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October 20, 2015

The Leasing Process: What to Expect

Rental Housing
The Leasing Process: What to Expect

You’ve decided to rent and you’ve found a place you like. The property owner is going to want you to sign a lease that locks you into a term (usually a year, but sometimes shorter or longer) and a monthly rental payment plus a security deposit. Here’s what you’re likely to experience during the leasing process – and some steps you should definitely take before signing that lease.

Step 1: Tour the property

  • Be prepared with a list of questions. Are utilities included? Is the home wired for cable and Internet? When will the home be available? Will it be painted before you move in? Who is responsible for minor repairs or maintenance? Are pets allowed?

Step 2: Submit a rental application

  • To speed up the process, have copies of all of the documents you'll need to rent a place ready before you start looking.

Step 3: Negotiate

  • Negotiate any special terms before you sign the lease. In addition to negotiating the rent, you may be able to arrange for the security deposit to be paid over a few months instead of all at once. Make sure anything you negotiate is captured in writing and signed by both parties.

Step 4: Do a walk-through

  • It's best to do a walk-through inspection of the property with the landlord before you sign the lease. Have the landlord document any damage or wear and tear that you see in the unit.

Step 5: Read and sign the lease

  • Take time to read the lease carefully, line-by-line, as it is a legally binding contract. If you have questions, ask the landlord or a trusted advisor.

Step 6: Have your checkbook ready

  • Be prepared to give the landlord the security deposit, the first month's rent, and any other fees when you sign the lease.

Leasing Costs

  • Security Deposit. The security deposit is typically equal to one or two months’ rent. You will get this money back when you move out if there is no damage or excessive wear and tear. It’s critical to have a walk-through inspection with your landlord to document existing damage and wear and tear before you take possession of the unit.
  • One or Two Months’ Rent. Landlords typically require one or two months’ rent up front.
  • Pet Deposit. If you have pets, you may have to pay a pet deposit upon moving in. Sometimes, landlords charge a monthly pet fee, or "rent" in addition to, or instead of, a pet deposit.
  • Application Fee. The application fee often covers the cost of pulling your credit report.

Here is a sample breakdown of an apartment that rents for $800. Deposit amounts and application fees will vary.

One month’s security deposit   

$800

Two months’ rent (first and last)

$1,600

Pet deposit 

$200

Application fee

$30

Total upfront money to rent the property:

$2,630

Still have questions?  We have lots more information available about the renting timeline.

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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