Money Basics

Renting a house or apartment

When you rent a house or apartment, you pay a certain amount—called rent—each month to live there. Rent is usually paid in monthly installments based on a signed rental or lease agreement. This contract between you and your landlord specifies the rent amount, as well as how long you will be renting. The landlord is the person or company that owns the house or apartment.

When trying to find a house or apartment to rent, the amount of rent is an important consideration. However, there are other costs to think about. Try to estimate how much you will pay for each of the following:

• Insurance. Consider insuring your property from the possibility of theft, fire, or personal injury liability. A landlord's insurance policy seldom provides coverage for these circumstances.
• Security deposit. A security deposit and last month's rent may sometimes be required. A security deposit is money a tenant gives the landlord to protect the landlord against unpaid rent or damages to the rental unit. This deposit is not the same as the last month's prepaid rent, which is required by some landlords. Generally, the security deposit is turned over to the landlord at the time the rental agreement is finalized and returned or accounted for after you move out.

 
There is no guarantee you will get your deposit back. However, if you properly take care of the rental property and notify the landlord of any problems, you boost your chances of having your deposit returned to you.

• Pet deposit or fee. Many landlords don't allow pets, but there are some who do. Most of them require a pet deposit, which is usually separate from the security deposit and returned or accounted for after you move. Alternatively, some landlords charge a pet fee, which is a one-time, non-refundable charge. They also may simply charge pet owners more rent.

 
Strive to distinguish between what you really need vs. what you want.

• Maintenance fees. If you are renting an apartment or buying a house or condo, you may have to pay a set amount for maintenance of common areas each month. This is usually true for homeowners who are part of a neighborhood association.
• Travel expenses. How far will you have to travel to get to school, work, and other regular destinations?
• Miscellaneous moving expenses. Consider how much it will cost you to move into your new home or apartment. Will you have to pay a company to have your belongings moved across the country? Will your new job pay for all or some of your moving expenses? If it's a short move, can you rent a truck and get friends and relatives to help for free or at low cost?