If you’re looking for a place to rent, you may be wondering, “How much rent can I afford?” It’s definitely not a number you should pull out of thin air. Nor does any landlord want to hazard handing over the keys to tenants who haven’t bothered to make sure they can actually pay the rent. As such, before you even start perusing listings, it makes sense to calculate how much rent you can afford, given your current income.

How your income affects what you can afford to rent

When you’re looking at properties, you will have to bring in a certain income each month to even qualify for many units. It can vary from company to company, but there is one widely used industry standard: According to Manisha Thakor, director of Wealth Strategies for Women at the BAM Alliance, your rent should be no more than one-fourth of your take-home pay. So if the monthly rent on an apartment is $1,000, that means you’ll have to bring home $4,000 per month to qualify.

Here’s another way to look at it, starting with what you make. Many landlords will require that your annual gross salary (meaning before taxes are taken out) be at least 40 times your monthly rent. So let’s say your annual household salary is $80,000. Take that amount, divide it by 40, and you end up with $2,000. That’s how much you can afford to pay in rent.

How to factor in other expenses

Once you’re living on your own, you’ll have to pay more than just rent, of course. For one, unless you live by candlelight, you’ll need to pay for utilities like electricity. The cost of utilities is related to the size of your home (the larger it is, the more it costs to heat and cool it), and usually pencils out to about 10% to 20% of your rent.

So if your rent is $1,000 per month, you’ll pay $100 to $200 in utilities. And odds are that you’ll also be paying monthly for Internet and phone service, too.

So to get a more accurate gauge of whether you can afford your rent, add up all your regular expenses and use an old personal finance adage: Your monthly cost of living shouldn’t exceed 30% of your take-home income. That means rent, utilities, water, Internet, renters insurance, and any other apartment-related costs shouldn’t take up much more than that 30% chunk, so that you can live comfortably.

Crunch your numbers with a rent calculator

Here’s an even easier way to figure out how much rent you can afford: Enter your salary in an online rent calculator. This rent calculator from Myfirstapartment.com also estimates how much you’ll pay in utilities. The more info you can factor in, the better. Because after all, even if a landlord deems your salary high enough to rent a place, it’s no fun if it leaves you so strapped for cash you can never meet friends for a night out. For more advice, check out this article on first-apartment budgeting for frugal renters.

• Article source: http://www.realtor.com/advice/rent/how-much-rent-can-i-afford/?iid=rdc_news_hp_carousel_theLatest