When it comes to renting an apartment, there is one thing that is more important than any other question: can I afford this? While you may look at a rent number and know that your monthly check would cover it, one of the biggest mistakes that you can make is not budgeting correctly. How can you know if you’re paying the right amount? While rent can be complicated to figure out, there is a general rule of thumb that you can follow to make sure that you are paying a good price for your rent while still leaving enough money in the bank for everything else you need from day to day.
Most financial experts say that you should spend about 30% of your monthly income before taxes on rent. Some landlords will require you to make three to four times the amount of rent in a month, but these numbers are often fairly close, so you can understand the approximate ratio between intake and rent payments. This is because you still need to afford things like utilities, food, entertainment, and still hopefully have enough to put away a little each month in case of emergencies or to fill up your savings account.
When it comes to making sure you make enough to pay rent and still have money left for other things, it is important to write out a budget. Many people find it beneficial to work backwards from amounts that they know they already have to pay to find how much rent they can afford. This means that if you track how much you spend on food, entertainment, and other things in a month and add that to approximate utility costs and see what is left over from your monthly budget, you may have an easier time. If this matches the 25-30% figure, then that’s perfect!
Here at Talley, we know how important having a place to live is. There isn’t much that can compare with the feeling of having a space that is your own, even if you are renting it from another person. We know that everyone’s financial situation is different which is why we have listings that hit multiple price points. We want to give as many people as possible the opportunity to have their own place, so take a look at what we have to offer and see if any of them will work for you!