Renting A Home? Here Are The Hidden Costs To Account For

From brokerage to maintenance and sneaky society charges, tenants often end up paying far more than expected. Here’s a breakdown of costs to watch out for

Renting a home can feel less like stepping into a new chapter and more like navigating a labyrinth of hidden fees and unexpected charges. While the promise of a cosy new abode beckons, the fine print often conceals costs, from steep brokerage fees and society charges to those pesky moving expenses and utility bills, that can stretch your budget thinner than anticipated. Thus, it’s necessary to be informed and prepared before you sign on the dotted line. Here’s all that you need to account for.

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Also Read: Renting A Home? 10 Key Questions To Ask Your Landlord

Brokerage
The first charge you should be aware of is the brokerage fee. “Using a broker to find a rental property often involves paying a fee, typically equivalent to one month’s rent. This is an upfront cost that can strain your finances. If you want to avoid this charge, explore online platforms or rely on personal connections to find rental options; however, note that they may not be as effective as a trusted and experienced real estate broker,” advises Viral Bhatt, founder of Money Mantra, a financial services marketplace. To avoid surprises, negotiate the brokerage fees upfront with your broker to ensure a clear understanding.

Society charges and parking
“Society or community charges are often the most underestimated expense and can turn into a major problem if not researched before signing the lease. They can vary widely depending on the apartment complex or gated community and may include fees for security, water supply, maintenance of common areas, parking, and amenities like gyms or swimming pools,” shares Santhosh Kumar, vice chairman, Anarock Group. This cost is often up and above the maintenance bill that the landlord usually pays.

Also Read: A Guide To Renting Your First Student Home

Moving-in and moving-out charges
Not many people know that you will have to pay moving-in and moving-out charges while shifting to your rented place and when you vacate that place, respectively. “Society may levy a one-time move-in charge which includes the creation of a digital account for services, gate passes, and garage disposable kits among others. A move-out charge is also levied to ensure the garbage from the house is duly disposed of by the housekeeping staff of the society. These expenses can greatly bloat a tenant’s initial rental budget and since these charges are largely non-negotiable, it’s advisable for the tenant to get a clear clarity on each of these charges beforehand to plan the budget accordingly,” mentions Bhavesh Kothari, founder and CEO of a real estate consulting firm.

Also Read: Is Renting Near Work Worth The Cost? Pros And Cons Explained

Utility bills
Even though the landlord may pay your maintenance bills, you will still have to pay utility bills in most of the cases. “Electricity, water, gas, and internet bills as well as repair costs (as and when necessary) are separate from rent and building maintenance bill, and can add up quickly, especially in larger homes or during extreme weather months. Always inquire about average utility costs for the property and include them in your monthly budget,” adds Bhatt. You can also have a clear conversation with the landlord about who will be paying the utility bills and other such charges to avoid any unforeseen expenses.

Moving and relocation
“Packing and moving services can cost anywhere from Rs 5,000 to Rs 60,000 depending on the distance and quantity of items. Relocating within the same city may still cost Rs 5,000 to Rs 35,000. It’s important to factor this into your budget.

Security deposit
Landlords typically request a security deposit equal to two to three months’ rent. This upfront cost is refundable but may be partially withheld for damages or unpaid dues. Always clarify the amount and refund terms before signing the lease,” highlights Ritesh Mehta, senior director/head (northwest and east), residential services, India, JLL.

Furniture rentals
A demographic of people like students or working professionals do not move around with a lot of furniture. They rather rely on rented furniture. If not considered in advance, this cost can cause serious strain on your overall budget. 

Repair costs
“Repair cost is usually one of the neglected costs by the tenants, which may become problematic. Small repairing work like a dripping tap, broken appliances or damages on walls are usually borne by the tenants, and costs may pile up in no time. Without making any budgeting for such unscheduled repairs, tenants may run into financial issues during their tenure,” observes Jayesh Rathod, co-founder and director of The Guardian Real Estate Advisory. To avoid this, ensure that you check the property thoroughly for any defects before signing on the dotted lines. Additionally, annual rent hike is often neglected and creates problems between the owner and the tenant. Many agreements include a five to 10 per cent yearly increase in rent. This can cost thousands if not negotiated upfront. Hidden charges also include preparation of the rental agreement, and pest control if required among others. If you want to terminate your rental contract early and move out soon, you might also have to pay a penalty charge. If there’s a gap between moving-out and moving-in, you may incur hotel or storage costs temporarily.

Tenants should thus thoroughly read the rental agreement and iron out any doubts to avoid any surprises. Inspect the property and request necessary repairs before moving-in. Check for any penalties or clauses that you will be required to pay to the landlord.

Financial stability is ensured by budgeting for unforeseen expenses and negotiating security deposits and brokerage to lower upfront costs. Choosing landlords with open and honest policies helps to avoid unpleasant surprises. Negotiate the terms wherever required as being proactive and informed can help you manage these hidden costs better, ensuring a smooth 
rental experience.

Picture credit: iStock
Picture used for representational purposes only