Calculator your monthly rent per person for your upcoming lease or mortgage. Enter your total rent, utilities cost, and number of roommates.
Rent Calculator Afford
The rent calculator above can certainly help you evenly distribute the cost of living in an apartment or home with multiple roommates, but it might not help you decide how much you can afford.
So how much can you afford?
That depends a few different circumstances. First, how much income you make is usually the number 1 deciding factor. The typical recommendation is that you spend no more than 35% of your take home pay on rent or mortgage.
For example, if you bring home $3000.00 per month (after taxes, insurance, and retirement) than you should not spend more than $1050.00 monthly on housing, and that is the upper limit. This includes utilities ect.
The next deciding factor on how much you can afford is typically the location of your new home with relation to work. For instance, if you are moving far away from work, you must take into account the added expenses of gas for commuting and the cost of maintaining a car that is going to have a lot of miles on it. If you are moving closer to work, this may push you monthly budget up slightly.
Lastly, use your own budget to guide your decision. Everyone’s budget is different, and if you take a single quote like “35% of take home pay” without considering your individual circumstances, you may end up in an unfavorable situation for the term of your lease.
Calculator Rent vs Buy
Should you rent or buy an apartment?
For most young people, renting is the go to option. It’s less involved than buying, and it takes little to no up front cost. With that said, it’s important to understand that when you rent, all of your money you spend is going solely into allowing you to live in that establishment and is gone afterwords. When you buy, that money is also going into an investment you can later sell.
The easy answer is, if you have enough capital for a down payment, and enough time for all of the paperwork, buying is always preferred from a financial standpoint.
Rent vs Lease
Renting and leasing are essentially the same thing, but the terms are used in different contexts and situations.
Leasing is an agreement between two groups of people to allow the use of an asset of an extended period of time, usually over 1 year in time frame.
Renting is the monthly payment made to the party that owns the property in the lease agreement. Typically used in housing, these agreements are usually 1 year or less.
Rent Calculator Income
As mentioned above, your total rent you can afford is mostly based on your income. Using your monthly take home pay as a guide to choosing where to live is the first step.
Do not spend more than 35% of your monthly take home pay on rent for housing unless you have little other expenses.