Can You Afford Your Apartment?

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Are you asking yourself, 'Can I afford my rent?' Start here.

Searching for an apartment can be a daunting task, but when you consider the financial end of it, that feeling can get worse, making you as yourself, can I afford my rent? How can you figure out what rent rate won’t break the bank for you in the long run? Don’t get too overwhelmed. It’s easy to find out what is a good price point for you, and how to find a fantastic apartment in your ideal price range.

Know How Much You Make

Figuring out what rent range works for you starts with figuring out how much you make. This can be easily tracked by adding up all of your paychecks for the year, and coming up with a monthly average income. If you work on salary wages, then this process is even easier, since you have a set amount of income every year. However, be sure to use your take-home (or net) pay to calculate your income — not your gross income, which doesn’t consider taxes.

Typically a good rent price will be about about a third of your monthly income, but this also depends on the cost of living in your area. It’s ideal to keep your housing costs below 30% of your income.

If you’re a college student with no income, you’ll need to have this discussion with your parents. Ask how much they’re willing to pay and what they can afford. Let them know that they’ll likely need to co-sign the lease, so landlords can ensure that the payments are secure.

Figure Out Any Additional Living Expenses

Unfortunately, rent isn’t the only expense that comes with living in an apartment. You also have to take into account the number of other expenses that come into play, including utilities like electric, water, internet, cable, and trash, and then your personal bills, including a cell phone payment, grocery budget, car and insurance payment, gas expenses, and similar monthly expenditures. Of course, there are also other payments that might surface — such as parking or a monthly pet fee — which vary from apartment to apartment. Some properties include these extra costs in the rent, while others don’t. Take the time to do the math and figure out if you’re truly getting a good deal. Make sure you add up these costs before deciding on whether or not an apartment fits into your budget.

If you need help determining your budget, try our rent affordability calculator.

Have Your Standards & Stick to Them…

If you find that your rent budget is much lower than you’d originally anticipated, then make adjustments accordingly. It’s the responsible thing to do.

But make sure that you don’t budge on some things. Just because you can only pay $850 for an apartment instead of $1,100 in rent doesn’t mean you have to live in a hovel or share a room with cockroaches. Just keep searching for that perfect apartment within your price range.

What About Buying?

Buying a home is a different ballgame than renting an apartment. Your budget might be too tight to purchase a house with a down payment coming from your own cash. But if you’re truly tired of renting, perhaps you might look at non-traditional financing methods for a new home. Maybe a friends or family loan? And even if you have massive student loan debt, you still might have a chance to purchase a home, if you get creative with financing. These are all options if you’re tired of renting.

…But Know When to Compromise, Too

Of course, don’t have unrealistic expectations either. You might not have to live in a cardboard box for your budget rent, but you can’t expect to live in a palace for pennies either.

If you’re having trouble wrapping your head around what you should prioritize, make a list of things you can’t picture yourself compromising on. Then make a list of things you’d like to have in your new apartment, but are willing to give up for the sake of price. After that, make a list of things you don’t really care about. Refer to this list throughout your search process and move things around as needed. Write your maximum budget at the very top of the list, and make it your key focus throughout your apartment search.

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