How to Determine How Much You Can Pay in Rent
It takes just a few simple calculations to determine how much you can afford to pay in rent.
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Things You'll Need
- Financial Calculator
- Real Estate Attorneys
- Notebooks
- Personal Organizers
- Writing Pens
Instructions
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1
Calculate your total monthly household net income after taxes, including your spouse's income if you're married, and any child-support or alimony payments.
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2
Multiply your total monthly net income by .30. This number will give you a general idea of the amount of rent you can afford to pay.
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3
Add up all of your other monthly expenses, such as car and credit card payments. Include estimates for food, entertainment and transportation.
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4
Add together the rent amount from step 2 and the amount from step 3. Make sure this total does not exceed your monthly income. If it does, adjust the amount of rent you can afford.
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Tips & Warnings
Housing in some areas costs much more, so set your target accordingly when you plan a move to another city or state.
Landlords look at the ratio of your debts (including estimated rent payments) to your income in considering your rental application - but your credit history is another important factor.
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Comments
View all 8 Comments-
Great Tips. Useful for independant landlords making desicions on who to rent to.
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noname1000
Sep 27, 2009
I agree on the utilities factor. I just moved because my utilities in an older, larger home were almost as much as the rent and I couldn't afford it. -
Leah Waddill
Jan 29, 2009
Good advice, 5*
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tv1975
Jan 22, 2009
Great tips! %*****
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Sep 27, 2006
If you calculate all your expenses and don't have any money left over, consider changing either your rent expectation or other expenses. What will you do if your car needs repair, or if you fall ill? You need to have emergency money, and let's face it, it's very easy to forget to add an expense to the list when creating a budget. Give yourself some wiggle room on the bottom line price.
