What Percent of Your Gross Income Should You Pay on Rent?
When you're looking to rent a home for the first time, there are a slew of questions about the process. One of the first and probably most important long term is your price range, which should be set at a maximum according to your gross income. While it varies slightly, experts agree across the board that rent should be limited for your financial well-being.
General Rule
The consensus among both personal financial experts and government authorities at the U.S. Department of Housing is rent should not cost more than 30 to 33 percent of your gross income. It should be noted, however, that the Department of Housing includes not only rent but utilities and renter's insurance as part of your housing costs.
Multiple Incomes
If your current gross (before taxes) monthly income is $3,000, then your rent should be no more than $1,000 per month. In fact, most landlords require that you provide proof of income that is at least three times the rent. However, if you are living with someone or are married, that person's income is also factored into the equation. Not only can this get you a better rental, but it gives you more financial wiggle room since your portion of the rent is smaller than it would have been on your own.
Reasons
The idea behind this percentage limitation for rent is that at a maximum of 30 percent for housing leaves you with enough money leftover in the budget to pay for necessities and some extras like dining out and other entertainment. If you make $3,000 gross per month, that's approximately $2,572 net (assuming you're in the 25 percent tax bracket without exemptions). Subtract $1,000 of rent from your monthly net and that leaves you $1,572 to pay your bills, save for your future and have some fun with.
Considerations
The 30 percent rule is a maximum amount, not the standard. Ideally, your rent should be much less than this, but in some major metropolitan areas where rent is notoriously high like Washington, D.C., and New York City, limiting yourself to paying only 30 percent of your gross income for rent seems inadequate. In such situations, you should consider either looking in less costly areas or taking on roommates to allow you room in your budget to save for your future and still be able to spend on fun activities.
What Percent of Your Income to Spend on Rent Bad Money
badmoneyadvice.com/2010/10/what-percent-of-your-income...on-rent.htmlWhat Percent of Your Income to Spend on Rent. Yesterday the Wall Street Journals Developments blog (it covers real estate) carried a post Is Your Rent Too Damn ...
What percentage of your monthly income should go toward your ...
answers.yahoo.com/question/index?qid=20080208182127AADcDO7Last updated: Feb 09, 2008 8 posts First post: Feb 09, 2008Feb 09, 2008 Best Answer: Normally I find myself in shock, dissapointed even flabergasted by answers I've found in these forums but I would agree with Matomi ...
What Percentage of Your Salary Should Go for a Mortgage ...
budgeting.thenest.com Mortgages & IncomeYou won't have to guess whether you can afford that new home you want to buy using the basic recommendation of lenders for a salary-to-mortgage ratio.
What Percentage of Income Can You Afford for Mortgage
www.moneyunder30.com/percentage-income-mortgage-paymentsThis question often comes up among first-time home buyers: What percentage of my monthly income can I afford to spend on my mortgage payment? Does that percentage ...
What percentage of your income goes to rent/ mortgage? -
forums.macrumors.com Mac Community Community DiscussionWhat percentage of your income goes to rent/ mortgage? Community Discussion
What percentage of your income should you pay for rent -
wiki.answers.com Categories Jobs & EducationWhat percentage of your income should you pay for rent? To keep yourself financially stable, it is suggested that you keep your rent or mortgage payment 30%
What Percentage of My Income Should I Contribute To A 401k
www.mymoneyblog.com/what-percentage-of-my-income-should-i...Actually, a better question is what percentage of your income should you contribute to all types of retirement plans? But the 401(k) plan is one of those cases when ...
What percentage of your gross income should go towards rent
wiki.answers.com Business & Finance Personal FinanceAnswer . No more than a third of your gross annual income should go towards housing. As for rent, you should not spent anymore than 25% of your gross income.
What percentage of your net income should go towards a home ...
answers.yahoo.com/question/index?qid=20080229094728AA7GC6wLast updated: Feb 29, 2008 10 posts First post: Feb 29, 2008Feb 29, 2008 Best Answer: Your father is exactly correct! Listen to him! The people on here that recommend, 33% as a mortgage payment are also the ones who have ...
0 komentar
Posting Komentar