How Much Rent Can You Afford?

Choosing an apartment or house is a big decision.

Most people need to stay within a budget they can afford. The question for thousands of renters each month is how much rent can I afford to pay?

Nearly all landlords and property managers have requirements, but those requirements vary. Adding to the mix a co-signer adds increased confusion if one becomes necessary.

Typically, it is suggested that no more than 30% of gross household income should be spent on rent. Across the Greater Phoenix Area, income requirements range between 2 to 3 times the amount of the rent. The most common are 2, 2 1/2 and 3 times the rent for income, although rarely someone will work with 1 1/2 times the rent.

Say you want to rent an apartment for $850 per month. The landlord or property manager has an income requirement of 2 1/2 times the rent. In this case, you would multiply $850 by 2.5. Your gross income must be $2,125.00 per month in order to qualify for the unit.

 It looks like this:

$850 x 2.5 = $2,125.00 (required income)

For 3 times the rent:

$850 x 3 = $2,550 (required income)

You can calculate how much you want to spend in rent the same way. Find a number that is comfortable for you, that will leave money left over for cell phone, internet and other expenses so you have some wiggle room.

 A little room in your budget can go a long way!

 Utility expenses also need to be figured into your affordability. If all of the utilities are included, you can go higher on rent amount accordingly. If not, sticking to the 3 times the rent is a great standby rule.

If you have questions or would like assistance in your finding your next home, please get in touch! We are happy to help you get started!

Source:

http://YourRentalMatchmaker.com/

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