Renting an apartment is not a simple matter. Even before you move in, you would already be shelling out money for the apartment. You would have to pay the security deposit, of course. In addition, you will also have to think about other fees that may be in the contract. These are often called hidden costs.
For instance, some establishments require a key fee or card-key fee when renting an apartment. It is usually paid in cash and not included in the contract. Another hidden cost is the parking fee. Some condominium buildings have extra spaces for visitors while others do not. If there is no visitor’s area, you would have to pay a monthly fixed parking fee if you are a vehicle owner.
Other apartment buildings charge an electricity fee. It is not limited to the power consumed by your home appliances or the air-conditioner; it also includes streetlights and office lighting inside the condominium complex as well as elevators used during non-operating hours.
The ideal scenario would be for more individuals to apply for a multi-family FHA loan and buy a house instead of renting an apartment. However, while the loans are being processed and the houses are being built, it’s advisable to rent a small apartment that doesn’t cost too much.
Besides the monthly rent, the following are other items that you have to consider before signing a lease agreement.
- Application Fee. When you apply to rent an apartment, the building administrator charges a certain amount to process your application. It covers the cost of verifying all necessary documents and putting in place the lease agreement. It is usually a non-refundable expense.
- Key or Card-key Fee. You have to pay this fee when you’re already renting the unit but not yet settled in it. However, some buildings require this fee even before you sign the contract. This fee is usually paid in cash. You could claim it back if you had already turned over all your keys to the apartment administrator when you move out.
- Parking Fee. Some condominium buildings have extra spaces for visitors while others do not. If there is no visitor’s area, you would have to pay a monthly fixed parking fee if you are a vehicle owner.
- Electricity Fee. It is not limited to the power consumed by your home appliances or the air-conditioner; it also includes streetlights and office lighting inside the apartment building.
- Maintenance Fee. If you use the amenities, like swimming pools and children’s playgrounds, this fee would likely apply to you in your apartment complex. This monthly maintenance charge covers all operations and expenses of the complex, such as staff salaries, utilities, garbage disposal, water supply, and security services.
- Administrative Fee. It is a fee charged by the apartment building administrator. It covers expenses such as administrative work and notary public fees.
- Damage Deposit. This deposit can be claimed back when you vacate your apartment unit, provided that it was not damaged during your stay in it. However, if there are damages like broken appliances or furniture, this deposit would not be enough to cover the repair cost. You may also have to pay an additional fee on top of the deposit money for them to fix the damaged items.
- Tenancy Deposit. It is also called an advance payment for rent or rental security deposit, which you will pay when signing the contract. Some establishments require this amount to be paid in cash, while others accept check payments. The agreement should state clearly how much you have already paid as a tenancy deposit and what it will be used for, like a security deposit. The tenancy deposit covers the cost of any damages incurred during your stay in the apartment unit when it is returned to you upon vacating the unit.
- Credit Check Fee. When you apply for an apartment, landlords may require a copy of your credit report and may charge you additional fees if necessary for checking it out. It’s usually a non-refundable expense.
- Relocation Fee. This fee is charged if you are relocating from another apartment unit. It also includes the cost of storage boxes and other items that you might need to rent if necessary.
- Monthly Accident Insurance Fee. When you sign a tenancy contract to rent an apartment unit with your partner, then the monthly accident insurance fee is included in the monthly rent. It covers hospitalization expenses and funeral costs for you and your spouse in case of death or disability.
- Pet Deposit. If you have pets, then this amount is required to be paid by the landlord if the lease agreement states that it’s a pet-friendly apartment. This deposit is refundable, provided that you took care of the unit when it’s vacated and your pets caused no damages during the time of tenancy.
At the end of the day, you may not want to deal with all this. There are many hidden costs in renting an apartment that could add up over time. This is why it might be worth looking into getting a housing loan, so you don’t have to rent for the rest of your life. Getting a mortgage can help alleviate some stress and give you peace of mind knowing that you’re going into debt responsibly by investing in something that will appreciate in value over time.