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House Hunting Tips: Know What You Can Afford

A wallet containing cash positioned next to a pen on a piece of paper, representing budgeting.Knowing how much rent you can afford is crucial for renters before they begin their hunt for a rental property. The best approach to determine exactly how much rent you can afford is by meticulously examining your household budget. Accurate income and expense numbers will help you more boldly search for a rental home that comfortably suits your needs and way of life.

Still, different property management companies present distinct kinds and variations of rental properties. Thus, it’s advisable to be adaptable and keep your options open during your rental home search.

Assess your monthly income and expenses

As a rule, rental experts suggest that you should be spending no more than 30% of your gross income on rent every year. That is your gross income before taxes and other deductions, not your take-home pay. For example, if you make $40,000 per year from all sources of income, your ideal maximum rent amount is $1,000 per month.

Undoubtedly, this is a really simple method for figuring out how much rent you can afford. There are often other expenses that must be taken into account.

For example, if you have loads of debt or make large monthly payments that you cannot adjust or reduce, these expenses should be included in your calculations. On top of that, your budget needs to be a detailed list of two types of expenses: fixed and variable. Add to the “fixed expenses” category food, transportation, medicine, utilities, and other essential costs. Entertainment, vacation trips, and so on would fall into the “variable” (a.k.a. optional) category.

Once you’ve calculated how much you’re spending and where, you can more readily arrive at a reasonable estimate of how much rent you can actually afford. Following the 30% rule in areas with high rent can be challenging. To better afford your rent, you could have to change some other spending.

How to approach landlords or property managers

Surely, how much you think you can afford to pay is only one-half of the equation. When applying for a rental home, different property management companies and landlords may have varied opinions about what makes a good tenant. Some property managers or landlords may be reluctant to offer you a lease for various reasons, even if you can demonstrate that you can afford the advertised rental rate.

Even with your best efforts, occasionally, the rental home you desire may be leased to someone else. Under such circumstances, it’s imperative to stay positive and continue to manage or improve your financial situation. Don’t forget that not getting a certain rental home doesn’t necessarily signify you’re not a strong candidate for another property. As long as you’re applying for rental homes within your affordability range, the best one will come along.

Are you searching for a new rental house in Cranston or nearby? Real Property Management Providence will be helpful! View our available listings and feel free to get in touch with any inquiries.

 

Originally Published on Jan 10, 2020

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