After finding a seemingly perfect apartment listing online and scheduling a tour, it’s official: you’re in love. You can’t imagine living anywhere else. From the gleaming hardwood floors to the updated kitchen appliances, you could seriously see yourself thriving in this space. Sure, it’s at the upper end of your rental budget, but you’ll make it work. Right?
While it’s easy to get swept up in the charm or location of an apartment, the sticker price is just the beginning. Can you really afford that apartment? If the monthly rent alone is already pushing your budget to its limits, it will be a stretch to accommodate other living costs. Here are five rental budgeting tips to help you decide.
- Calculate Utilities Before Signing a Lease
Utilities are the sneaky “add-ons” to a rental agreement. It can be tough to pin down exact numbers ahead of time, but expect to spend at least $200 dollars per month on utilities. Here are the average monthly costs for common utilities from Move.org:
- Electricity ($183)
- Water ($40)
- Natural gas ($82)
- Garbage/recycling/sewer ($12-$20)
- Internet ($47)
Since utility costs vary so much between listings—one building may include free water, heat or garbage while another may not—it pays to ask the landlord or building manager about typical costs before signing your name on the dotted line.
- Get Renters Insurance (Whether It’s Required or Not)
Some buildings require tenants to provide proof of renters insurance (often with the building association or management company listed as an insured third-party on the policy). Others leave it up to tenants’ discretion. While it may seem like an optional cost, the benefits far outweigh the relatively inexpensive monthly premium.
In the event your personal belongings sustain damage from fire, theft, vandalism, wind or water, your policy will pay for replacement. Insurance also protects you from certain costly liability claims. The good news is that this coverage can be inexpensive compared to other living costs, especially if you do your due diligence in comparing renters insurance quotes.
- Add Up Moving Fees and Deposits
It’s customary to owe at least your first month’s rent up front, but you may also need to pony up a hefty security deposit (usually refundable at the end of your lease) or move-in fee (usually non-refundable). Since landlords use security deposits to pay for cleaning and repairs needed at the end of your lease term, you can help yourself earn back a higher return by documenting your apartment at move in, as well as deep cleaning it before you leave and getting repairs squared away before you give back the keys.
- Make a List of Household Items You’ll Need
Are you going to move into a beautiful new space and leave it empty? While you can certainly bring the essentials from place to place, you’ll likely need to garnish your new space with additional furniture, kitchen supplies, cleaning supplies and décor. Buying some of these items secondhand (or on sale) can help mitigate costs, but there will still be a period of acquiring that can add up quickly if you don’t plan for it.
- Factor in Fluffy or Fido
Do you have a pet? You may need to pay a pet deposit, or even pet rent for your four-legged friend. Fees can be a small portion of your rent (like $10 dollars per month) or it may be an up-front fee (like $300 due at lease signing) to get permission to house your pet in the building. The consequences of harboring a pet illegally are much worse than just planning for this extra cost ahead of time.
As you can see, the baseline rental price for an apartment is just the beginning. Incorporate these five rental budgeting tips into your initial calculations and you’ll be able to affirmatively answer the question, “Can you afford that apartment?”
