How Much Rent Can You Afford?

How Much Rent Can You Afford?

Tenants often overestimate what they can afford when looking for a rental, and they’re unrealistic and don’t sit down and add up all their monthly expenses and, as a result, end up having issues paying their rent. Determine what percentage of your income you can afford to put towards your rent while still enjoying life and to save a little.

Review your budget 

What percentage of your income goes towards fixed and necessary expenses, variable expenses, and how much are you saving? Some people are aggressive with savings, while others don’t save at all. Many financial experts recommend a 50/30/20 model, which is:

• 50% goes towards necessary fixed expenses like rent, utilities, groceries, and transportation
• 30% goes towards non-essentials but nice to haves like dining out, movies, shopping, and memberships like Netflix or the gym
• 20% goes towards paying down debt and savings

Since rent is part of the 50% of fixed expenses, what you can afford depends on the other costs. Suppose utilities are included in the rent or low, and you work from home so your transportation expenses are minimal. In that case, rent can be a more significant portion of the 50% of your income than if you pay a lot for utilities and commute an hour to work in your vehicle, adding gas and maintenance.

Overestimate instead of underestimating when it comes to expenses

Expenses can fluctuate, and so can income, so you want to be conservative instead of thinking best case. If you think you’ll get a raise or promotion but haven’t yet, don’t consider it income you already have.

With expenses that fluctuate, figure out an average and then round up so you can be more prepared if they increase instead of blindsided. Rarely do things decrease over time, so overestimating your expenses will ensure you’re prepared and not scrambling to pay rent if your costs are more than you thought they’d be.

Moving expenses

Moving isn’t cheap. On top of security and pet deposits, you have movers to pay and any supplies you need to purchase for the move. Most tenants may need to take time off work and need a few days to overlap to move their belongings over to their new place and still have a few days to clean and prepare their previous place, so you’ll be paying double rent during the overlap period.

Consider renting with a roommate

If you want to live in an area or unit that you can’t comfortably afford on your own, do you know someone else who is looking to move to the same area? If not, are you okay with living with a stranger (who could potentially become a friend later) to make a place more affordable? If so, make sure you do your homework and find someone that fits your lifestyle and is financially similar so that you do not have to pay the entire rent if your roommate cannot afford to or decides to move out early and not pay his portion.

You want to find a place that’s comfortable for you but also won’t break your budget. It’s not fun scrambling every month to pay your rent and not be able to save or have extra money for vacations and other fun things you may want to do.

We are the one you want if you are looking for a Magnolia Property Management Company! RentLife® Property Management CRMC® is the best choice for property management in Cypress, TX. We also offer rentals and property management in Humble, Katy, Richmond, Spring, The Woodlands, Tomball, Conroe, Houston, Magnolia, and other surrounding areas. Contact us today at www.rentlifepm.com or 832-562-3600.