When you’re searching for an apartment or home to rent, it is a good idea to answer the question, “How much rent can I really afford?” first. With rent prices going up in recent months, especially in hot housing markets, now is the time to sit down and go over your budget.
1. Look for Rent Prices That Are 30% or Less Than Your Monthly Household Income
A good rule of thumb is to make 3 times your rent payment in gross monthly income. Many owners and property management companies will require proof of this to ensure that you don’t default on monthly rent payments.
So, if the monthly rent on a condo you are looking at renting is $1000, you’ll want your income to be $3000 gross (not net, or take home pay). This gives you the best chance of being able to afford the monthly rent and not getting evicted.
2. Try to Save at Least 3 Months Rent Before Going Apartment Shopping
While conventional wisdom is to save 6 months rent, this is out of the realm of possibility for most people. Saving 3 months rent will help you cover the cost of the security deposit, which is usually the same as a month’s worth of rent.
Also, some property owners may require a security deposit plus 1st month’s rent all at once. This savings will help you afford the large payment, and give you a little cushion in case you fall short on a rent payment down the road.
3. Go Over Your Household’s Monthly Budget
Print out 1 month’s worth of your bank statement and highlight items to add to your budget. Are there areas that you can cut costs?
Can you make coffee at home before leaving for work instead of buying it on the way? Can you cancel that gym membership you’ve never used? Or cut the meat out of your nightly dinner 2 nights a week?
Be creative!
4. Don’t Forget to Save Money on Things You’ll Need for Your Apartment
If you’re moving out of your parents home or college dorm, you may not realize the sheer volume of things you’ll need for your kitchen and living areas. New couches, pots/pans, towels, and dishes can add up fast!
Make sure you have enough money saved to account for the things you need the most, and you can always add more tables/pieces of furniture down the road.
Ready to rent a fabulous home, apartment, townhome, condo, or office space in Utah? Check our rentals page for Spectrum’s current offerings!