How much can I AFFORD to pay in rent?
To find out where your housing budget should be, there is a pretty simple formula.
Write down all your expenses ( car payments, phone bill, TV subscriptions, insurance etc.). Then, figure out your estimated monthly income (after taxes). Your rent payment really shouldn’t be any more than 30% of your total income. There can be a tiny bit of wiggle room based on your other expenses, but in a general sense, 30% is a good place to be.
For example:
If I make $2,000 a month, 30% of my monthly income is $600. That is where I should start my budget for my apartment search. ( keeping in mind utilities costs on top of that so I may want to look a little less, around the $550/month mark)
This is a great chance to practice those math skills!
To find the percentage just solve for B { B/(income) = 30/100}
For my example:
Income= $2,000.
So I do 2000 x 30= 60,000
Then I take 60,000 and divide it by 100 = 600
So, let's put this into play. I make $2000/month and
$600/month for rent
$100 Utilities
$350 Car/Insurance
$150 phone/gas
That puts me at $1200 spending a month and $800 left over for food & extras.
Of course, everyone’s spending needs will be different, but this is visual to see how much you can afford.
Keep in mind that most places you will have to pay a deposit and first month’s rent before moving in. So, I would need about $1200 upfront before moving in. Make sure you're saving a little bit of money every month to get to this goal.
If this is a little too overwhelming, you can always check out this online rent calculator here >>>> >>>https://www.rentcafe.com/rent-affordability-calculator/
As always, please give IPM Minot Rentals a call if you have any questions about rental properties, what the application is like or what available for you. We'd love to get you into a new place soon!
