Finding the right apartment and signing a lease is cause for celebration. Not only can you start to look forward to your new home, but you can be glad and feel relieved that your efforts paid off and your apartment search is over. However, it's also the time when you need to open your wallet and hand over some serious money, which may total an average of two to four times your monthly rent, if not more.
Here's a description of the items you might expect to pay at or around the time you sign the lease for your new rental.
Common Payment Items Around Lease Signing
- Advance rent. Expect to pay the first month's rent, and possibly the last month's as well, to your landlord at lease signing. This may seem like much money up front, but remember that your lease is starting, and so you need to begin paying your monthly rent anyway. Also, if you owe both the first and last months' rents at lease signing, you've already taken care of 1/6 of your annual rent (two months out of 12), and so you'll only need to pay for the remaining months on a one-year lease as they come due.
- Security deposit. States very in the amount that a landlord may collect from renters as a security deposit. The most you should expect to pay is an amount equal to one or two months' rent. If you haven't caused any damage to your apartment beyond normal wear-and-tear, your landlord should return the entire security deposit to you after your lease ends. Many states require landlords to hold tenants' security deposits in an interest-bearing account, which means you should expect your deposit back plus interest. (Don't forget that this interest is taxable in the year you receive it, as part of your income.) Check out this handy guide to security deposit law in the 50 states and the District of Columbia.
- Broker's fee. If you used a broker to get your apartment, the broker's fee is now due. Make sure you know from the start of your relationship how much a broker will charge, which is most commonly an amount equal to 10% of a year's rent or one month's rent, but may vary.
- Moving fees. Nearly every renter incurs some cost to move. Whether it's hiring professional movers, renting a truck, or even taking a bunch of friends out to a thank-you dinner for their minivan and efforts, you'll need to pay something to get all your stuff into your new place.
- Off-site storage fees. If you can't fit all your belongings into your new place and relatives aren't too keen on letting you store items in their garage or attic, using an off-site self-storage facility is a reasonable and popular option. These facilities usually charge by the month, depending on the size of the storage space you need.
- Other fees. Your landlord may charge fees or deposits for other items, which may be refundable to you when your lease expires. For instance, you might be allowed to keep a pet in your apartment provided that you pay a pet deposit, which could run in the neighborhood of $100, $200, or even $500 per pet. Such a deposit is aimed at helping the landlord pay for a situation where your pet causes damage.
- Note that if you need to keep a dog, cat, or another animal in your apartment as a reasonable accommodation for a disability, your landlord may not charge a pet deposit.