Decembere 10, 2022

Understanding First And Last Month's Rent

Are you thinking of finding a rental apartment? After all, there are numerous advantages to doing so. For instance, you do not need to worry about maintenance costs or repair bills, and at the same time, enjoy more flexibility as to where you live. With that said, when it comes to renting, you need to know more about the admin fees and initial rent. In particular, most rental apartments require you to pay upfront first and last month’s rent. Read on to know more about this.

First and Last Month’s Rent Upfront Payment

While it varies from apartment to apartment, as well as where you are renting from, most apartment requires you to pay an upfront payment of the first and last month's rent. Some landlords do this for peace of mind as it helps to guarantee that the final month of their lease is paid.

Alternatively, you may also be required to pay a security deposit in order to remove the particular apartment from the market and ensure you can rent the apartment you want.

But you might be wondering, what exactly is your upfront payment being used for? Well, your property management or landlord can use your last month's rent as a form of security deposit. What this means is you can get your money back if there is no damage done to the rental apartment.

What happens if you or your roommate are left with no choice but to leave the apartment earlier? Setting up expectations for what to do if this occurs is important to prevent serious issues from occurring. For instance, consider the notice period one is required to give before one can leaShould there be any damages that require fixing, landlords can use the upfront money to fix the issues. With that said, your landlords may also take your last month's rent and apply it to the remainder of your lease's last month, allowing you to avoid paying. Some may use the security deposit as your last month's rent, which means they can only use it for that purpose and cannot use it to make any repairs after you leave.

In such a situation, the landlord or property would be responsible for those costs, rather than you or your last month's rent. Therefore, it is key to examine your lease and the reason for your upfront payments to ensure you understand what you are paying and how it will be used.

Advantages of Upfront Payment

While spending a large sum of money upfront for your rental apartment may not appear to be a good idea at first, there are actually some advantages to selecting a rental property that does that. For instance, apartments that need first and last month's rent tend to prioritize upkeep, which means the apartments are probably lovely and well-maintained. Not to mention, due to the greater upfront fees, you will likely be able to attain the rental apartment as you do not have to compete against so many candidates.

In fact, if you reside in a state where landlords and properties are required to store the security deposit in a specific account, like an escrow or savings account, you can actually earn back deposit interest. This means you may get more than you paid depending on how long you remain in the unit, after all, you are just paying the first and final month's rent because you will not only be refunded for your deposit, but you can use it to rent elsewhere.