How much rent can I afford?

Question

So I am considering moving to a really nice neighborhood and would like to know if I can afford it. The average rent is 1200 a month. I bring home after taxes about 2700 a month sometimes more. Is that a smart thing to do or not. Utilities are included.

Answer 1

Usually the rule of thumb is 30% of your net income for housing. Be it a mortgage or rent. Most people can comfortably afford this much without hurting when the car breaks down or if they are hospitalized for a week or two. It also allows for savings and rainy day funds without leaving paying rent as an option over eating.

Answer 2

If a landlord was willing to rent to you at the debt to income ratio, you'd find the payment very uncomfortable.  Don't forget to consider telephone/cell phone costs, insurance, groceries, car or transportation expenses...it's just too much.  A more realistic rent for your income would be about $600 to $700.

Answer 3

This is not really a good idea. You never want your housing cost to be more than 1/3 of your income or it can be very difficult to pay.

With yhour income I would not get a place for more than $900/ mo

Answer 4

Many apts require 2 to 3 times the rent for your monthly income. With those number you are just over 2 times.

You need to look at other expense. car payment, credit card, phone, insurance, etc and make the decision.

To me you are cutting it close, but it depends on other expenses and whether your job has room for salary increases.

Answer 5

30% of Gross income should be housing and utilities.  I'd get a roommate and save $$ to pay off existing debt.  Do you have a rainy day savings account (Money Market) with at least $7,000 in it?  Are you contributing enough for retirement (401K)?  Pay off credit cards first if you have them.  I'd say you are at your maximum allowance for rent.  Be careful.

Answer 6

your spending half of your income on housing (almost) do you have a car payment? are you a big spender??? is it worth it??? sit down and figure out all your other bills.  can you get a roommate? it's possible but you need to be on a strict budget