A renter needs to know how much rent you can afford before they look for a place to live. An excellent method to determine exactly how much rent you can afford is by diligently examining your household budget. If you get your accurate income and expense numbers, you can search for a rental home that meets your budget and lifestyle with more confidence.
On the other hand, different property management companies have different kinds of rental properties, so it’s best to be flexible and keep your options open throughout your rental home search.
Assess your monthly income and expenses
Normally, rental experts says that you should be spending no more than 30% of your gross income on rent per annum. That is your gross income before taxes and other expenditures, not your net pay. Let’s say you produce $40,000 yearly from all sources of income, your ideal maximum rent amount is $1,000 per month.
That being said, this is a pretty basic way to figuring out how much rent you can afford. A lot of time, you need to think about other expenses as well.
Think about if you have a lot of debt or make large monthly payments that you can’t change or lower; these expenses should be included in your calculations. Additionally, your budget should have a detailed list of two types of expenses: fixed and variable. Things like food, transportation, medicine, utilities, and other important costs should be included in the “fixed expenses” group. On the “variable” (also called optional) list would be things like fun things to do, vacation trips, and so on.
As soon as 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. In areas with high rent, it might be hard to stick to the 30% rule. To better afford your rent, you may need to change some other costs.
How to approach landlords or property managers
Obviously, there is more to it than just how much you think you can afford to pay. When applying for a rental home, various property management companies and landlords may have distinct suggestions about what makes a good tenant. 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.
Regardless of how hard you try, there may be scenarios where the rental home you desire is leased to someone else. It’s important to stay positive and continue to manage or improve your financial situation during these times. Remember that just because you didn’t get one rental home doesn’t mean you’re not a strong candidate for another property. As long as you’re applying for rental homes within your affordability range, the suitable one will come along.
Do you want to rent a new house in Burbank or an adjacent area? Real Property Management Vision may be useful! Check out our available listings and let us know if you have any questions.
Originally Published on Jan 10, 2020
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