How Much Should I Spend on Rent?
Experts generally say you should budget no more than 30% of your take home income for combined rent and utilities.
How much rent you should actually pay in rent depends on a variety of factors and, unfortunately , the days when you could just plug your take home salary to a calculator and get an instant answer are gone. There are, fortunately, tips and guidelines to help you make smart and informed decisions.
Know the Market: Rents can vary dramatically from one geographic location to another. Before you start hunting apartments, do your homework and get a good idea on what's available in your area. Know the average rent for the type of of apartment you are looking for, amenities included etc.
You can't make a good decision about the value of a particular apartment without knowing the options.
Do the Math: Calculate your monthly bottom line expenses and figure out what you can afford.Then, cut that number a bit to make sure that you are not cash strapped. Most people aren't even aware of their monthly expenses or tend to underestimate their expenditures, so it might help to track your spending for a month. Lot's of apps which can do this, one more reason to go for a good smart phone.
Don't Listen to Experts, Look at Your Budget: Most experts say you should be living living on 25% or less of your monthly take home salary. Instead of listening to experts or judging how much to spend on what others are paying, wouldn't you rather consult the most oracle there is..? Your budget is the first place you should look to see what you can or can't afford. One more reason to track your expenses.
ConsiderRelated Expenses: Remember the ₹ amount you are paying isn't the only expense while renting. What's important is the net cost, and that means taking related expenses into account. Some of those are obvious, like utility bills or condo maintenance fee. Others tend to get overlooked. For example; housing costs tend to be cheaper in the city outskirts, but whether that means an overall cost savings depends on commuting and other expenses.
Take a Dry Run: Pretend that you're already in the apartment financially. For the next month or so take an amount similar to your apartment expenses and set it aside.See if you can live on what's left. If you can't do it now, you won't be able to do it later when you've signed the agreement.