Moving to a new city, neighborhood, or apartment building is an exciting time. It can feel like you're just beginning a new phase of your life and can make you feel really accomplished.
However, as you hunt for new homes and apartments, you need to make sure that you're not stretching your budget too thin. Otherwise, you could run into issues when it's time to pay the bills!
If you need help figuring out how to afford rent when choosing a new apartment, you're not alone. This guide helps you figure out how much rent you can afford to pay when renting an apartment or house. Let's dive in!
How Much Rent Can I Pay With My Income?
As you hunt for "best apartments near me" online, make sure to calculate how much of your income can actually go towards rent. Typically, this amount is set at 30% of your monthly earnings.
The easiest way to calculate this amount is to multiply your monthly income by 0.30. The resulting number is how much you can afford to spend on rent each month. Alternatively, you can divide your annual income by 40 to get the same number.
However, while the 30% rule does work in most cases, it doesn't account for debt. If you have any outstanding debt on your hands, it can be tough to afford to pay that amount of rent.
Another rule that you can use to make sure you're spending the right amount on rent is something called the 43% rule. This rule says that your rent and any debt you have should equal no more than 43% of your total income each month.
Using this rule, the amount of rent that you can afford is slightly lower than the amount you can afford under the 30% rule. It can be a slightly more practical way of counting how much rent you can afford if you have outstanding car payments, student loans, or credit card debts.
It's important to note that while this is the ideal amount to spend on rent, many people in the United States don't follow this rule. The result is that they end up living paycheck to paycheck and struggling to make ends meet. Following these tips for budgeting for rent can help you avoid this situation!
What Other Costs Should I Consider?
As you start budgeting for rent, it's important to remember that the rent itself isn't the only fee you'll pay. Planning a move involves several other fees that can add up quickly. Make sure you're keeping all these additional costs in mind so that there are no surprises when looking for luxury apartments.
Security Deposits
Almost all rental properties will require a security deposit when you move into the area. This covers any damage to the rental property that occurs while you are in the building and any move-out or move-in cleaning costs. At the end of your lease, you'll receive the deposit back, less any damage, or cleaning fees that you incurred.
Move-in Fees
While not all apartment buildings require this, some rental properties will charge you a move-in fee. These fees are small but are non-refundable and are due at the time that you move into your apartment.
First or Last Months Rent
Some landlords, especially those who have luxury rental properties, charge your last month's rent. This is to protect against tenants who leave without paying those fees. Typically, this rent is due at the same time as your first month's rent and your security deposit, which can make things a tight squeeze for your budget.
Utilities
While it would be great if all you had to worry about paying was your rent, you'll still need to pay for utilities. The exact utilities you have to pay will depend on where you rent. Plan to pay for garbage, internet, water, gas, heat, and electricity in your new apartment.
Moving Costs
As you plan how much rent you can afford, it's important to keep in mind any moving costs you'll be incurring. You want to think about paying for movers, storage options, and car rentals that will be involved in your move.
What if I Can't Find Anything in My Budget?
Sometimes, renting an apartment within your budget can seem impossible. You simply might not be able to find anything in your ideal location for a price that works for you. If this is the case, there are a few things you can do.
Expand the Search Radius
Of course, you don't want to look in a completely different city, but expanding your search radius a little bit can help you get a more reasonable price. Check other nearby neighborhoods that still won't be too far away from your job. Doing so can mean finding you an affordable place to rent, even if it's a little farther away.
Find a Roommate
Sure, living alone sounds great. However, when you split the rent with a roommate, you can save a huge amount of money. Plus, the two of you can split additional utility costs that can make your rent even higher.
Make Renting an Apartment Affordable
With this guide, you know how much rent you can actually afford when apartment hunting. This will help reduce stress and ensure that you're living in an affordable and practical location.
Are you trying to find the perfect apartment near you? If so, be sure to take a look at the stunning apartments at Park Fountains at Preston Hollow. When you're ready, schedule a tour with us to find your next dream home!