When looking for a rental property, it’s critical for renters to have an idea of how much rent they can afford. The most effective way to determine exactly how much rent you can afford is by thoroughly examining your household budget. By getting accurate income and expense numbers, you can more surely search for a rental home that properly matches your way of life and financial situation.
However, it is a good idea to be open-minded and flexible when doing your rental home search because different property management companies offer multiple types and variations of rental properties.
Assess your monthly income and expenses
Rental experts generally advise that you should be spending no more than 30% of your gross income on rent yearly. This represents your gross income, not your take-home salary, before taxes and other deductions. For example, if you make $40,000 per year from all sources of income, your ideal maximum rent amount is $1,000 per month.
Certainly, this is an exaggerated way of figuring out how much rent you can afford. Consideration must frequently be given to other expenses.
For instance, if you have a lot of debt or make large monthly payments that unable to change or lessen, these expenses must be included in your calculations. Aside from that, your budget should be composed of a detailed list of two types of expenses: fixed and variable. The “fixed expenses” category should be expanded to include costs for utilities, food, transportation, medication, and other necessities. Things like entertainment and holiday travel would be considered “variable” (a.k.a. optional).
Once you understand how much you’re spending and where, you can more readily 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 hard. You may need to adjust some other expenditures to better afford your rent.
How to approach landlords or property managers
Certainly, the amount you believe you can afford to pay is only one-half of the story. When applying for a rental home, several property management companies and landlords may have different thoughts about what constitutes a suitable tenant. Even if you can demonstrate that you can afford the advertised rental rate, some property managers or landlords may be unwilling to offer you a lease for a variety of causes.
Sometimes, the rental home you desire is leased to someone else, even with your best efforts. It is critical to stay positive and continue to manage or improve your financial situation. Bear in mind that not acquiring a specific 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 right one will come along.
Do you want to rent a new home in Lake Los Angeles or somewhere close by? Real Property Management Traditions can give assistance! Look over our available listings and never be afraid to contact us with any inquiries.
Originally Published on Jan 10, 2020
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
