: Usually after you’ve been approved, but before you’ve signed the lease
The landlord may charge this fee to take the property off the market before you sign the lease. It typically holds the rental for a couple of days until you can get the lease signed and come up with the other funds required. This fee is usually non-refundable if you back out of the place. If you move in, it’s typically used to reduce other move-in costs, such as payment of first month’s rent or a security deposit.
First and/or Last Month’s Rent Cost: One month’s rent Timing: When you sign the lease
This is pre-payment of rent. It’s typical to have to pay the first month’s rent, and some landlords will also ask you to pay the last month’s rent up front.
Security Deposit Cost: Usually (but not always) one month’s rent Timing: When you sign the lease OR by the time you get the keys
This is a payment that is held by your landlord as security in case you damage your rental beyond what is considered normal wear and tear. Security deposits can also be used to cover unpaid rent, cleaning costs, and other fees. It’s unusual, but not unheard of, to have to pay first and last month’s rent and a security deposit. Usually, it’s just the first month’s rent and either the last month’s rent or a security deposit.
Move In/Move Out Fees Cost: $150-$400 Timing: When you move in or out
These fees are intended to cover the use of facilities (booking an elevator or loading dock, reserving parking spots, etc.). They are generally non-refundable, but in some cases, you’ll be refunded a security deposit when you hand back elevator keys or other items. Moving fees could be added to the up-front payment with your first month’s rent or added to a later invoice.
Pet Deposit Cost: $300-$800, OR a percentage of a month’s rent (often 30 percent – 80 percent) Timing: Before you move your pet into the rental
This is something like an extra security deposit for the place. Despite your best efforts as a pet owner, your landlord may incur extra costs related to damages or cleaning—and this fee allows them to recoup some of that money.
Broker Fees Cost: 8-12 percent of a year’s rent Timing: Prior to moving in
In some markets—most notably, New York City—many renters work with brokers to help them find an apartment. Most brokers charge a big, non-refundable fee for this service. If you’d like to avoid this cost, look for “no fee rentals.”
Ongoing Expenses
Utilities Some landlords include energy, gas, water, sewer, and trash fees in the rental rates, while others bill utilities separately from the rent—or require renters to pay these expenses directly. Internet and cable are usually the renter’s responsibility. Be sure to clarify up front how each of these expenses is charged.
Depending on your rental and where you live, utilities can be a minor expense or a big one. For example, average water bills in 2022 in West Virginia were $105 per month, but in North Carolina they averaged $20. Your landlord should be able to give you a ballpark figure of what you can expect to pay before you sign a lease.
Parking Many suburban apartment complexes allot you one free parking space, but require you to pay for any additional spaces. In urban locations, landlords often charge for every parking spot. (And since they usually include a garage and/or driveway, most single-family home rentals have no parking charge.)
Prices vary wildly for parking: as low as $75 and as high as $600 per month. Make sure you know what you need and ask about the cost up front.
Pet Rent While some places have pet deposits (a larger, up-front fee, mentioned above), others charge pet rent. This is a monthly charge for all pet owners, usually assessed on a per-pet basis. Cats are usually $25-$50 per month, and dogs are often $30-$80 per month.
Renter’s Insurance Some landlords require you to have renter’s insurance, which protects your personal property from theft, fire, burst pipes, damage a visitor might cause, etc. (The landlord’s insurance policy protects the building itself against the same things.)
Renter’s insurance can be as little as $5 per month or as much as $20 per month, depending on what you sign up for. Your landlord may recommend or try to sell you a specific policy, but you are free to do your own research and shop for one that works for you. For instance, you might consider a policy with liability coverage, which will protect the property against damage you might cause to it. It can also provide coverage if someone else injures themselves in your rental.
Rent Processing Fees Depending on the situation, the form of payment can bring real expenses for the landlord. This is particularly the case for credit cards, where the “merchant fees” charged by the credit card companies are 2 percent or more of the charge. With other fees, the landlord may be trying to incentivize their desired form of payment by making the other forms more expensive. There should always be a way to pay the rent that has no extra cost associated with it, so make sure you know what it is and that you can live with it.
Rent processing fees could be 2 to 5 percent of the monthly rent if you’re paying by credit card, and are often less than 1 percent of the monthly rent for other “convenience” forms of rent processing, such as paying by ACH. In some cases, the landlord insists on electronic payment and charges a fee (around $25) for payment by check or money order.
Storage Fees Some rental properties have storage units available for rent, ranging from $50 to several hundred dollars a month. Be careful: sometimes landlords will allow renters to use a storage unit for free for the first few months, and then begin charging—which can take people by surprise. More typically, though, you’ll be given the option to rent a storage space (or not) from the beginning of your lease, and your payments won’t come as a surprise.
On top of these common up-front and ongoing expenses, your lease will probably include a list of fines and fees you may be charged if you fail to live up to the terms of the agreement. For instance, your landlord may charge a late fee (usually ranging from $25 - $100) if your rent payment is late. You may also be charged a smoking fee (as low as $250 or as high as a month’s rent) if you smoke in a non-smoking building. This fee could be charged at the end of the lease, or multiple times in the course of the lease if you continually break the rules. It is intended to create a powerful incentive to eliminate smoking in rental properties. The smell of smoke can be very difficult to eliminate—and can lead to significant vacancy for the landlord. While these are two relatively common fees, each landlord will have their own set of rules and regulations—and fines for breaking them. Be sure to read this part of your lease carefully so that you aren’t surprised by an unexpected charge. You have enough fees and expenses on your plate already!
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About Jonas Bordo: Jonas Bordo is the coauthor, along with Hannah Hildebolt, of the book Everything You Need to Know About Renting But Didn’t Know to Ask: All the Insider Dirt to Help You Get the Best Deal and Avoid Disaster. He is the CEO and cofounder of Dwellsy, the free residential rental marketplace that makes it easy to find hard-to-find rentals. Prior to cofounding Dwellsy, Jonas was a senior executive at several leading real estate firms including Essex Property Trust and BentallGreenOak, and was with the Boston Consulting Group after graduating with his MBA from the University of Chicago Booth School of Business.
About the Book: Everything You Need to Know About Renting But Didn’t Know to Ask: All the Insider Dirt to Help You Get the Best Deal and Avoid Disaster (Matt Holt, August 2023, ISBN: 978-1-6377439-2-8, $21.95) is available from major online booksellers.
About Dwellsy: Dwellsy is the renter’s marketplace: a comprehensive residential home rentals marketplace based on the radical concept that true, organic search in a free ecosystem creates more value than the pay-to-play model embraced by all of the current rental listing services. Dwellsy has more than 14 million residential rental listings—more than any legacy classifieds site—as well as the most diverse set of listings, including single family rentals, condos, and apartments. Dwellsy’s entirely different approach to residential rental listings focuses on presenting houses and apartments based on features renters need and want, not based on how much landlords pay to show their listings. Dwellsy investors include Frontier Ventures, Ulu Ventures, Blackhorn Ventures, Heroic Ventures, and the University of Chicago. For more information, please visit our newsroom or find your next home at Dwellsy.com.
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