Prior to embarking on your rental property search, it is crucial for renters to know how much rent they can afford. To accurately determine how much rent you can afford, it is advisable to thoroughly examine your household budget. By obtaining accurate income and expense numbers, you may increase your confidence in searching for a rental home that aligns well with your lifestyle and finances.
However, different property management companies offer various kinds and variations of rental properties, so it’s advisable to maintain flexibility and keep your choices open during your rental home search.
Assess your monthly income and expenses
In general, rental experts recommend that you should be spending no more than 30% of your gross income on rent yearly. That represents your gross income before taxes and other deductions, not your take-home pay. Given an annual income of $40,000 from all sources of income, the optimal maximum rent amount would be $1,000 per month.
Admittedly, this is a really simplistic way to figure out how much rent you can afford. Additionally, there are often other expenses that must be considered.
For example, if you have a substantial amount of debt or make large monthly payments that are beyond your control or cannot be decreased, these expenses should be included in your calculations. Furthermore, your budget should include a detailed list of two types of expenses: fixed and variable. It is advisable to include food, transportation, medicine, utilities, and other essential expenditures in the “fixed expenses” category. The categories of entertainment, vacation travel, and similar items would be classified as a “variable” (a.k.a. optional).
By having knowledge of how much you’re spending and where, you can more easily come to a realistic estimate of how much rent you can actually afford. Adhering to the 30% rule in areas with high rent can provide challenges. Modifying some other expenditures may be necessary to better afford your rent.
How to approach landlords or property managers
Naturally, how much you think you can afford to pay is just one aspect of the situation. When applying for a rental home, various property management companies and landlords may have divergent standards regarding the criteria for a prospective tenant. Although you can demonstrate that you can afford the advertised rental rate, some property managers or landlords may be hesitant to offer you a lease for various reasons.
Notwithstanding your utmost endeavors, there may arise situations when the rental home you desire is leased to someone else. When faced with such circumstances, it is crucial to stay positive and continue to manage or improve your financial situation. Never assume that your inability to secure a certain rental home indicates that you are not a strong candidate for another property. As long as you’re applying for rental homes within your affordability range, the appropriate one will come along.
Are you now seeking a new rental property in Perrysburg or in close proximity? Real Property Management Clarity Team is happy to assist! Discover our available listings and do not hesitate to contact us if you have any inquiries.
Originally Published on Jan 10, 2020
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