When you first start renting the thrill of finding the perfect place can be overwhelming. But before you sign that lease it’s important to know all the costs. While the monthly rent is a big part of your budget the hidden costs of renting will hit you upfront and along the way.
Here are the 10 hidden costs of renting in Australia you need to factor into your budget to avoid any nasty shocks:
1. Bond
When you move into a new place you are required to pay a bond. This is a one off security deposit that protects the landlord in case of property damage or missed rent payments.
In most cases, the bond will be the equivalent of four weeks rent. At the end of your lease this money will be refunded to you unless there is damage to cover.
2. Advance Rent Payment
Rents vary depending on the area and suburb with the highest rents in cities like Sydney and Melbourne. In big cities like these unfurnished properties can cost between $250 per week for a studio up to $1200 per week for a house.
Rent is due weekly, fortnightly or monthly depending on your lease terms. While this is expected you may also be required to pay a rental advance before you can move in. This is usually 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.
It’s a small non-refundable amount usually around $50 to $100. Make sure you know about this before you submit your application so you don’t get any nasty surprises.
4. Utilities
Setting up and paying for utilities is another hidden cost of renting. Some properties may include utilities in the rent but this can be vague. You’ll usually need to budget for electricity, gas, water and internet.
To give you an idea here’s a rough estimate of monthly utility costs in major Australian cities:
| Utility | Monthly Cost (Approx.) |
|---|---|
| Electricity | $90 |
| Gas | $60 |
| Water | $30 |
| Internet | $60 |
Remember these costs can vary depending on your usage and the rates in your area. You may also have to pay a connection fee when you first move in.
5. Insurance
Although not mandatory, contents insurance is highly recommended. This insurance covers your personal belongings in case of theft, fire or other disasters.
Your landlord is responsible for building insurance but it doesn’t cover your items. Contents insurance can cost between $150 to $500 per year depending on the level of coverage you choose.
6. Extra Costs
Extra costs can come in many forms. For example:
- Lease Preparation Fee: Some landlords charge a fee to prepare the lease.
- Parking Fees: If you have a car you may need to pay for a parking space or permit.
- Storage Fees: If your apartment has no storage space you may need to rent a separate storage unit.
Always read your lease agreement carefully and ask your estate agent or letting agency about any extra costs you will incur.
7. Maintenance Costs
While major repairs are the landlord’s responsibility, minor maintenance costs are usually the tenant’s. This can include:
- Light bulbs
- Smoke alarm batteries
- General wear and tear items
It’s a good idea to set aside a bit each month to cover these minor repairs as they can add up.
8. Pet Fees
If you have a pet be prepared to pay extra. Pet fees or deposits are common in pet-friendly rentals. These fees can be a one off deposit or an additional amount added to your monthly rent.
9. Moving Costs
Don’t forget about the cost of moving your belongings. Whether you hire a professional moving company or rent a truck and do it yourself, moving costs can be big. Budget for:
- Hiring movers or renting a truck
- Packing supplies like boxes and tape
- Cleaning fees for your old place
10. Exit Fees
When your lease ends you may have to pay extra for:
- Cleaning fees if the property isn’t left in the same condition as when you moved in
- Repair costs for any damage beyond normal wear and tear
- Breaking lease fees if you need to get out of your lease early
Conclusion
Renting can be good but you need to be aware of all the costs. Now you know the hidden costs of renting in Australia, you can plan your budget better and avoid the surprises.
Always read your lease agreement and don’t be afraid to ask your landlord or property manager about any fees you’re not sure of.
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FAQ Section on The Hidden Costs of Renting in Australia
What bills do you pay when renting in Australia?
Tenants in Australia are generally responsible for paying for services such as electricity, gas, phone, and internet. They may also be charged for water usage, depending on the terms of the rental agreement and local regulations.
What is the current rental affordability crisis in Australia?
Australia is currently experiencing its worst rental affordability crisis in 17 years. The rising rental prices have outpaced income growth, making it difficult for households earning the median income to afford most available rental properties.
Why is renting so expensive in Australia?
The high cost of renting in Australia can be attributed to factors such as strong demand from professionals and foreign migrants, significant investor activity, high land and construction costs, cultural preferences for certain locations, and the absence of rent controls.
How much should you spend on rent in Australia based on your salary?
It is recommended to allocate around 25% of your income towards rent to avoid rental stress, according to the Australian Bureau of Statistics. This guideline helps ensure that households do not face difficulties in managing their rental payments.
