If this is your first time to look for houses for rent, budget will surely play a big role in your choice. Prior to starting the search, it is recommended that you determine what type of features you wish the apartment to have and the amount of rent that you can comfortably spend every month. Once you have established your budget, you will be able to streamline the search by narrowing your focus to studio apartments or 2 bedroom apartments for rent that satisfy your needs and meet your budget as well.
Signing a rental lease is a big financial commitment. That is why you must ensure that you will be able to afford it for a long period of time. Because of this, establishing a rent budget beforehand is a must if you wish to avoid ruining your finances.
Establishing Rent Budget
Your rent budget will be dependent on two important factors– the amount of money that you earn and that amount of money that you spend. Because of this, your first step must be to list down your income and expenses on a monthly basis. To make the process a lot easier, it is best that you take advantage of the spreadsheets or various apps in noting down these details
1. List your income.
In your income column, list every source of income that you have—regardless if it’s from a stable job, side jobs or business. When listing your income, it is recommended that you focus only on your expendable income or the amount income that will be left after paying taxes. If you wish to make the process a lot easier, you can try taking a look at your pay slip, previous income tax statements as well as other financial records that you may have.
2. List your expenses.
Now, here comes the fun part—list all of your expenses. The list of expenses must be divided into two categories– mandatory and optional. In this way, you will be able to see what your priorities are and what expenses you can give up in the event that you wish to spend more on your apartment budget.
One good way to monitor your expenses is to take a look at your credit card statements and shopping receipts. In addition to that, it is also recommended that you determine where you have spent your ATM and cash withdrawals.
Calculating the budget.
After completing the two lists, it is time for you to determine the total of both lists and take a look at how much will be left after deducting your total expenses from you total income. Plan how much you can be able to allot for an apartment rent like a two bedroom apartment rental depending on how much money will be left from your income. Most properties will require that you make 3 times the rent amount or that your housing cost is less than 33% of your monthly income.
Plan for utilities and deposits.
Aside from the monthly rent, you will also have to plan for paying utilities, cable and internet. You can call the local utility company to determine average costs in the area, or visit websites like www.whitefence.com for national averages. Don’t forget the one time costs that you’ll need on hand to cover moving expenses, security deposits, utility set up fees, and perhaps some decorating.
After establishing the budget for rent, your next step is to formulate the questions that you wish to ask the landlord. After that, you can get started on your search and finding your first home away from home.
Ron Leyba works with Brookfield Management
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