There are many factors to consider when determining how much you should pay in rent. From location to convenience, do some thinking before signing the lease and committing yourself to a monthly rental payment.
Market rent for your city. If you are in a big city, chances are your rent is high.If you don’t have the paycheck to cover it, you might consider a longer commute or roommates to lower that apartment rent. In the Hampton Roads area (where our apartments are located), rents vary depending on the city, and the location in that city. The closer you are to downtown Norfolk, or central Hampton or Patrick Henry in Newport News, the more your rent will be. The age of the apartment also determines the price here in Hampton Roads. Newer will obviously be more, but don’t overlook apartments that have been renovated.
Other Expenses. You might find a cheap apartment, but if the cost of heating and cooling it is twice what it would be in a newer apartment, you are still going to be short. Make sure you ask about what utilities you are responsible for and the average bills. Your leasing agent should be able to answer, or find the answer to this question. Don’t forget to consider your internet, cable and phone bills. People often think that they can rent a house for the same amount as an apartment, but remember that maintenance is typically included in an apartment. Budget for repair expenses when considering a rental home.
Quality of life factors. Will you have to drive more? How much is your time worth? You might consider the “cost” of living further from work. Some people enjoy the downtime of their commute, and listen to audiobooks or music during that time. Others prefer the convenience of waking up at 6:30 to be at work by 7:00. Do you like to go out on the weekends? You will want to live close to the action. Do some personal reflection about what is most important to you, time or money, and make your decision on where to live based on that.
There is no secret formula calculator for figuring out exactly how much you should be spending on your apartment although at Signature Management, we require that you make 2.5-3 times the rent to qualify or 4 times the rent for you and your roommate. Use a spreadsheet or website to keep track of all your non-housing related expenses before making a decision to move. Mint.com is very helpful and easy to use. Experts recommend spending no more than 25-30% of your income on housing.