Rent Calculator helps you determine affordable rentals. Input your income & expenses to see how much rent you can realistically afford. Start calculating now!
Calculation Results
Low risk rent: $0.00 / month
Medium risk rent: $0.00 / month
High risk rent: $0.00 / month
Rent affordability
Rent Affordability is — the total amount of money one can spend towards rent per month and not have a financially empty end of the year; ideally, not even at the end of every month. Let’s say your monthly cash flow is 5K, and you have a 1K student loan payment, then about the same expense of 2500 utilities, food, GTFO, and LE to get $1500 left over. So the money still left is what you can spend on rent as if everything else financials are staying the same.
Life is a mess; you lose money, or you might have an unexpected expense (driving bills, medical expenses); you know what? Spontaneous vacations, you have to do with that last mortgage payment. You understand why saving some amount at the end of each month is just fiscally responsible. By saving just a little in the boom times, you will have saved up some money to ride out rough months. In order then to know how much you can afford to pay as rent, learn to manage your cash flow properly. A rent affordability calculator is a great resource for making a rough estimate of the complexity of managing financial risk.
Rent risk levels defined.
This rent calculator determines the various risk levels in these terms: If no regular expenses are provided, low-risk lease amounts are 15% of your after-tax income (your net income minus all ongoing debts), the medium risk is 25%, and high-risk at 35% remaining income which is your net income minus all recurring debt. This is a gross generalization of what the average amount of money you might spend is so take from it what you will, and not all take to be literally true for any actual person.
But, if you name your regular expenses, low risk is 70% of the remaining income, which includes net income, recurring debt, and regular payments, and 80%iss medium risk as high-risk. No regular expense is specified. Less income the less risk because there is less to pay for any future and unforeseen, regular expenses.
How to calculate rent affordability?
To use the rent calculator defined in our calculator, insert your net income after taxes — whether that be annual or monthly salary, hourly wage to monthly value—all you need for the budget. Also, add regular recurring debts such as car loans or student loans and, if you wish, your fixed expenses in food/tolls/water bills each month plus any glories. The calculator will turn this into monthly and calculate what lease payments within your risk tolerance you can afford.
The calculations are really simple percentage multiplication as described in the risk levels part above. For example, let’s say you prefer to lower the risk: it’s 70% of disposable income if you count your fixed monthly spending and 15% — when you don’t. For a closer estimation of what is doable for you, just input your average monthly expenditure.
Illustrative Examples
The table below illustrates the calculation of low-risk monthly rent that one can afford in various cases. Important components are net income, recurring debt (think credit cards and lo and, necessary ongoing expenses (food, utilities, insurance) and fuel.
| Variables | Scenario 1 | Scenario 2 | Scenario 3 |
|---|---|---|---|
| Net Monthly Income | $3,000 | $6,000 | $9,000 |
| Recurring Monthly Debt | $800 | $1,200 | $2,000 |
| Regular Monthly Expenses | $1,000 | $2,200 | $3,000 |
| Affordable Monthly Rent | $840 | $1,820 | $2,800 |
All numbers were calculated using our tool.
Costs other than rent payment
The pricing of a property lease contract is crucial, and it should be able to afford to make regular payments to the one who leases the property, but this is not all you need to keep your lease payments current. A home is so much more than just numbers on paper, even from a strictly financial view. And Some of the Other Expenses To Take into Account When Selecting a Rental Property.
Location-related costs
Travel also costs When you travel. Gas or public transportation month after month for your daily drive to work adds up in cost. If you are a sportsman and recreationist, this will be another expense (albeit an enjoyable one) as traveling comes in the way more often. Where you live dictates the schools, shopping areas, and things to do. Make sure to add these travel costs to the regular expenses column of our tool to get a more accurate result.
Costs due to the size of the rental
While cheaper, Renting a smaller property can cause more friction. You may not have the space for a home office or decent study area, which could stifle your income. Homework and studying might be too hard for your kids to do, limiting future job opportunities. Whereas a bigger rental will cost more in monthly bills for heating and cooling (which can add up fast on the other end).
Other related expenses
In determining rent affordability, you aren’t just dealing with the monthly rent number; consider more. You will need to do the same with security deposit, insurance and any pet deposits or application fees if where allowed. Remember to include the regularly occurring bills (water/gas/electricity/internet/TV) in your costs if they aren’t already. To get an even better idea, plug these costs into our calculator in the “Regular expenses.” Also, remember that some rentals may be unfurnished, so you’d better include it in your further savings calculation, and you might change your mind about the choice.
Financial Caution
While this is a great first step for rental affordability calculations, it is in no way the entire solution. Always seek guidance from professionals when it comes to big financial choices or recurring agreements such as a lease contract. Read those numbers in that calculator with a skeptical eye and at your peril.