If you're looking for a new apartment to rent, there are certain factors you'll need to take into account. These include the size of your living space, the amenities your building offers, and the extent to which your potential home itself is updated. But there's another factor you'll need to consider, too: cost.
There are various costs associated with getting a new apartment, like the rent you'll need to pay each month and the security deposit you'll need to fork over when you sign your lease. But in some cases, you could face an additional expense: a move-in fee.
How much does a move-in fee cost?
A move-in fee is a nonrefundable fee that some landlords charge new tenants for the privilege of occupying their homes. The logic behind that fee is that your landlord may use it to make your apartment inhabitable -- say, by fixing up damage from previous tenants or even making updates, like replacing older appliances or fixtures with newer ones.
There's no preset rule as to how much a move-in fee costs. While landlords can set this sum somewhat arbitrarily, often, a move-in fee will equal 30% to 50% of a single month's rent. Therefore, if you're renting an apartment that costs $1,000 a month, your move-in fee could total $300 to $500.
What's the difference between a move-in fee and a security deposit?
If you're told you'll be charged a move-in fee to occupy your apartment, you may initially get it confused with your security deposit, even though the two are different.
A security deposit is a refundable sum you pay upfront when you move into a new home. Security deposits are generally the equivalent of a month's rent, though under certain circumstances (such as if you have poor credit), a landlord may ask for a deposit that equals two months of rent.
The purpose of a security deposit is to protect your landlord from damages you cause as a tenant. It can also protect your landlord in the event you fail to pay your rent.
If you cause damage to your home beyond what's considered normal wear and tear or you withhold rent, your landlord has the right to retain that security deposit to make up those financial losses. Otherwise, your landlord is required to return your security deposit to you once your lease comes to an end and you move out.
A move-in fee, by contrast, is nonrefundable. The purpose of a move-in fee is to help your landlord cover the costs associated with getting your home ready for occupancy, and so there should be no expectation of getting it back -- whereas if you treat your home with respect and make all of your rent payments, you should receive your security deposit in return. In fact, your landlord is required to keep your security deposit in a bank account for the duration of your lease so that that money is accessible once your rental agreement comes to an end.
What does your move-in fee pay for?
In some cases, your landlord may give you a detailed list of the things your move-in fee will pay for. These may include:
- New paint.
- New appliances.
- New keys (including a key to your apartment, your mailbox, and the building itself).
- A deep cleaning of your rental unit.
Keep in mind that your landlord is not required to submit a detailed list of what your move-in fee is actually used for.
Can a landlord impose both a move-in fee and a security deposit?
Yes. Move-in fees and security deposits aren't mutually exclusive. It's rare for a landlord or property manager to agree to waive a security deposit, whereas many do not charge move-in fees.
What additional fees can a landlord impose?
In addition to a move-in fee, your landlord could also charge an application fee when you fill out the paperwork to rent your apartment. That fee will usually be modest and will largely be used to offset the cost of running a credit check to ensure that you're a financially responsible tenant as well as a background check to ensure that no red flags jump out.
If you're planning to have a pet live in your rental unit, you may need to pay a pet deposit or pet fee as well. A pet deposit serves as a security deposit for the damage your pet might cause while a pet fee is a sum of money your landlord likely won't give back.
Should you agree to a move-in fee?
If you're looking at a modest move-in fee that's just a small percentage of your monthly rent, then paying one may not be so bad. This especially holds true if that move-in fee gives you access to a property with great amenities and a rental that's otherwise quite affordable given its desirable location.
On the other hand, if your landlord is looking to charge a higher move-in fee -- one that well exceeds 50% of the cost of your monthly rent -- then you may want to look at renting an apartment that doesn't charge one. This especially holds true if money is tight or if you're looking at a host of other expenses in conjunction with getting a new apartment, like hiring a moving company or paying for a storage unit. Also, if there's no shortage of rental units in the area you're looking in, there may be no need to pay a move-in fee.
Can you negotiate a move-in fee?
Though you may have a hard time getting your landlord to agree to waive a security deposit, or charge less for it, you may have more wiggle room with a move-in fee. If you're a prospective tenant with strong credit and solid references, the landlord or property owner you're talking to may be eager to bring you on board and lock you into a lease, in which case he or she may be willing to come down on that move-in fee, or even get rid of it altogether.
You can also ask your prospective landlord what your move-in fee is meant to cover and see if you can negotiate in that regard. You may, for example, agree to waive a fresh coat of paint or a pre-move-in cleaning if it means not having to fork over several hundred dollars.
Moving to a new home can cost a lot of money -- but there's no need to spend more than necessary. If the apartment you're looking at comes with a move-in fee, you may want to take your business elsewhere unless there's a really good reason to pay that added premium. But if that move-in fee is small and paying it won't hurt you financially, it could be your ticket to a great rental.