Renting an apartment or a house is something that many people do when they need a place to live but do not yet want to buy a house, and if this is something you are considering, you should take the time to determine how much you can comfortably afford to pay for the house you choose to rent. Taking time to do this will help you protect your finances by ensuring that you can afford the house you choose, and here are some tips to help you do this.
Use a percentage of income
One way to determine how much you can afford to pay for your rent is to use a percentage method based on your monthly income. Some people feel that you should spend no more than 30% of your monthly income on your rent payment. If you want to be safe about it, add up the monthly rent plus extra costs, such as utilities, and make sure that the amount is less than 30% of the income you bring home each month. For example, if you earn $4,000 per month, you should aim to spend no more than $1,200 on your rent and extra expenses each month. Using this calculation can help you narrow down what houses you should view.
Create a budget
You can also determine an amount to stick with by creating a budget. To do this, write down your monthly income. Next, write down all the expenses you have and include a cushion for all your extra things, such as gas, groceries, entertainment, and savings. Once you have the expenses listed, add them up and subtract them from your monthly income. The answer to this should show you approximately how much you can afford for your rent.
Get a roommate if needed
If you follow these tips and are having trouble finding a house you can afford to rent, you could always consider finding someone to share the costs with. In other words, you could get a roommate, and each of you could then pay for half of the costs of the house, making it more affordable for both of you.
These are some of the best ways to determine the amount of rent you can afford to pay. To rent a unit in your city, talk to a rental management firm today.
For more information on homes for rent, contact a company like ABA Rental Properties Inc.
