You'll probably have to pay some money in the form of fees or deposits during your apartment search. Here's a description of the payment items you might expect to encounter even before you sign a lease for a rental.
Common Payment Items Before Lease Signing
- Application fee: Many landlords charge an application fee to apartment hunters who decide they're serious about securing a rental in their building. The fee is meant to cover the cost of checking your background, including your credit score, criminal record, and rental history.
Before paying this fee, ask if it's refundable if you don't get approved. Also, if you do get approved and sign a lease, find out whether the landlord will agree to apply the fee toward your security deposit.
A landlord's application fee should reflect the actual costs of running a background check and not function as a profitable side business. If an application fee is outrageous, it may be illegal and it's a sign you should avoid dealing with the landlord who's charging it. A reasonable application fee is generally in the range of $30-$60.
- Application deposit: Not to be confused with an application fee, an application deposit (also known as a "holding deposit") is money you might pay a landlord to take an apartment off the market temporarily to have held for you while your application is pending.
Even where application deposits are legal, you should be wary of simply handing over hundreds of dollars, if not more, to a landlord just to keep your place in line. At the least, make sure you and the landlord agree in writing on how much of your application deposit will be returned if you don't qualify for the apartment or if you choose to go elsewhere. Taking this extra step will help you avoid unpleasant surprises.
- Finder's fee: Some landlords charge this questionable fee, also known as a "move-in fee," which essentially rewards landlords for leasing an apartment to you. The only person you should possibly pay any money to in connection with finding an apartment for you is a broker. So, even if a finder's fee is legal, it's something you should try to avoid. After all, you're not charging the landlord a fee for helping him find a good tenant for his vacancy, are you?
- Apartment-hunting expenses: Depending on your needs and your situation, you may incur costs in connection with your apartment search. For instance, you may need to pay to travel to a different city to check out neighborhoods and view available apartments, if you're relocating. Or, if you want to live with a roommate but don't have any leads, you might sign up for an online roommate-matching service.