Apartment expenses can be complicated. That’s why this post breaks down everything you need to know about apartment expenses!
Signing your first lease on an apartment is an exciting time! You finally have a place to call your own! However, it’s important to have a clear understanding of what you’ll be expected to pay every month. Unfortunately, your apartment expenses for the month will be more than just your rent. From utilities to internet to water, there are a lot of new expenses you will be taking on.
Before you sign your lease, you need to make sure you know how much all your expenses will cost. That’s why this post breaks down all the expenses that you need to be aware of before you sign your lease. By the end of this post, you will know all the right questions to ask about apartment expenses as you do your apartment search and will be able to sign your lease with confidence!
This post is all about everything you need to know about apartment expenses before you sign your lease!
Best Tips on Apartment Expenses:
1. Rent Apartment Expenses
Of course, the most obvious apartment expense is rent. Rent prices are usually the first thing you look at when you are getting ready to sign a lease with an apartment. It is also going to be your greatest monthly expense, so it’s important that you confirm you are comfortable with paying that amount every single month.
As a general rule, you will want to keep the cost of rent under 30% of your monthly income. While a lot of sources recommend aiming for 30% of your pre-tax income, I actually recommend aiming for 30% of your take home pay. There are a lot of expenses that are taken out of your paycheck. From taxes to medical premiums to 401k contributions, you likely won’t be taking home anywhere close to your gross income.
For example, if my gross income per month was $7,000, the 30% rule says that I can afford paying about $2,100 per month for rent. However, if my take home income is about $4,000 after taxes, medical expenses, and investments, then I could only afford to pay about $1,200 per month. See the difference?
In this scenario, I could easily get approved for $2,100 per month (or even more in most cases), but that would mean that I’m spending more on rent and saving less money for emergencies and the future. At the end of the day, it is completely up to you on how you want to spend your money, and this is just how I’ve approached rent.
Another consideration is if you are planning on living with anyone. This is a good strategy if you live in an city with expensive rent. Just make sure you agree on the amount everyone is expected to pay before you sign the lease!
2. Pet Fees
If you’re like me and you have a fur baby, you will likely be expected to pay a pet deposit and a monthly pet fee. Most apartment complexes have pet fees, so be sure to ask about what the apartment’s policies are on pets. In most cases, there will also be size and breed restrictions as well, so make sure that your pet fits into the regulations.
While pet deposits can vary greatly from apartment community to apartment community, I have most commonly seen it range from $200 to $500. Since the deposit will be due up front, make sure that you account for that expense when you move in. It’s also important to note that most communities do not refund pet deposits, so once you pay the deposit you likely won’t get that money back.
For the monthly pet fees, you can expect to pay anywhere from $20 to $100 in addition to your rent for your pet. Some apartments charge the fee per pet, so if you have more than one fur baby, be prepared to pay a little extra each month in pet rent.
3. Internet Apartment Expenses
Internet is an absolute must have in today’s world. Everything is done online now. From paying bills to streaming entertainment to looking up dinner recipes, you need reliable internet in your apartment. As a result, you’ll need to include internet service in your monthly apartment expenses budget.
Some apartments may include internet in your rent, so be sure you ask about that when you are touring apartments. However, in most cases, you will have to pay for internet separately. When you are touring apartments, ask your apartment which internet provider the complex is wired for. Some apartments may be flexible with which internet provider you use while others may only be wired for certain types of modems.
Once you’ve identified the internet providers that are compatible with your apartment, you can shop around for internet packages. Internet speed is the main determining factor in your monthly internet costs. If you are going to be working from home and/or will be streaming Netflix a lot, you will need faster internet service.
Depending on where you live, high-speed internet service can range from $50-$150. Keep an eye out for deals! Many internet companies will give you a reduced monthly rate for your first year.
Everyone needs electricity! As a result, you will need to pay a monthly expense for utilities. Utilities may be billed through your apartment complex, or you may need to set up your own account through a utility company. Be sure to ask apartment complexes how they handle utilities when you are touring them!
Utility costs will vary depending on where you live. For example, my first apartment was in Phoenix, AZ, so my energy bill would go up in the summer months and would be lower in the winter. Now that I live in Denver, CO, my utilities are more expensive in the winter than the summer. To be prepared for these fluctuations throughout the year, I always recommend anticipating the highest cost each month, so I always have enough in my budget to pay my energy bill.
There are other factors that can influence the cost of your utilities. Newer apartments with energy efficient appliances will usually have lower energy costs than older apartments with older appliances. To get an estimate on how much you can anticipate to pay for utilities each month, you can ask the leasing specialist from the apartment how much the average resident pays in utilities.
While utilities expenses vary greatly, I typically spend about $50 on utilities per month. I recommend budgeting somewhere between $50 to $100 for utilities every month.
5. Water Apartment Expenses
Water is one of the most overlooked apartment expenses. While water is a relatively inexpensive, it’s still important to include in your monthly budget. Most apartment complexes will directly bill you for water, so you don’t have to worry about setting up water with a separate company.
There are two main types of water expenses: general tap water and sewage. Your water expenses will likely vary depending on how many people you have living with you. The more people that live with you, the more shower/baths and toilet flushes there will be.
Similar to utility expenses, water expenses can be influenced by your appliances. If you have an efficient dishwasher and washer/dryer, you will pay less than if your appliances are not efficient with water. Also, if you don’t have a washer/dryer and/or dishwasher in your apartment, your water expenses will be lower than if you have these appliances.
I recommend budgeting between $25 to $75 for water expenses. You can also ask the apartment complex the average amount residents in the complex pay for water each month to get a better gauge on what you can expect to pay.
6. Renter’s Insurance
Most apartment complexes will require you to get a renter’s insurance policy. When you are touring apartments, be sure to ask about what the renter’s insurance requirements are. Sometimes, apartment complexes will even have a renter’s insurance company that they are affiliated with which can make it easy to obtain your policy.
You can also shop around for a policy. Oftentimes, you can bundle your renter’s insurance with your car insurance. Bundling can sometimes help you save money, so it’s definitely worth looking into. Most apartments will require you to have a policy to cover any damage to the actual apartment. You can opt to get more coverage to protect your belongings in case there is flood or other unexpected event.
The level of coverage you select will greatly influence the cost of the policy. Also, many companies offer an annual payment option and a monthly payment option. The annual payment option will usually be discounted since you are paying up front. The monthly payment option will take some of the up-front financial burden off of you, but you will likely end up paying more.
My renter’s insurance policy costs about $114 per year. I would budget up to $150 per year for your insurance policy.
7. Community Fees Apartment Expenses
Some apartments may charge you a community fee on top of your rent. I’ve found that apartments can take a lot of different approaches to community expenses. Some communities build this cost into rent. Other will charge a flat fee. Others will calculate the total monthly community expenses and evenly distribute the expense to residents.
To ensure you know what you’ll be paying each month, this is an important question to ask the leasing specialist before you sign a lease. Generally, apartments with more amenities tend to have higher community expenses. If you sign a lease at an apartment with a pool, gym, dog park, and teleworking center, you will have much higher community expenses than an apartment that does not have any amenties.
Community fees will vary greatly from apartment to apartment. I’ve seen community expenses be anywhere from $25 all the way up to $150.
8. Parking Fees
Some apartment complexes have started charging a separate fee for parking. This means if you don’t own a vehicle, you could save some money. If you do have a vehicle, you may have to pay an additional fee. Some apartments may still include parking in the cost of rent, so be sure to ask about the apartment’s policy.
Additionally, if you own more than one vehicle, you will likely need to pay for an extra parking space. This can greatly add to your monthly expense, so be sure to have the conversation with your apartment early on.
If you do need to pay an extra fee for parking, be prepared to pay between $50-$75 per parking spot.
9. Apartment Furniture
One of the main up front costs of your apartment will be furnishing it. The amount you need to spend on furniture can vary. If you already have a couch, bed, and other key pieces of furniture, your cost will be significantly lower than if you are starting from scratch.
The cost of furniture will also depend on whether you buy new or used furniture. New furniture will of course cost more money. You can find some good deals on used furniture from Facebook Marketplace and local used furniture stores. If you’re on a budget, I highly recommend checking out used furniture options. You can find some great pieces at an affordable price!
With all of that being said, most sources recommend budgeting about $3,000 to $5,000 to furnish your apartment.
10. Moving Expenses
Finally, another up front cost you will need to budget for is moving expenses. Moving expenses will vary depending on how far you are moving and how much stuff you have to move. If you are moving across state lines, your moving expenses will likely be higher than moving down the street. Similarly, if you only have a few pieces of furniture, your moving expenses will be cheaper than if you have enough furniture to furnish a five-bedroom home.
Your moving expense will also be influenced by how much you want to do yourself versus how much you want to pay other people to do. If you hire movers, that will be more expensive than renting a U-Haul. If you do most of the work yourself, your moving costs may only be a couple hundred dollars. For those of you that want to hire movers, expect to pay about $800 for short distances and $2,200 for long distances.