There is a freedom that comes from renting: You can pick up and move anywhere as long as the lease is up or you are able to pay to break it. And more adults—those who are older and wealthier—are paying premiums for that lifestyle in luxury condos in addition to those who are renting due to circumstances. But the flexibility often comes with an up-front cost, and not everyone pays the same rate. If a renter is younger, a minority, or part of the LGBTQ+ community, they’re more likely to pay an application fee. Location also will play a role in how many initial fees a landlord charges. A larger deposit and renting a single-family home can eliminate the up-front costs, but that requires a renter to be able to shoulder those in the first place.
Renting a home typically allows for more lifestyle flexibility – it makes it easier for households to move on short notice for new career opportunities, for example, while avoiding the commitment of a monthly mortgage payment and/or the sometimes hefty costs of selling a home. But while roughly a third (32%) of tenants that say they plan to continue renting said they’ll do so because they want the ability to move easily as life changes, that flexibility isn’t free.
Renters routinely pay upfront costs when applying for and moving into a rental, according to an analysis of data from the 2019 Zillow Group Consumer Housing Trends Report. Among the most common upfront costs faced by renters are application fees and security deposits – 87% of renters pay a security deposit, and 64% pay an application fee. Among all renters, the typical security deposit paid is $600, and the typical application fee is $50.
But not all groups of renters feel these costs equally. Those upfront fees – and the odds they’ll be required at all – vary significantly by what type of home a renter is seeking and where it is. And the renter’s age, race and/or sexual orientation is also correlated with wide differences in costs.