how much of my monthly income should be spent on rent? i am one year removed from college and making less than 30k

Asked by David Joseph, 20902 Tue May 29, 2012

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6
Tending, Both Buyer And Seller, Washington
Mon Jun 18, 2012
Actually, your income should be 40 X your monthly rent. So, if you pay 2,500 for rent, you yearly income should be 100,000.
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P.S. I mean, that is an accurate and helpful answer, but sadly, most people can't find anything to rent in most markets that fits into the recommendations. :(
Flag Wed Oct 9, 2013
Riiiiiight...this is realistic for people (not).
Flag Wed Oct 9, 2013
Cheryl Takach, Renter, Hopatcong, NJ
Thu May 31, 2012
RULE OF THUMB. Under 1/3 of your gross income. Also keep in mind what is or is not included in your monthly rental fee when you are calculating.
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Akil Walker, Agent, Upper Marlboro, MD
Thu May 31, 2012
Hello David,


i wish I could go back to my college days and live the dorms again. congrats on getting employment for a recent college grad, the market is tough.

Regarding your rent, I would go no higher then 40% of your net income. This is assuming you do not have any other major debits i.e. student loans, credit cards, car note, etc. If you do I would scale it back to about 25% of income. Probably best to get a roommate or rent a baement unit to save some money. I had a roommate for 3 yrs and it allowed me to save to buy my first home.

I know you are just starting out but try to save at least 10% of your income to build your nest egg.

good luck
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Kathy Hutchi…, Agent, Huntingtown, MD
Wed May 30, 2012
I would limit the rent cost to 30-35% of your monthly gross income if you have to pay your own utilites- if utilities are included in the rent then you can go up to 40% of your gross monthly income.
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Greg Myers, Agent, Gaitherburg, MD
Tue May 29, 2012
About 30% to 35% of your gross monthly income.
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Darrell D. D…, Agent, Schertz, TX
Tue May 29, 2012
Hi David!

At the extreme max, I would recommend no more than 1/3 of your monthly income. In fact, many property management companies will not approve you if you are self-qualifying (without a spouse or other occupant) and your income is only 2 times the rent. But, any place you apply for will have specific guidelines of acceptability and they all vary slightly - so, make sure you know if you would qualify before giving up money via an application fee.

Now, that being said, I would recommend to spend no more than 1/4 of your income if possible. Trying to start out by living at the extreme point of your income will not allow you to save and will make you live paycheck to paycheck. Congrats on the upcoming degree.


Darrell D. Drouillard
Home Team of America
16719 Huebner Rd., Bldg 4
San Antonio, Texas 78248
210-373-6160
210-881-6760 (Fax)
http://www.dddrealtor.com

'Serving all Your Real Estate Needs'
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