Generally speaking, rental experts argue that you must spend not more than 30% of your gross income on rent annually. 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. Indeed, this is a slightly overgeneralized system geared to pinpoint how much rent you can afford. There are normally other expenses that need to be considered as well.
For instance, if you have lots of debts 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 must take in an in-depth checklist 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 identify how much you’re spending, you can more certainly come to a realistic estimate of how much rent you can afford. In cities where rents are very high, it may be difficult to stick to the 30% rule. This may involve minimizing some of your other expenses so you can better afford your rent.
Of course, how much you think you can afford to pay is only one half of the equation. When searching for a rental home, some property management companies and landlords may have different ideas about what comprises a desirable tenant. Even if you can illustrate 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 frank with the property manager or landlord and provide all requested information promptly and in full. It doesn’t hurt to make sure that you arrive punctually to all meetings and to dress up a little, too. These may look like little things, but a good first impression could aid you to urge a property manager that you will be a responsible and conscientious tenant.
Even with your best efforts, the rental house you want could be offered to someone else. If that arises, try to stay positive and to do what you can to maintain or improve your financial situation. You may not comprehend why the property manager or landlord didn’t decide on 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, kindly check out our available listings and contact us if you find something that piques your interest.