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November 03, 2015

Leasing Costs: What to Expect

Homeownership
Lease

It’s important to have a solid understanding of your financial situation and what you can afford to pay before you start looking for that perfect rental home. Here’s what expenses you can expect from leasing.

Rent

Experts generally suggest that your total cost for housing should be between 20 and 30% or less of your take-home income.

For example, if you take home $3,000 a month, you may be able to afford a monthly rent of between $600 and $900 per month, including utilities.

Deposits

In addition to your first month’s rent, most landlords will require a security deposit of about one month’s rent upfront. It can be more depending on the market or the property. If you’ll be moving with a pet, be prepared to pay a pet deposit or a monthly fee.

Other Costs

Be aware of other potential costs that may come with renting, such as utilities and parking.

You’ll need to account for your current living expenses and all anticipated expenses. Take the time to write them out and compare it to your income before you sign that lease.  It’s probably a good idea to factor in some financial reserves for life’s unexpected emergencies such as an illness or temporary job loss.  You should also consider any future major expenses such as a down payment on a home, a wedding, or college tuition. 

Follow this series to learn what to expect about other important topics and visit My Home by Freddie MacSM where we discuss it all.

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