Surprise: The Hidden Costs of Renting!

January 31, 2021
hidden costs of renting

If you’re a first time renter, there are a few important costs to keep in mind and factor into your budget.

1. Bond Payment

When you move into a new place, you are expected to pay a bond. This is a one-time security deposit that serves as protection for the landlord in the event of property damage or skipped rent payments. In most cases, the bond will cover the equivalent of four weeks of rent.. At the conclusion of your lease, this money will be refunded to you unless there are any damages to cover.

2. Advance Rent Payment

Rents vary depending on the region and suburb, with the highest rents in cities like Sydney and Melbourne. In large cities like these, unfurnished properties may cost between $250 per week for a studio up to $1200 per week for a house. Rent may be due on a weekly, fortnightly, or monthly basis depending on the terms of your lease. While this is expected, you may also be required to pay a rental advance before you are able to move in. This usually covers the first four weeks of your lease.

3. Option Fee

When applying for a rental property, you may be required to pay an ‘option fee’. This covers the cost of processing your application, including a credit check.

4. Utilities

Some properties are all-inclusive, meaning that your rent payments also cover the cost of utilities. However, this term can be quite vague and you may still need to budget extra for cable and Internet service, for example. Other utilities to budget for include gas, water, and electricity. Utility bills are sent out quarterly and will vary depending on your consumption. You may also need to pay a connection fee.

5. Insurance

You may not be legally required to take out contents insurance, but it’s highly recommended to do so. Although your landlord is required to pay for building insurance, this usually won’t cover the cost of damages to your personal property in the event of a disaster or theft. There are many different levels of coverage to choose from, with different price points to match.

6. Additional Fees

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There is usually a fee for the lease itself, and further fees may vary depending on the type of property you are renting. If you drive a car, will you need to pay extra for a parking space or permit? Do you need to pay for extra storage space if your belongings don’t fit within your living space?

Be sure to read over your lease carefully before signing anything, and be sure to ask the letting agency or estate agent about any further fees that you can expect to pay.

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