Before deciding on an apartment or a new city to move to, ask yourself: “How much rent can I afford?”
If you are new to renting, you want to familiarize yourself with the 30% rule, and the true cost of renting. The most common tip for renting is to allocate 30% of your gross monthly income on rent. The below chart will give you a basic guideline of how much you should plan on spending.
This 30% number could change depending on your saving goals. If you are looking to save more money, shoot for a rent price that is lower than 30%. If you are paying the premium to live in a more expensive city and early in your career, prepare to spend a bit more than 30%. If you need additional help with figuring out how much rent you can afford in your city, try using a rent calculator.
What is the true cost of renting? Additional costs to consider.
Looking beyond the monthly rent price, there are some additional costs associated with the new home that you should be ready for.
- Deposit: One month’s rent is a standard deposit request, but don’t be surprised if your landlord asks for first and last month’s rent along with a security deposit. Remember, you should be getting this back as long as you keep your place up-to-par, but be prepared for this initial payment.
- Pet Fees: Be prepared to pay an additional price when moving into a rental with your pet. Many properties will require monthly pet rent, a pet deposit, or even a non-refundable fee.
- Application Fees: Don’t apply for an apartment unless you are sure of it. Application fees are pretty standard for rentals. Fees range all over the place, and can be per application, per person, or waived if you’re lucky. By looking at the application fees for 15,000 properties, this graph should give you an idea of what you might be paying.
- Moving Fees: This isn’t directly tied to the rental property, but many people forget that moving can be costly. Professional movers can charge up to hundreds of dollars, and getting new furniture can add up quick.
Beyond the standard moving and move-in fees, be aware of the hidden benefits and costs.
- Commute: One in 36 commuters travel more than 90 minutes one way to get to work, and these super commuters are on the rise. Finding a home close to work can save your time and your wallet.
- Transportation: If you rely on public transit to get to-and-from, or if you just want to have additional options, living near public transportation can be a great added perk.
- Parking: Depending on where you live, parking could be a non-factor. If you are in a bigger city, a rental with a designated parking spot or garage is a huge plus. Paying for parking can get very expensive, so having this included in your rent is an awesome benefit.
- Amenities: What may just seem like icing on the cake could actually save you money in the long run. Especially if an awesome gym or pool allows you to cancel things like gym/country club memberships.
This is a collaborated post.