There is a decline in homeownership in recent years. Statistics today suggest that 36% of households in America are homes for rent. Further, 65% of homes being rented are by young adults.
It is becoming a bigger struggle for young people to buy their first home, with prices of homes appreciating too high, too fast, and down payments becoming too high to be affordable. Homes for rent are much easier to find and afford in today's real estate market.
When looking at rental homes as a better option than renting a small apartment, you are not alone. It is the next best thing to homeownership. However, you want to ensure you are choosing a rental home you can afford to pay monthly.
How can you determine what rental home is right for your budget? There is a formula and some guidelines surrounding this formula. Keep reading to learn more.
Spend on Rent
Before you search for rental homes that will be your new abode, you must understand how much rent you can afford first.
You can't spend your whole paycheck on rent. You need money left, after paying your rent, for things like monthly bills, insurance, groceries, fun money, and savings. To do this, here is a good equation to start.
30% of Gross Monthly Income
This is a popular standard that a renter will use to help determine how much rent they can afford. Since 1981, a rule of thumb suggests you allocate 30% of your gross monthly income to paying your rent. Your gross income is your monthly income before taxes.
However, with today's inflation, recommendations now are to stay under 30% of your gross monthly income. Also, consider other factors unique to your situation. If you have an exorbitant amount of student loans or credit card debt, consider lowering the amount of what you need to budget for rent.
Why 30% Is a Good Margin?
When you spend over 30% monthly, there is less money to handle other expenses. It also makes saving money a challenge.
If you have a considerable amount of debt, consider cheaper rental homes. You do not need to put yourself in a worse position than what you came into a lease with. Be practical with paying your rent and check out rental homes that can improve your overall quality of life, including your financial health too.
Adjust Your Spending Habits
If you find rental homes are slightly above your comfort zone financially, you can also tidy up your spending habits. Perhaps you enjoy eating out a lot and should switch to cooking more at home. You may like to plan vacations and travel, and this could be a time to cut back on these expenses.
It could be a struggle to find good rental homes in your budget, and if so, you will need to look at your overall situation. Make a few lifestyle changes to accommodate paying your rent.
Homes for Rent
When you have your budget and you are ready to look at homes for rent in Columbia, South Carolina, in your price range, the next step is to contact the agents at HomeRiver Group. You can discuss your property needs, and they will help you.
Find exactly what you are looking for! Contact HomeRiver Group today.
