Property Management Blog

Tuesday Tenant Tip - How Much Rent Can I Afford?

System - Monday, May 14, 2018
Property Management Blog

Do you know how much you can easily afford to spend on rent? Many Utah rental searches start with a realization that you want to live in a particular area or amenity in your next apartment. But not many people consider how much they can actually afford for rent?

A general rule for rent, or even mortgage payment, is that it should not exceed 30% of your monthly income. So, if you earn $3,000 a month, you should look for a rental that is $1,000 or less a month (excluding utilities).

But why? If you make $3,000 a month, why can't you spend $2,000 a month on rent. Well, you can, it just isn't advisable. What you want to take into consideration is, your NET income, your recurring expenses, and your long-term plans. Make a complete list of your monthly expenses, these would include grocery bills, utilities, cell phone and/or internet, insurance (car, rental & health) car payments, gas expenses, memberships, loan payments (student loans, credit cards, etc.) They tend to add up fast, and when you write them down it tends to make it a little more evident as to what you can afford. But don't forget about emergencies or incidentals? Do you have a little wiggle room in your budget if you get sick and have to miss work?

Don't forget that in addition to rent, you most likely will be required to pay a security deposit, and in some instances the last months rent. If you are wanting to 'upgrade' your apartment, these amounts will almost always increase as well.

Try to find a balance. Rent shouldn't completely interfere with your lifestyle. Will you be able to make the rent payment each month, in addition to everything else? If you opt to go for a higher rent, will it impact your day to day activities? It is better to figure these things out prior to signing a lease, than end up in something you can't afford and end up being evicted and/or sent to collections.