That’s it! You’ve made it! You’re moving out and getting your first apartment. You are freeing yourself from your parents’ house and going out into the world alone. It is scary and exciting and filled with so many unknowns – so where do you begin? What can you afford? Don’t worry, we’ve got you. Here is what you need to consider to prepare yourself for your first apartment rental.
1. What Can I Afford?
The rule of thumb is that your apartment rental should cost no more than 30% of your gross monthly income (your paycheck before taxes). This is where you begin. Now take into account any debts you have incurred and your monthly payments to get a more accurate representation of what you can afford.
Now after determining what exactly that is, you need to choose the neighborhood that suits you. If you want to be close to your school, chances are rent prices will be slightly higher due to the location. If you are looking for an apartment in a quieter neighborhood then maybe you need to take into consideration the cost of a vehicle.
Many students and first-time renters live with a roommate. Having a roommate comes with many pros and cons and this decision is completely up to you. One of the pros is that with a roommate you will have a larger budget and therefore more rental options.
2. Other Expenses to Consider
When determining the rent you can afford, you need to take into consideration all the hidden costs that may not come to mind. Does the unit require a security deposit? Are you using a realtor and if so, what will you need to pay them? Do you plan to have renters insurance and what does that cost? What is the average cost of electricity every month? Water? Internet? Parking? The list goes on…
Maybe you found a gorgeous apartment in a brand new building… is maintenance included in the rent? Throughout your search for the right unit, ask these questions, and do your research. It is vital to understand all of these expenses before signing the contract. By doing so you will come off as someone who really does know what they are talking about.
3. Cover All Your Bases
Give yourself and your parent’s peace of mind by understanding the bigger picture. Do you plan to save money each month? Try to come up with a budget that allows you to reach all of your goals and pay your rent. Make sure it gives you enough wiggle room to have some money saved away for long-term goals or future travel plans. You are looking to live alone, not go broke. Think about your income, calculate your expenses, find that perfect new rental apartment, and make your parents proud!