How much money from your income should go to rent?

Question

Also should you go by gross income or net income. I would think net income because gross isn't what you take home. Any percentage ideas? I hope to graduate university by 24 and look for a place to rent afterwards but I have no idea how much should go to rent. I hear these days rent is expensive as h**l and many can't afford it right out of university. My major is accounting by the way.

Answer 1

I heard that it shouldn't be more than 1/3 of your take home. Mine is over half.

Answer 2

The answer depends on you and your life style. 10 - 50% ?  When I got out of school, I rented a dump and saved for a down payment on a home.  

It worked because I wasn't home much anyway and some of my friends spent a lot on nice pads where I could hang out.

Do some accounting on a budget, and assign priorities to what is important to you.  Food, Roof, Utilities, Transport, Savings, Entertainment, etc.

Answer 3

I know they always say 1/4 of your income (net) should go toward rent but these days, it's more like 1/3 of your take home pay (and I've done 1/2 of my take home for rent just because I wanted to live in this very expensive place, just for a little while--I was young so could scrimp on all other spending).  That usually doesn't include (at least where I live) utilities, phone, water, garbage pickup.

Yeh, rents are expensive but many young people make it work by sharing an apartment with roommates which will lower your monthly rent and usually any deposits and advance monies you are required to pay.  I'd say, budget yourself for 1/3 of your take home for rent but if you can get a lower rent, save the difference so you can move up to something better sooner.  It'll also give you a chance to look around to determine what area you'd like to settle down in without being rushed.  And many many times news of gem apartments (condos, houses) either just put on the market or that will soon be on the market are communicated via word of mouth (a friend, a relative, etc.) and you can jump at that opportunity.  I still have some friends now approaching 50 y.o. who still live with 5 or 6 roommates and yet can't save a penny (really lousy money managers).