Loading ...Budgeting for Rent – As Percentage of Income
Most experts recommend not spending more then 35% of your income. Many landlords will take your gross annual income and divide it by 35-40 to feel comfortable taking you on as a tenant. For example, a $35,000 a year income earner should budget $875 – $1,000 per month for their rent.
GrandCentralApartments.com created a rent calculator to make budgeting for your rent simple.
Keep in mind your responsibility for utilities. Obviously the best case scenario is finding an apartment where the rent includes all utilities. If not, be sure to get an idea of what your heating bill, electric, phone, cable and internet expenses will be and factor that into your budget as well. Your landlord should be able to help you estimate your utilities.
A recent article in the Boston Globe reported that the amount of low-income renters that spend upwards of 50% of their income on rent increased dramatically over the last 8 years (almost doubled).
Low income refers to people making no less then the minimum wage and no more then 120% of the median income for an area.
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