How much rent can I afford?

Question

Is there a rule of thumb that says how much rent I can afford based on my wage?

Answer 1

Typically 30% of your income for rent and utilities is considered "affordable."

Answer 2

The rule of thumb is that rent should be up to one-third of your wages. I'm not sure, though, if this rule means your wages before tax or after tax.

However, I personally find that this is not even slightly realistic. I live in central London so if I actually paid one-third of my wages for rent, with council tax, utility bills and transportation costs on top of this, I would have only a pittance left over, which would basically cover food and nothing else. So, I found a place where my rent is less than one-fifth of my take-home pay.

My personal rule of thumb is that if you're renting, always find the cheapest place you possibly can. Rent is just lining someone else's pockets. Pay as little as possible so that you can afford to save up for your own place.

Answer 3

The answer is NONE! Why throw money away? If you rent, you pay someone else's mortgage payment and a profit to them. Many people are unaware that you can often own a condo, townhome or house for no down payment and payments that are equal to or less than rents in the area. So I advise you, even if you work for minimum wage, to consider owning instead of renting. If you plan to stay for at least 1 year, you'll be much better off. On the other hand, if you can't commit to staying for at least a year, go ahead and rent.

Answer 4

Your rent should never be more than 1/3 of your monthly income and most landlords will require that to qualify. So $36,00/ yr gives you $3,000/ mo so you should pay no more than $1000/ mo rent. Depending on what area you are in you should be able to find a decent place for much less than that and save some money.

Answer 5

I say take your monthly wage, subtract 10% of it (this should go directly into your savings). Then subtract all your bills and things you pay for (car, insurance, phone, school, etc, etc). From that total, subtract your necessary future bills (gas, electricity, water) and then luxury bills (internet, cable, Netflix, etc). Whatever you have left over is what you can pay for rent.
I always say put some money into your savings account (open one if you don't have one) in case your car breaks down, you get into an accident, or any of life's unexpected emergencies. That way, you will still have some money left over to pay all your bills and rent on time.

Answer 6

Create a budget with proposed expenses and find a rent amount that you're comfortable with.

Example:
Rent: $500
Car: $300
Cell: $60
Credit cards: $150
Electric: $75
Other: $200

Total monthly: $1285

If you bring home $2000 month then you're good. You'll have about $715 left over.

If you bring home only $1500 a month, then it may be a little tight for you. You have to allow for other expenses like gas and stuff like that.

Answer 7

I have heard of the rule for an engagement ring but rent? Just work out how much you take home, cut it in half n take away bills n counsil tax, what is left is what you can afford.... simple, unless ur a teacher living in london, rthen you end up with a minus figure but have a hell of a time at the weekend building up a debt

Answer 8

You just need to know what your outgoings are and what your basic income is . The difference is the max that you can afford. Personally I would only go to half of that as you never know when you might be sick or an unexpected bill comes in. Better to be safe than sorry

Answer 9

No more than 25 to 30 percent of your income for housing

Answer 10

Your monthly wages should be three times more than your rent!