When looking for an apartment, it is important to know exactly how much rent you can afford based on your annual income. Most places will not rent to you if their rent is higher than a certain percentage of what you make. What exactly is that percentage, and how do you find out the max monthly rent you can afford? Read on for simple instructions for how to calculate!
Essentially, most landlords want you to be earning three times the amount of their yearly rental cost. In other words, your yearly rent will be about 30% of your yearly income. To see what your max budget is, you need to find out how much rent 30% of your income can afford you each month. There are two ways you can get the same answer.
- Calculate how much 30% of your annual income is, then divide that by 12 (12 months in a year).
- Take your annual income and just divide it by 40.
Be sure to make these calculations using your annual income AFTER taxes. The amount you get paid after taxes is what is going to be paying your rent throughout the year, so your tax refund cannot be relied on.
The amount you can afford in monthly rent does not take into consideration other bills and expenses you may have in addition to your rent. Be sure to calculate how much these additions would cost and make sure you have enough left over each month to save! Fortunately, at Shaker Run Apartments, your rent includes access to our state-of-the-art fitness center, snow removal, trash removal, and on-site maintenance.
See? Calculating how much rent you can afford is simple and can be done in a few easy steps. If you’re interested in renting one of our apartments, contact us today to set up a tour!