As a renter, determining how much rent you can afford is vital prior to beginning to look for a rental home. The easiest approach to determine how much rent you can afford is by attentively examining your household budget. Accurate income and expense numbers will give you greater confidence while searching for a rental home that complements your lifestyle and earning.
Even so, different property management companies offer various types and variations of rental properties, so it’s good to stay flexible and keep your options open during your rental home search.
Assess your monthly income and expenses
Generally, rental experts advise that you should be spending no more than 30% of your gross income on rent annually. That is not your take-home pay; rather, it is your gross income before taxes and other deductions. Let’s say your annual source of income is $40,000; your optimal maximum rent amount would be $1,000 per month.
Undeniably, this is an unsophisticated method for figuring out how much rent you can afford. Frequently, there are other expenses that must be considered.
For instance, if you have a lot of debt or make large monthly payments that you cannot alter or lower, these expenses should be included in your calculations. In addition, your budget should be made of a detailed list of two types of expenses: fixed and variable. Food, transportation, medicine, utilities, and other required costs should be added to the “fixed expenses” list. Entertainment, vacation travel, and so on would go into the “variable” (a.k.a. optional) category.
As soon as you are aware of how much you’re spending and where, you can more simply come to a realistic estimate of how much rent you can actually afford. Adhering to the 30% rule in areas with high rent could be challenging. To better afford your rent, you might need to make some other spending adjustments.
How to approach landlords or property managers
Undeniably, how much you think you can afford to pay is just one part of the narrative. Different property management companies and landlords may have varying standards for what makes a suitable tenant when it comes to applying for a rental home. Even if you can demonstrate that you can afford the advertised rental rate, some property managers or landlords may hesitate to offer you a lease for various reasons.
Sometimes, no matter how hard you try, the rental home you desire is leased to someone else. In these cases, it’s vital to stay positive and continue to manage or improve your financial situation. Recall that losing out on a specific rental home doesn’t automatically imply that you’re not a strong candidate for another property. As long as you’re applying for rental homes within your affordability range, the appropriate one will come along.
Are you trying to find a new place to rent near Yardley or in the area? Real Property Management Prosperity can give assistance! Take a look at our available listings, and don’t hesitate to contact us with any inquiries.
Originally Published on Jan 10, 2020
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