Here’s How Much Money to Save for Renting a New Apartment

Moving to a new apartment can signal the start of an exciting new chapter in life. But along with this excitement can also come the stress of knowing just how much money you’ll need to have saved up before the big move. The exact amount will depend mainly on the area of the country you are in, but several factors will help you budget just how much you’ll need for your situation.

“Because each month constitutes 8% of the annual rent, an easy way to think about this is that having four times the monthly rent in reserves should cover basic moving costs,” says Monica Breese, a real estate broker with Compass. 

One of the first things you’ll need to consider is how much the security deposit will be, as most rentals will want this deposit along with your first month’s rent upfront. Some rentals may even want a security deposit and the first and last month of rent before you can move in. 

The security deposit cost will depend on the size of the apartment, location, and local market conditions. In addition to this, check to see if your potential new apartment charges for an application fee and any credit checks. You’ll also need to factor in the cost of renter’s insurance, which many apartments require you to have before moving in. Some rentals may also charge a move-in cleaning fee.

Aside from these upfront costs, it’s recommended that you have a cushion of three months’ rent set aside for any emergencies or unexpected expenses. This cushion should cover rent, utilities, and other recurring costs like parking or pet fees associated with the apartment.

Be prepared for moving costs, which can vary wildly depending on whether you choose to do the move yourself or hire movers and what part of the country you live in. Moving costs can range anywhere from $1,000 to $6,000, depending on the furnishings and items you’re moving. Remember that if you do the move yourself, you may still need to rent a truck and buy packing supplies.

Every apartment move will also come with plenty of little expenses you don’t anticipate popping up — everything from extra cleaning supplies to last-minute packing materials. These can be more frustrating than anything, but they are still worth considering when budgeting for a move. Other expenses you might not remember until you are already in your new space are cable and internet service. Be sure to make arrangements for these hookups before moving. You may want to stock up on groceries for your new apartment and get items like shower curtains and bathroom supplies.

So, what is a good ballpark figure to consider saving up for before a move? Ian Katz, a real estate broker with Compass in New York City, crunched some numbers using the median asking rent of a two-bedroom in Brooklyn: $5,500. According to Katz, with $5,500 a month in rent, a tenant can expect to also pay a one-month security deposit, close to $2,000 in moving fees, a standard broker fee of 15 percent of the annual rent (“This can be less, either no fee or one month, but in a strong segment with light inventory, 15 percent is standard,” Katz explains), a year premium of renter’s insurance, and a few hundred dollars in miscellaneous application fees.

The total number for a typical New York City move like this? “About $22,200, of which only $5,500 is refundable at the end of the lease,” Katz says. “So, as one can see, ample liquidity is needed just to move and start one’s lease.”