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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.As a renter, knowing how much rent you can afford is essential before you start your rental home search. The best way to know exactly how much rent you can afford is by closely examining your household budget. By getting accurate income and expense numbers, you can more confidently search for a rental home that fits comfortably within your lifestyle and paycheck.

Nonetheless, different property management companies provide various sorts and varieties of rental properties, so it’s important to be flexible and keep your options available during your rental home search.

Assess your monthly income and expenses

In general, rental experts propose that you should be spending no more than 30% of your gross income on rent each year. That is your gross income before taxes and other expenses, not your take-home pay. For illustration, if you earn $40,000 annually from all sources of income, your optimal maximum rent amount is $1,000 monthly.

Unquestionably, this is a little oversimplified method for figuring out how much rent you can afford. There are often other expenses that need to keep in mind.

For example, if you have significant debt or make large monthly payments that you cannot adjust or cut, these expenses need to be included in your calculations. Additionally, your budget should include a detailed list of two types of expenses: fixed and variable. Food, transportation, medicine, utilities, and other basic expenses should be included to the “fixed expenditures” section. Entertainment, vacation trips, and so on would be listed as “variable” (a.k.a. optional).

Once you’ve determined how much you’re spending and where, you can more quickly come to a realistic estimate of how much rent you can actually afford. Adhering to the 30% rule in areas with high rent may be challenging. This may need adjusting some other expenditures to better afford your rent.

How to approach landlords or property managers

Unquestionably, how much you assume you can afford to pay is only one-half of the picture. When applying for a rental home, different property management companies and landlords may have differing views on what makes an acceptable tenant. Even if you can demonstrate that you can afford the advertised rental rate, some property managers or landlords may be reluctant to offer you a lease for a variety of factors.

Despite your greatest efforts, there may be occasions where the rental home you desire is leased to someone else. In such circumstances, it’s critical to stay positive and keep trying to manage or improve your financial situation. Remember that just because you didn’t receive a specific rental home doesn’t imply that you’re not a strong candidate for another property. As long as you’re applying for rental homes within your affordability range, the correct one will come along.

Are you seeking a new rental property in Henrico County or nearby? Real Property Management Richmond Metro can assist! Check our available listings, and please contact us if you have any questions.

 

Originally Published on Jan 10, 2020

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