Determining Your Rental Budget: How Much Can You Afford?

Determining Your Rental Budget: How Much Can You Afford?

If you’re looking to rent an apartment, you first need to determine what you can afford. Your income will help you dictate the factors that go into finding the right apartment for you. Location, apartment type and size are all contributing factors. Here are a few tips for deciding how much rent you can afford when searching for a new apartment.

Establish A Budget

The most important part of determining how much rent you can afford is establishing a budget.

Many important questions need to be answered to do this correctly.
● What is your income?
● What are your outstanding debts?
● Do you anticipate a raise or bonus any time throughout the coming year?
● Will you have roommates to split the costs?

All of these questions will help you come up with a rent that is right for you. Your landlord may also ask some of these questions, as they may have requirements on how much you must make to sign a lease for an apartment.

Plan for the Miscellaneous

Your rent may be your biggest expense but you will have to factor in other costs that may come along, both related to your home and otherwise.

Consider home-related costs such as:
● Utilities
● Cable & internet
● Rental insurance
● Parking fees
● Security deposit
● Pet fee, if applicable.

Your potential landlord can sometimes offer you guidance with regard to average utility costs.

Also consider your other monthly expenses, such as:
● Car payments
● Groceries
● Auto and health insurance
● Memberships and subscriptions

The Space

When looking for the right apartment, you also have to determine how much space you will need.

● Too much space, and you’ll find yourself buying more decor and furniture to fill it.
● Too little space, and you’ll have to sell your furniture or pay a monthly fee for storage.

Consider how you will use your apartment – will you entertain guests frequently? Will a good kitchen help you save money on take-out? Knowing your lifestyle will help you identify your apartment priorities.

Location

The location of your new apartment is going to play a significant part in its price.

If you are looking to live in a larger, busier city, expect the cost of living to be higher as well.

However, you may have a little more room in your budget if you’re looking in a less populated area. Do take note of the convenience of living in a city. You may be paying a few extra dollars in rent, but you also have access to public transportation, and may be able to avoid the expenses of owning and maintaining a car.

Make sure to review the cost of living in and around the area you intend to move. Sites such as BestPlaces allow you to compare the cost of living in different cities.

Consider Your Goals

What you want to achieve will certainly dictate your budget. Are you looking to travel extensively, or do you prefer to spend your weekends in and around your home? Are you paying off your debts, or looking to live somewhere nice and carefree? Thinking about these questions will certainly help you decide what you want to spend on rent!

Not sure what you should spend? Find a financial planner or a trusted friend to help you look at your options and give you advice. It’s ultimately your home, so make sure whatever apartment you choose is one you can afford and enjoy!

Photo credit: LendingMemo.com

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