Renting a new home can be exciting, whether it’s your first rental home or one of many. But amidst the whirlwind of applications and packing, it’s easy to overlook all the extra costs that come along with that new set of keys. From utilities and security deposits to having the proper insurance, expenses can quickly add up.
The good news is that a bit of advance planning can go a long way toward avoiding any unwanted surprises. In fact, with a detailed rental budget, you can focus on enjoying your new place without worrying about finances. Let’s take a closer look at what you need to know about the cost of renting, utilities for renters, and more.
Understanding Security Deposits Before You Move In
When you rent a new home, you’ll almost always need to pay a security deposit. This can be a significant upfront expense, sometimes more than your first month’s rent. But why is that, exactly? In general, a security deposit is a sum of money a renter pays upfront. This deposit is not the same thing as rent; it is held in a separate account by your landlord. The purpose of a security deposit is to protect the landlord from financial loss in the event of property damage or other expenses.
For single-family homes, the amount of a security deposit is often equal to one or two months’ rent. For apartments, it may be the same or less. It’s essential to note that a security deposit typically cannot be used to cover your last month’s rent.
Additionally, many leases will include a clause stating that if you break your lease agreement, you will forfeit your deposit. That can be tough if unexpected life changes arise.
The good news is that in many cases, you can get your security deposit back if you take good care of your rental and fulfill the terms of your lease.
To ensure you maximize your refund, be sure to do a thorough walk-through when you move in. Take photos of the entire property, including any existing damage, and then do your best to keep the place clean and in good shape while you live there. When you move out, deep clean the home and fix any minor issues. These steps can ensure that you get all or most of your security deposit back.
What Renting Really Costs: Beyond the Monthly Rent
While the amount of your monthly rent might be the most significant number in your budget, it is not the only one. To calculate the real cost of renting, you’ll need to include all other expenses related to your new rental home. For example, many rental homes may require you to pay trash collection fees, buy parking permits, pay for lawn care, or cover some maintenance costs. The kinds of fees and expenses you’ll be responsible for will vary, and may depend on whether you’ve rented an apartment, a single-family home, or another type of property.
Before you sign your lease, be sure to ask your landlord about any fees you’ll be responsible for. Obtain a comprehensive list, preferably in writing, so you can create a realistic rental budget. In this way, you will know exactly how much it will cost to stay in your rental home each month. And when you know exactly what to expect, you’re less likely to be caught off guard when that first bill arrives.
Managing Utilities Without Breaking Your Budget
Aside from your rent payment, one of the biggest monthly expenses renters face is utilities. While utility costs and expectations may vary – some apartments may include utilities in the rent, for example – in general, utilities for renters often include expenses for electricity, water, gas, internet, and sometimes trash or sewer services. Depending on where you live and the energy efficiency of your home, these costs can vary significantly. For this reason, be sure to ask your landlord which utilities are included in the rent and which ones you’ll need to cover yourself. These answers will help you plan your budget more accurately.
If you are responsible for all utilities yourself, there’s a lot you can do to save money. For example, look for ways to reduce energy use. Install LED light bulbs, unplug electronics you’re not using, and adjust the thermostat when you’re away. Even small strategies like these can add up to significant savings over time!
Protect Your Belongings with Renter’s Insurance
Another key part of budgeting for your rental home is including the cost of renters’ insurance. Most renters’ insurance typically covers your personal belongings, liability in case someone gets hurt at your place, and sometimes even living expenses if your rental becomes uninhabitable. Some landlords require renters’ insurance, while others do not. But it’s always a good idea to have a renter’s policy to help protect you from serious mishaps.
The cost of renters’ insurance is typically affordable, ranging from $10 to $25 per month. If you have a car, you may be able to add renter’s insurance to your auto insurance policy for a reasonable amount. Either way, shop around for the best rates and then ensure that you include the monthly premium in your rental budget.
Smart Money Moves for a Stress-Free Rental Life
Understanding the actual cost of renting a home means you can spend more time enjoying your new place. In fact, a smart rental budget can help you feel prepared and confident to handle whatever comes your way.
Real Property Management Majestic can help you find a home in the Decatur area that fits your budget and lifestyle. Let us help make your rental experience as smooth as possible.
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