Generally, rental experts express that you should be spending about 30% of your gross income on rent once a year. That is your gross income, or your income before taxes and other deductions, not your take-home pay. So, for example, if you make $40,000 per year from all sources of income, your ideal maximum rent amount is $1,000 per month. As anticipated, this is a comparatively simple plan to finding out how much rent you can afford. There are usually other expenses that should be foreseen as well.
For instance, if you have a lot of debt or have any type of large monthly payments that you won’t be able to change or reduce, these expenses should be included in your calculations. Above that, your budget should consider an elaborate listing of two types of expenses: fixed and variable. Food, transportation, medicine, utilities, and other necessary expenses should be added up in the “fixed expenses” category. Entertainment, vacation travel, and so on would go on the “variable” (a.k.a. optional) list. Once you acknowledge how much you’re spending, you can more efficiently come to a realistic estimate of how much rent you can afford. In places where rents are very pricy, it may be difficult to stick to the 30% rule. This may mean minimizing some of your other expenses just to better afford your rent.
Of course, how much you think you can afford to pay is only one half of the equation. When applying for a rental home, different property management companies and landlords may have different ideas about what constitutes a desirable tenant. Even if you can demonstrate that you can afford the advertised rental rate, some property managers or landlords may still hesitate to offer you a lease for other reasons. Qualification criteria may include things such as past credit history, and whether or not you own pets.
For the best result, do your best to be honest with the property manager or landlord and provide all requested information promptly and in full. It doesn’t harm to make certain that you arrive on time at all meetings and to dress up a little, as well. These may appear like small things, but an agreeable first impression could help you impress a property manager that you will be a responsible and conscientious tenant.
As anticipated, even with your best efforts, sometimes the rental house you want is given to someone else. If that happens, try to stay positive and to do what you can to maintain or improve your financial situation. You may not understand why the property manager or landlord didn’t select you, and it may not mean that you are not a good candidate for another property. As long as you are applying for rental homes that fall within your range of affordability, the right one for you should come along soon.
Are you in the market for a new rental home? If so, please check out our available listings and contact us if you find something that piques your interest.