How to Determine How Much You Can Pay for Rent

You have finally made a decision to move out from Mom and Dad and get a place of your own. Before you do that you really need to make certain you can afford to do so. Before you even begin to look, do a little exercise that will tell you what you can afford and then your will be armed and ready to look for that new place.

• One common thing you will hear is that you can spend 20-30 percent of your gross salary on rent. That is not correct. You can spend 20 percent of your net income on rent if you still want to eat and have any money possible for emergencies, which you will have. For example, if your earn $2000 monthly and take home $1600 after taxes you can afford $320 for rent. If that limits your choices, then start looking in another direction. Look smaller or at a different location.


• If you determine that what you want is out of your reach, consider a roommate to share expenses with. There are always people looking to split the rent with someone else to become independent. If it doesn’t work out, suffer through until you get another raise and then move elsewhere.


• If you can’t afford what the landlord is asking, ask if they will take less. That may not happen, but everything is possible. He/she may have had it up for a while and are anxious to rent now. Dress the part when looking as it does make a difference. Landlords want decent people in their rentals that they think will take care of the property.


• Discuss the security deposit right up front. Many times, if they like you they will reduce it or let you pay over a period of time. Generally, the required amount is first and last months rent so make sure you have enough when you are looking and speaking with landlords.


• Finally, make sure you have not forgotten that everything else in your life still has to be paid. If you have car payments, credit cards, loans, food and anything else that you pay for on a monthly basis, it won’t go away just cause you have a new place to live. Add it all up along with your new rent payment and make certain you can pay for all of it.