How much can I afford to pay in in rent?

Question

I get £8500/year after income tax and NI, which is just over £700/month. After food estimates, gas/electric estimates, mobile phone contract, and Internet I should have around £500/month. What other costs do I need to consider? What kind of place can I afford? There are decent enough places near me for around £300-400/month.

I don't know a lot about this stuff. I don't intend to move at the moment, but could do with the knowledge of what possibilities there are incase I have to.

Answer 1

how much is that in us. dollars lol..

Answer 2

I would say don't spend more than 25% to 30% of your take home pay on housing.  

So that means you need to find a place for only 175 to 210 per month.  If you can't get a place on your own for that low, then I would seriously consider renting an apartment or house with a couple friends / roommates and splitting the rent.  This is what I did when I was younger when I made less money and could not afford a decent place on my own.

If you are willing to live with roommates or housemates, then you can get a much better place in a better location with more sq ft than you could afford on your own.

Answer 3

Most financial advisors say to not spend more than 20 to 25% of your take-home pay on rent or mortgage.

Answer 4

My suggestion would be-- take your monthly income and divide it by 5. Do not do any more than that number for your housing expense. Alot of budget clinics will tell you 20-25% of monthly income is a good, solid number.

I only spend 10% of my income on housing because I spend 30% on my vehicle. Talk about how screwed up my priorities are! Don't be like me! No more than 20% for vehicle, 20-25% for housing.

Hope this helps. :)