Whether you’re a first-time renter or just moving to a new place, you want to know what bills to factor into your cost of living. Multiple services and monthly utility bills typically add to your financial responsibilities each month in addition to your basic rent.
In fact, over 90% of renters pay extra for one or more utilities, according to the U.S. Census Bureau’s 2021 American Community Survey. Depending on your rental agreement, you may pay the utility companies directly or the property owner may factor these costs into your rent payments.
This post details common bills that may come with renting a house or apartment so that you know how much to budget beyond your monthly rent.
While your exact bills depend on your specific circumstances, renters can typically expect to pay for common utilities such as electricity and gas, water and sewage, and trash disposal and recycling. Not all bills apply to all tenants, of course. If you don’t have pets, for example, you won’t have a pet fee.
Your average utility bills may vary based on circumstances as well. Not only can rates differ by location and time of year, but also you may not have a separate gas bill if your apartment complex uses electricity only or if your landlord includes all utilities in the rental cost.
Size and energy efficiency matters as well. When you rent a house — especially a larger one — you may have to pay more in utility costs than you would for an apartment, and the ability of your rental to maintain its temperature and whether you have energy-efficient appliances can impact your bills.
Below, we break down the common rental bills for apartments and houses, as well as their average costs.
The monthly cost to rent an apartment or a house depends on multiple factors that work together to create a price, including the following:
These factors don’t work independently of each other. Just because an apartment is new doesn’t mean it will cost less if it’s smaller or has fewer amenities than other apartments in the same neighborhood or if it’s located in a less desirable area.
Average rental prices depend significantly on the city and state in which you live. The following statistics show the range of typical rental costs in the United States:
The cost of electricity and/or gas depends on a variety of factors, some within your control (such as the temperature you set your thermostat to) and others less so (such as the efficiency of your rental unit’s appliances). You can estimate your monthly energy bills by considering the following factors:
To estimate your energy charges, consider the following average monthly electricity bills in the United States from 2021 according to date from the U.S. Department of Energy:
Unless your rent includes water charges, you will likely have to pay based on how much water you use. Water utility providers often charge by centum cubic feet (CCF) or gallons (1 CCF equals 748 gallons). On average, Americans use around 88 gallons of water per day per person in the household. This translates to 2,640 gallons (or 3.5 CCF) every month (30 days). Water bills often include sewer charges as well, but they may be listed as a separate line item.
The following factors influence your water and sewage bill:
While water costs in the U.S vary greatly depending on a host of factors, the following statistics from Statista show the average monthly water prices as of July 2022:
Most Americans use the internet, but typically tenants pay for internet and cable separately from their rental costs. While landlords rarely include the service in the rent, they may have an agreement with local providers to make charges less expensive. For instance, an apartment complex might offer a discounted deal with a specific provider so that tenants automatically sign up with that company.
While you may consider having the internet and cable at home a necessity (especially if your family works or studies remotely), you can cut costs by eliminating an internet bill if you feel comfortable only accessing it from work, school, or your mobile devices. Although cable may be bundled to your internet bill, you may be able to reduce this cost as well if you need to lower your monthly expenses. Consider canceling cable and signing up for a cheaper streaming service instead, such as Netflix or HBO.
Internet and cable prices depend greatly on several factors — location, local market competition, standalone versus bundled options, and so on — but the numbers below will help you get an idea of typical costs as of Q1 of 2021:
Trash disposal services vary by apartment complex, residential neighborhood, city, and state. Some rental companies provide dumpsters and take care of arranging trash and recycling pickup for tenants. Others offer valet waste removal where you pay a monthly fee to have your trash picked up at your front door on certain days of the week. For homes, recycling and trash often cost a monthly fee as well. Landlords sometimes will roll this into the total cost of rent.
Make sure you verify waste removal details in your lease or with your property manager, as agreements may require certain types of containers, limit the number of bags you can set out, or prohibit certain kinds of trash. Whether the homeowner or rental company is required to provide waste receptacles or arrange for collection varies by state and landlord.
To protect themselves from legal liability, landlords may require that renters carry insurance in case a fire, theft, flood, or other event damages property. Renter’s insurance prices vary by the state you live in, how much coverage you need, and the deductible amount you choose. For example, it will likely cost more for $50,000 worth of coverage and a $500 deductible than it would for $15,000 worth of coverage and a $1,500 deductible.
Fortunately, renter’s insurance won’t likely use much of your monthly budget, as the following averages from October 2022 show:
If you plan to have a pet at your property, you may incur extra rental charges. Pet costs can include monthly pet rent amount, one-time pet fees (where you pay an upfront, nonrefundable charge), and pet deposits (where you put down money that you may get back at the end of your lease, provided that your pet doesn’t damage the property). Some states limit the amount a landlord can charge for various pet rental costs. However, landlords cannot charge extra for service animals because they do not count as pets under fair housing laws.
Pet rental costs vary, but the following ranges will help you get an idea of how much you can expect to pay if you have a pet:
Landlords may charge you separately for yard maintenance and lawn care, roll it into the cost of the rental, or expect you to do it yourself. Both homes and apartments with yards may require lawn mowing, landscaping, trimming shrubs, removing dead plants, mulching, snow removal, and more. Landlords may provide you with equipment such as a lawn mower if they expect you to maintain the yard yourself, but if not, you may need to buy a mower or contract a company to perform the service for you. In either case, make sure to consider this cost when deciding on a rental property.
Apartment amenities refer to a variety of non-essential features that make a rental more attractive to tenants. Apartment complexes typically incorporate such amenities in the rental cost, but others may charge a fee to use certain services.
Extra amenities may include:
Landlords may apply a one-time fee to use these facilities for the duration of your lease, charge recurring monthly payments or include some amenities in the lease (use of the pool) but charge extra for others (clubhouse event rental).
Apartment amenities can help offset other costs — a gym at your apartment complex could enable you to cancel your fitness club membership, or an on-site storage facility could eliminate the need to rent a separate storage unit. Since some amenities cost extra, however, make sure to understand what’s included in rent and what incurs an extra fee before signing a lease agreement.
Smart financial management involves knowing how much to spend on rent before selecting your next apartment or home rental. Everyone’s situation is unique and how much you should spend largely depends on how much you can spend after factoring in other bills you need to pay each month. However, as a general rule, look to spend 30% or less of your monthly gross income on rent.
To calculate the maximum amount you should spend, take your gross monthly income (your pay before taxes and other deductions) and multiply it by .30.
If you make $40,000 a year, for example, your gross income totals about $3,333 a month. When you multiply $3,333 by .30, you get around $1,000 as your maximum monthly amount for rent and utilities. Use your calculation as a starting point when factoring your budget for rent, and do this before looking for a new rental unit.
Once you choose an apartment or home to rent, you might like to know that paying rent may even help your credit score if you pay with a credit score or use a third-party app or service to have your positive rental history reported to the credit bureaus.
Ana Gonzalez-Ribeiro, MBA, AFC® is an Accredited Financial Counselor® and a Bilingual Personal Finance Writer and Educator dedicated to helping populations that need financial literacy and counseling. Her informative articles have been published in various news outlets and websites including Huffington Post, Fidelity, Fox Business News, MSN and Yahoo Finance. She also founded the personal financial and motivational site www.AcetheJourney.com and translated into Spanish the book, Financial Advice for Blue Collar America by Kathryn B. Hauer, CFP. Ana teaches Spanish or English personal finance courses on behalf of the W!SE (Working In Support of Education) program has taught workshops for nonprofits in NYC.
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