As a renter, realizing how much rent you can afford is critical before you begin your rental home search. One helpful approach to determining exactly how much rent you can afford is by carefully examining your household budget. By gathering accurate income and expense numbers, you can feel more assured when searching for a rental home that suits your lifestyle and budget.
Regardless, property management companies have a wide range of rental properties available. Therefore, it’s always a good idea to remain flexible and keep your options open during your rental home search.
Assess your monthly income and expenses
Generally, rental experts recommend that you should be spending no more than 30% of your gross income on rent every year. That is your gross income before taxes and other deductions, not your take-home pay. In this case, if you earn $40,000 annually from various sources of income, the recommended maximum rent amount would be $1,000 monthly.
Of course, this is an easier means to figuring out how much rent you can afford. It is important to keep in mind that there may be other expenses to consider.
For instance, if you have a significant amount of debt or large monthly payments that you cannot change or decrease, these expenses should be included in your calculations. In addition, your budget should be composed of a detailed list of two types of expenses: fixed and variable. Food, transportation, medicine, utilities, and other necessary expenses should be added to the “fixed expenses” category. Entertainment, vacation travel, and so on would go on the “variable” (a.k.a. optional) list.
Once you know how much you’re spending and where, you can more easily come to a realistic estimate of how much rent you can actually afford. Sticking to the 30% rule in areas with high rent may be difficult. You might need to make some changes to your other expenses to better afford your rent.
How to approach landlords or property managers
Certainly, how much you think you can afford to pay is only one aspect of the equation. When applying for a rental home, it is important to keep in mind that various property management companies and landlords may have their own preferences when it comes to selecting tenants. Even if you can demonstrate that you can afford the advertised rental rate, some property managers or landlords might be unwilling to offer you a lease for various reasons.
Despite all of your attempts, there may be situations where the rental home you desire is leased to someone else. During moments like these, it’s important to stay positive and continue to manage or improve your financial situation. Just a friendly reminder, not securing a particular rental home doesn’t necessarily mean you’re not a strong candidate for another property. As long as you’re applying for rental homes within your affordability range, the perfect one will come along.
Are you in search of a new rental home in Suffolk or the surrounding area? Real Property Management Hampton Roads can be useful! Explore our available listings, and feel free to reach out with any queries.
Originally Published on Jan 10, 2020
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