This lesson is general education about U.S. personal finance, not financial, tax or investment advice. Tax rules and limits change every year; check IRS.gov or a qualified professional for your situation.
What you’ll learn
- Most landlords charge a security deposit of one to two months’ rent, and several states cap the amount by law.
- Application fees are usually nonrefundable, and applying to several units means paying that fee again each time.
- Move-in day often combines first month’s rent, a deposit and sometimes last month’s rent in a single payment.
- Colorado requires application fees to match the landlord’s actual screening costs, and Maryland caps deposits at one month’s rent on leases signed on or after October 1, 2024.
- Setting a savings target from a written cost list keeps a deposit from becoming credit card debt.
Rent is the number everyone compares, but it is rarely the number that empties your checking account in month one. Between application fees, a security deposit, the first month’s rent, a truck and a stack of setup costs, the bill for moving in can run to several months of rent at once. This breakdown walks through each line, what drives it up or down, and the state rules that put ceilings on some of it.
Application and Screening Fees, Before Anyone Says Yes
The costs start before you are a tenant at all. The Consumer Financial Protection Bureau notes that many landlords use a tenant screening report to decide whether to rent to you and how much to charge for a security deposit, and it suggests knowing what that report will show before you apply.
Application fees are generally nonrefundable. Texas law draws a useful line between two payments that sound similar: an application fee, defined as a nonrefundable sum to offset the cost of screening an applicant, and an application deposit, which is refundable if the landlord rejects you. Ask which one a landlord is collecting before you pay.
Two rules from Colorado show what protections can look like where they exist. A landlord there may not charge an application fee unless the entire amount covers the actual cost of processing the application, and the fee must be the same for every applicant for the same unit. If the application is denied, the landlord must provide a written notice stating the reasons. A landlord who violates the fee rules can be liable for triple the fee plus court costs.
Because each application carries its own fee, applying to five apartments means paying five times. Screening requirements and fee rules vary by state, so check what your state allows before you start applying.
Security Deposits and the Rent Due at Signing
A security deposit is money the landlord collects, usually at the start of the tenancy, to cover unpaid rent or damage beyond normal wear and tear. It is typically collected alongside the first month’s rent, and often the last month’s as well.
Most landlords charge one to two months’ rent, and the average for an apartment in the US runs between one and one-and-a-half months in most markets. The ceiling depends on where you live:
- California limited deposits to one month’s rent for most tenancies effective July 1, 2024, with an exception allowing two months for small landlords who own no more than two rental properties with no more than four units total. Nonrefundable security deposits are against the law there.
- Maryland caps the deposit at one month’s rent for leases signed on or after October 1, 2024, and two months for earlier leases.
- Pennsylvania allows up to two months’ rent in the first year, dropping to one month after that.
Keep the deposit separate in your head from last month’s rent. They are often collected in the same payment, but they are different money: the deposit is refundable, minus lawful deductions, while prepaid rent pays for a month you actually live there. In Pennsylvania, if your deposit is more than $100 after two years, the landlord must hold it in an interest-bearing account and pay you the interest minus 1 percent for expenses, so a $500 deposit earning 5 percent returns $20 a year to you.
One-Time Setup Costs: Moving, Supplies and Utility Deposits
No source sets a standard dollar figure for the moving itself, and honest budgeting means admitting the range is wide. What moves the number:
- How much you own and how far you go. A few boxes carried in a friend’s car costs almost nothing; a full apartment across town needs a truck or a moving crew.
- What the new place lacks. Shower curtains, lamps, a mattress, basic cookware and cleaning supplies are common first-apartment purchases, and they arrive all at once.
- Utility deposits. Electric, gas, water and internet providers may require a deposit or setup fee from a new customer with no payment history. The amount depends on the provider and your record, and rules vary by state, so ask each utility what it charges before move-in day.
The First Month of Bills You Might Not Have Predicted
Once you are in, the recurring costs begin, and some of them are easy to forget because nobody paid them on your behalf before. Rent and the utilities in your name are the obvious ones. Add the phone bill, internet, groceries for a kitchen you stock from zero, and transportation to a new commute.
Renters insurance is another line worth planning for before move-in day rather than after, and our explainer on what renters insurance covers walks through the protection it provides.
The first month is also when an unplanned budget gets tested. If you have never tracked a full month of spending, a first-timer’s guide to tracking your spending shows how to record every dollar and turn the results into a plan built on real numbers. And if utility bills strain the budget, help exists: the federal LIHEAP program offers year-round energy assistance through local offices, reachable at the National Energy Assistance Referral hotline, (866) 674-6327.
Try it
Before you hand over a deposit, photograph or video every room, including the appliances. When you move out, that record is the fastest way to show what counts as ordinary wear and tear and what does not.
A Sample Move-In Budget, Line by Line
| Cost | What to expect | What moves the number |
|---|---|---|
| Application and screening fees | Charged per applicant, per unit applied for | State rules; in Colorado the fee must equal the landlord’s actual processing cost |
| Security deposit | One to two months’ rent for most apartments | State caps, furnished or unfurnished units, and what your screening report shows |
| First month’s rent | A full month, due at signing | The listing rent itself |
| Last month’s rent, if required | Another full month, due at signing | Some landlords collect it, some do not; rules vary by state |
| Movers, truck and supplies | Varies widely | How much you own, how far you move, what the apartment lacks |
| Utility deposits and setup fees | Varies by provider | Your payment history and each provider’s rules |
| Renters insurance | A separate policy premium | Coverage choices; see the guide linked above |
Total the months-of-rent rows first, because they dominate. On a one-bedroom at $1,400, a one-month deposit plus first month’s rent is already $2,800 before a single box is packed.
Where the Rules Require Disclosure
You are not limited to what a listing says. Several checkpoints exist:
- The lease itself should state the deposit amount and what it covers, and in California a landlord cannot legally collect a deposit labeled nonrefundable.
- Texas landlords who offer a monthly fee instead of a security deposit must give written notice of your right to pay a deposit instead, your right to stop the monthly fee at any time, and the amount of each option.
- Maryland landlords must give a written receipt for the deposit and face a $25 liability if they fail to. When you move out, you can request an inspection by certified mail at least 15 days before moving, and the landlord must send a written list of any charges within 45 days after the tenancy ends.
- Pennsylvania landlords who hold an interest-bearing deposit must give you a written statement of the amount deposited and the bank’s name and address.
If you live in a HUD-insured or assisted property, HUD’s Multifamily Housing Complaint Line at 1-800-MULTI-70 (1-800-685-8470) takes complaints about management, maintenance and mismanagement. The CFPB also points renters to local experts who help with housing questions free or at low cost.
Building the Savings Target Before You Search
Work the math backward from the table. Multiply the likely monthly rent by the deposit months your state allows, add first and any last month’s rent, then add your best estimates for moving, supplies and utility deposits. That sum is the savings target, and it is almost always bigger than people expect.
The most reliable way to hit a target that large is automation, moving a fixed amount to savings with every paycheck before spending happens. Our guide to paying yourself first explains how to set that up. One caution as you budget: a deposit you cannot afford today turns into revolving debt tomorrow, and interest on a credit card can outlast the apartment. Waiting an extra two months to move costs less than financing a deposit at card rates.
Common questions
Is a rental application fee refundable if I am rejected?
Usually not. In Texas law, for example, an application fee is defined as a nonrefundable payment to cover screening costs, while an application deposit is refundable if you are rejected. Ask which one you are paying before you hand over money.
How much is a typical security deposit?
Most landlords charge between one and two months’ rent, and the average for an apartment runs between one and one-and-a-half months in most markets. State law caps the maximum, so the amount depends on where you rent.
Can a landlord keep a deposit for normal wear and tear?
No. Under California’s rules, for example, a landlord cannot use the deposit for repairs due to ordinary wear and tear, only for cleaning beyond the move-in condition and restoring property like keys. Deduction rules vary by state.
What happens if my landlord overcharges the deposit?
Some states give you a remedy. In Maryland, a tenant charged more than the legal maximum can recover up to three times the extra amount, plus reasonable attorney’s fees, during the rental period or within two years after it ends.