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How Apartment Pricing Works: Understanding the Fees

Posted by South Dakota Housing Authority on Nov 2, 2017 3:16:06 PM


Lease agreements and apartment listings can be a lot to take in. From the rules and regulations to deposits and fees, understanding what you're truly paying for can sometimes be hard to determine. But with the right information, you can understand how apartment pricing works before signing documents.

Here are some of the fees you may encounter when apartment-hunting and renting.

Application Fee

While it's not always something that you'll be charged, there may be listings that require a fee be paid in order to submit and process your rental application. These are typically used to pay for your background and credit checks. Rental property owners may even run periodic "specials" where the application fee is waived as an incentive to occupy more units in a slow market. A good rule of thumb is to weigh your interest level in a given property before taking the plunge on paying to apply—is it desirable enough to be worth the fee?

Pro tip: If you want to potentially save yourself the trouble of all or part of an application fee, consider bringing along a copy of your credit report to supply to the property manager. He or she might be willing to be lenient with the charge.

Security Deposit

Once your application has been accepted and you've been invited to lease an apartment unit, your new landlord will likely require a security deposit. The amount can vary, depending on the management, and often is an arbitrary amount or equivalent to the cost of a month's rent. This deposit is the manager's backup in case repairs or deep cleaning need to be performed upon your move-out at the end of your lease. Taking good care of your rental property will likely mean you'll be able to recover some or all of your security deposit when you leave.

Parking Fee

Depending on your community and neighborhood of choice, parking may come at a premium. If you select an apartment situated in a crowded or busy area, your property manager may have limited space for vehicle storage. A parking fee is sometimes charged in these cases—you can opt to pay for a reserved spot or garage space or skip it and select street parking. Weigh your options to determine which route is the most cost-effective for your budget.

Utility Fee

While some apartment managers will throw in utilities as "included" in your monthly rent cost, some may require you to pay a separate utility fee. Depending on the situation, these may be paid independently and directly to a provider, such as an electric company or gas company, or they may be managed by your landlord. Other utilities that your apartment manager may charge for include garbage pickup and wireless internet access. Take care to determine which of these utilities are your responsibility and which are optional or required.

Pet Deposit

If you're a pet-owner or plan to be one in the near-term, make sure you look over your potential apartment manager's policies on animals. Some properties will strictly prohibit pets of any kind, while others may allow certain smaller animals, such as fish or hamsters. Others yet may allow dogs and cats—and some may ask for a pet deposit. This deposit works similarly to a security deposit—if extensive cleaning or repairs are required because of your pet, this money covers the landlord for those costs. Make sure to be open with your landlord about your pet situation—don't try to conceal it. As long as you are a responsible pet owner and take good care of your space, you can expect part or all of your deposit returned on move-out, in many cases.

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Topics: Renting

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