Renting After Graduation

Moving on up: renting in the real world

You’ve got a degree, a job, and a plan for the next few years of your life. Now you just need a place to crash.

For most new grads, that means renting something. What kind of rental you end up with will greatly depend on where you’re going to live, how much student debt you have to repay, and how much money you bank each month.

But one thing is certain. Getting set up in your first post-college home will be expensive.

We’re not trying to scare you. We just want you to be prepared for the financial hit you’re about to take. After all, the more you know about what to expect, the better you can budget for it.

The first chunk of money is due before you can move in

So you’ve found the place you want to rent. Great! Now take a deep breath, because there are quite a few expenses you’ll have to take care of before you can schedule the moving truck.

Application fee

Apartment leasing companies often charge a nonrefundable fee of up to $50 just to submit an application.

This fee gives them the go ahead to run a background check on you and check into your resident eligibility. But you usually can’t get it back, even if you decide not to move there.

Renter’s insurance

Many places require that you have a renter’s insurance policy the day you move in.

Renter’s insurance tends to run about $15–30 each month. You can also pay for the whole year upfront, which usually has a lower average monthly cost.

If you have a car insurance policy, it’s often a good idea to use the same company for your renter’s insurance to save some money.

Security deposit

This fee is like paying incidentals for your apartment up-front, much the way you would at a hotel by leaving your credit card on file in the event that you take food out of the mini fridge or damage the carpet before you leave.

Once you move out, your landlord will assess the damage to your apartment and take any expenses out of what you paid as the security deposit. However, some complexes and landlords are notorious for keeping your deposit, regardless of what shape your apartment is in when you leave.

Security deposits may be as high as one month’s rent, but they do not cover the actual last month of rent.

Pet fees

These can get tricky, as there’s no uniform way that these get charged.

You might have to pay a one-time fee up front for the entire year. Or you could have to put half down in what they call a “pet deposit” (refundable or nonrefundable) and pay a monthly “pet rent” on top of it. You might even only have to pay the monthly pet rent.

If you already have a pet but maybe it’s staying with your parents, don’t make the mistake of trying to game your lease by moving in your pet part time and trying to get away with not paying the fees.

Most places, if they allow pets at all, will also have a policy for how many days count where the pet is at your place before it is considered a permanent resident. Any time you risk breaking a condition with your lease, you could be asking for more trouble than it’s worth.

First month’s rent

Based on the property’s policies around pro-rating (charging you based on the number of days out of the first month you live there), you can expect to pay pro-rated amounts in addition to an advanced month’s payment.

So, if you move in on June 20, you will only pay for living there for 10 days that month; but you may also be paying for July on top of that, depending on their policy.

Feathering your nest costs money, too

Once you find a place, you need to get some stuff to put in it.

In a perfect world, you’d be able to buy everything you need right around the time you move. But the world’s not perfect, so start with the necessities.

Do you have or need a couch? How about dishes and a dining room table? Bedroom furniture? Maybe some small kitchen appliances like a toaster or a coffee maker?

Little things like shower curtains, garbage cans, and doormats can add up, too. So make sure they’re in your budget. And don’t forget about toiletries and cleaning supplies. Even if you don’t have your own washer/dryer, you will need laundry detergent—unless you’re still going back home to do your laundry.

However, if you set a vow never to pay for the laundromat again, some apartments have what they call a “washer/dryer hook-up” that will allow you to rent your own and have it in your place.

Then the utility bills kick in

Your rent may or may not include your utilities. Some landlords include them as part of your rent payment, some don’t. Some will pay for water and gas, but leave you accountable for electricity. Some make you responsible for everything.

Let’s talk about the utility bills you might have to pay.

• Water—This one is calculated solely on the amount you use. For one person, you might pay about $35/month.
• Electric/gas—Depending on how your place is set up, you may have one or both of these utility bills. Both will fluctuate depending on the season and how much you use them. Plan to spend around $100/month for one person.
• Trash/sewage—Trash is usually a fixed expense, upwards of about $10. It may not seem like much, but in many cases, once you tack on the cost of sewage, you may be looking at paying double what you pay for water for the month. Flush wisely.
• Parking—This will depend on the city you live in and how limited parking is in the area. You could find yourself paying $100 a month for a parking garage pass, or nothing at all for a free spot on the street.
• Internet/cable/home phone—Now might be a good time to consider whether you want these add-ons. Some rental properties will include these into your rent with limited options, based on packaged deals they have with certain companies.

How to lessen the load

There’s one easy way to cut your financial responsibility by at least 50 percent. Get a roommate.

Sure, living alone might sound nice, but your quiet apartment will start seeming pretty oppressive if you never have any money to leave it.

If you do choose to get a roommate, make sure you establish some ground rules. If everyone knows what’s expected of them at the outset, you’re much less likely to fight about things later.