Yahoo Answers is shutting down on May 4th, 2021 (Eastern Time) and beginning April 20th, 2021 (Eastern Time) the Yahoo Answers website will be in read-only mode. There will be no changes to other Yahoo properties or services, or your Yahoo account. You can find more information about the Yahoo Answers shutdown and how to download your data on this help page.
Trending News
What percentage of your monthly income should be used to pay rent?
10 Answers
- 1 decade agoFavorite Answer
No more than 28% of your gross income (before taxes). In fact, mortgage companies use 28% in qualifying people for mortgages. I would say the same guideline works well for rentals.
- 1 decade ago
It really depends on not only your income, but on your monthly expenses. Go through and add up the amount of all of your bills, then how much you usually spend on excess things during the month. Subtract this from your monthly salary and that number should be the highest you pay for rent.
- 1 decade ago
I own rental property, and I won't rent to anyone who doesn't have an income of 3x more than the rent - so if the apartment they want to rent is $800 per month, they need to net $2400 per month. I've read suggestions by financial planners that you shouldn't spend more than 25% of your net income (after taxes) on housing, but that doesn't seem realistic in a market that has a high cost of living.
Good luck!
- 1 decade ago
The typical answer you will receive will be between 30 and 40%,
Financial institutions look at debt service ratio's and although there is no hard and fast rule, you may want to follow these and mix it up with your lifestyle and comfort level.
Total debt service ratio, meaning the total of all your fixed expenses (loans, hydro, insurance, rent/mortage credit cards etc.) should not exceed 40 to 45 % as far as banks are concerned.
Good luck
Source(s): 25 year experence as a realtor and property owner/landlord - How do you think about the answers? You can sign in to vote the answer.
- words_smith_4uLv 61 decade ago
When I started out, I was paying almost 50% for a mortgage. Rent would be similar. Make sure to take into account phone, electric, cable, food, entertainment (you're not going to stay in the apartment every day), gas for the car, any other utilities.
- 1 decade ago
The guide which the referencing companies use to check if you can afford the rent is that your gross salary should be at least 2.5 times your rent. So if you earn £24000 per annum, your rent should be no more than £800 per month.
Source(s): 3 years lettings experience - 1 decade ago
you can't buy a home with more then 50% debt to income including the home payment!
Source(s): Seasoned & Successful Mortgage Consultant for 5 yrs. - 1 decade ago
go here and the answer is provided individually for your situation
Source(s): http://www.nativepropertiesinc.com/
