# Rent Calculator: How Much Can I Afford?

Trying to rent an apartment when you don't know how much you can afford is like trying to run a race with no designated finish line. It's exhausting, chaotic, and potentially dangerous! Before you start pursuing apartments you can't afford or wondering why you're not getting approved, sit down and crunch the numbers. Here are three ways you can go about calculating exactly how much rent you can comfortably afford to pay each month given your current income. Trust us - this is the first step to finding the best apartment for you!

## 3 Ways to Calculate a Comfortable Rent Price

### 1. Try the rent rule of thumb.

The general rule of thumb is to budget 30% of your gross monthly income for rent. (Hint: Your gross income is how much you make before taxes.) If you make \$40,000 a year, divide this by 12 and you have your gross monthly income (3,333). Take 30% of 3,333 and you're left with a little under \$1,000.

### 2. Factor in your debt.

Keep in mind that the 30% rule is a guideline, not a law, and it doesn't take into account a host of other personal financial factors. Do you have student loans? A high car payment? Substantial credit card debt?

If you're carrying a decent amount of debt, the 43% rule may be more fitting for your financial situation. With the 43% rule, your monthly housing cost plus all monthly debt payments do not exceed 43% of your monthly income.

Here's how to figure out if this rule applies to you. Remember that number you came up with from step 1? Add that number to your monthly debt payments. Sticking with our previous example of a gross monthly income of \$3,333, let's say you owe \$100/month on your car loan and \$400 month on your student loan.

\$100 + \$400 + \$1,000 = \$1,500

Is \$1,500 more than 43% of \$3,333? Only by \$67. A renter in this situation may be able to afford an apartment that's \$1,500/month.

### 3. Consider your low, middle, and high end options.

• What's 15% of your gross monthly income? Consider this your "low end" option. Spending 15% of your gross income on rent can help you save money, eat out, travel, and enjoy activities outside your apartment. If you already know you rarely spend time at home, this might be the best option for you. If you make \$40,000/year, your suggested monthly rent would be about \$500 at this rate.
• What's 25% of your gross monthly income? This is your "middle of the pack" option. You want some money left over each month, but you also want to live in an apartment that meets your basic needs. You may enjoy spending time outside of your apartment, but you also love hanging out in the comfort of your own home! If you make \$40,000/year, your suggested monthly rent would be about \$833 at this rate.
• What's 35% of your gross monthly income? This is likely your luxury option! If having the nicest apartment and all of the amenities that come with it is important to you, you may fall into this category. Be warned, though. Spending 35% or more of your monthly income could leave you on a steady diet of ramen noodles and peanut butter sandwiches. If you make \$40,000/year, your suggested monthly rent would be about \$1,166 at this rate.

## And If You Can't Wrangle Your Rent Costs?

What if your housing costs exceed your budgeted amount any way you calculate it? This can be an extremely tough realization. You may be trying to rent an apartment in New York or an apartment in San Francisco, two very expensive cities. Or, you could be out on your own for the first time and trying to get by on minimum wage.

If your budget is tight, consider a few of the following tips that could help you find an affordable apartment to rent.

• Split rent with a roommate. Splitting the cost of a 2-bedroom apartment is cheaper than paying for a 1-bedroom apartment on your own. If you have a close friend who is also looking to seriously cut costs, consider sharing a 1-bedroom!
• Cut unnecessary expenses. Cable TV, Internet, streaming music services, monthly manicures, etc. Take a cold hard look at your expenses. Are there any you can cut to make room for the cost of housing?
• Drive less. Rent an apartment near public transportation or within walking distance of work. Then make a concerted effort to avoid driving. You'll spend less money on gas, car repairs, and could even qualify for a low mileage discount on car insurance if one is offered by your insurance company.
• Pick up a side gig. Nowadays, people are picking up odd jobs everywhere or running small businesses from their apartments. Consider driving for a ride-sharing service, caring for pets in your complex, or selling books/clothes online. Whatever your side gig, doing it consistently can help you generate the income you need to live in the apartment of your dreams.
• Enlist a cosigner. A cosigner takes legal responsibility for making rent payments, right alongside you (although they don't have to live in the apartment with you). Cosigners are people with longer credit histories and often higher credit scores. They can make you a more appealing applicant, especially if you're trying to rent an apartment with bad credit. Cosigners can be parents, siblings, friends, really anyone who is willing to take financial responsibility for making rent payments if you fail to do so.

## Find Affordable Rent on ApartmentSearch

Before making a list of favorite apartments, set yourself up for success by calculating how much you should spend on rent. This can help you greatly narrow your options and prevent you from wasting time and money applying for apartments you may not get approved for (or if you DO get approved, lead to undue financial stress). Using this number, refine your apartment hunt on ApartmentSearch.com—the only locator service that actually pays you for using it!

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