Rent Affordability Calculator
This calculator will estimate the maximum rent you can afford based on your income and expenses.
How much rent can I afford?
While there’s no one-size-fits-all answer, most guidance is to spend no more than 30 percent of your income on rent. The actual amount of rent you can afford depends on your personal income and lifestyle. Consider your monthly income and factor in your various expenses such as groceries, gas, student loans, or medical bills to estimate what you can comfortably afford.
For example, if you like to go out often and shop till you drop, then consider setting your rent budget on the lower end so you can indulge in more of your interests. But if you’re more of a homebody who doesn’t spend a lot of money on leisure, then invest more into your rent budget so you can afford a nicer apartment.
What is the 50/30/20 rule?
The 50/30/20 rule is a technique to split your income into three categories: 50 percent for essential living expenses, 30 percent for non-essential daily expenses, and 20 percent for savings and retirement. Input your information into this rent calculator to review your personalized 50/30/20 budget estimates.
What percentage of my income should go to rent?
Most landlords are looking for tenants that spend no more than 30 percent of their net income on rent. To calculate the rent that’s right for you, factor in your monthly expenses and how much money you want to save. If you exceed your overall budget, then you might need to lower the amount of rent you can realistically afford each month.
However, there are several factors to consider when calculating the rent that’s right for you: location, family size, current debt, potential utility fees, and lifestyle. Calculate all your costs beforehand so you can determine the most accurate budget.
Rent vs. Buy
It is uncommon for people to become a homeowner without renting first. Sooner or later, renters may reach a point where they are faced with the decision of continuing to rent or choosing to buy instead. Use the Buy vs. Rent Calculator to evaluate whether buying vs. renting will save more money long term. Also, the House Affordability Calculator or Mortgage Calculator can then help determine an affordable home and subsequent monthly mortgage payment.
Important Considerations When Renting
One of the most important factors regarding rent is the actual rent amount and whether or not it is affordable; there are many methods for determining what is considered affordable rent, and the calculator is simply one method that may help. Affordable is a relative term and carries a different meaning for different people. Some people think a front-end debt-to-income ratio of 25% is considered affordable, while others might think 33% of income is affordable. For more information about or to do calculations involving debt-to-income ratios, please visit the Debt-to-Income Ratio Calculator. Other considerations regarding rent generally include:
- Other Costs—Aside from recurring rent payments, there are other costs associated with renting. Upfront costs such as a security deposit, application fee, insurance, and pet deposit can be mandatory. Recurring utility costs such as internet, water, gas, and electricity will need to be accounted for also (some may already be included in rent). In addition, most renters will need to furnish their new rental property.
- Location—Generally, people like to live close to where they work and to their family and friends. Renters should also consider the location of their rented property in relation to places they frequent and their interests. For example, a renter who likes to hike may want to consider a property that is close to a hiking trail, while the renter who enjoys a daily coffee may want to live close to a coffee shop. Also, there may be other location preferences, such as living in a particular school district, a location with low crime rates, or having access to public transportation.
- Quality—The quality of the rented property should also be considered. For most rental properties, it is possible to research the year the property was built or when it was renovated. In most cases, renters can view the rental property before actually renting to ensure it is of good quality. In addition, certain rental properties may come with amenities such as a pool, gym, doorman, or laundry facility. All appliances should be present and in working condition. For apartments or condos, online resources can provide reviews from previous tenants.
- Size—There are considerations such as number of bedrooms, number of bathrooms, and square footage. In addition, renters should ensure there are enough cabinet and closet spaces for their belongings, as well as enough living space for their pets.
- Landlord—A landlord can make or break a renting experience. Because a rental property is still owned by a landlord, it is possible for them to place restrictions on the tenant, such as requiring that they maintain a certain noise level and grass length, not allowing them to paint or put nails in the walls, and enforcing rules