Budgeting for your first rental can be somewhat tricky, particularly if you’re new to money management. You might be a recent graduate or just landed your first job. Whatever the case, you might feel you’re ready to be independent.
Moving into your first rental is a big life milestone and while it can be thrilling, it has its share of responsibilities. As such, recognizing how to budget for your first rental is significant. After all, you’ll be responsible for rent and other expenses. Here’s a list of out-of-pocket expenses you can expect.
While the expense is one-time, it’s worth budgeting for. If you intend to move across the country, you’ll probably have to invest in professional moving services. You might also want to engage the services of a moving company if you’re moving locally. Moreover, you might need new furniture, so ensure you consider this as a one-time cost.
Numerous places require a month’s rent as a security deposit. In the event that you use a broker, you might need to pay an extra month’s rent on top of your initial rent payment. This means that if your monthly rent costs $1,000, you might end up paying $3,000.
Other places might not require a security deposit. Instead, they might require you to pay a non-refundable deposit at a smaller amount provided you don’t damage the unit. In the event that damages surpass that amount, you’ll pay for them when your lease ends.
In case you take the non-refundable route, ensure you save some money every month in case you have extra charges at the end of the lease.
Gas and Heat
Most rentals will expect you to cover heat and gas usage monthly unless your unit has radiators. In most areas, heat cost differs throughout the year. Generally, you won’t incur considerable costs during the summer. Nevertheless, it depends on your apartment’s size. During the cold season, you can expect to pay at least $100 monthly on heating costs.
You must undergo an application process to secure a rental. The process usually comprises a background check, so landlords and property managers charge potential renters an application fee to cover the criminal, credit, and eviction reports. In turn, they use these reports to assess whether you’re fit as a renter.
Keep in mind that application fees can cover the administrative expenses related to the time it takes to validate employment, income, references, and rental history.
Maintenance Costs and New Furniture
In the event that you score a great deal on a two-bedroom rental when you’d initially planned for a one-bedroom, you can expect your moving cost to increase.
If you plan to hire an interior designer or decorator, know that you’ll pay a considerable amount in fees along with the price of furnishings. Moreover, you’ll have to keep up with the maintenance and cleaning of the additional rooms. If you lack the time to maintain the larger apartment, you could consider a maid service, which costs $159 on average.
Getting your first rental is an indication of financial independence because you probably had financial help while in college. Nevertheless, you must be ready to make adjustments particularly when it comes to finances. If you’re wondering what to budget for, consider this list of out-of-pocket expenses.
For more information on out-of-pocket expenses, contact us at Apartment Agents or leave a message.