Rent Calculator is a budget estimation tool that shows properties that fit your budget best. Income, Savings, Debt and other expenses could impact the amount you want to spend on rent each month. Input your net income (after tax) and the calculator will display rental properties with price ranges within 40% of your estimated gross income. Property managers typically use gross income to evaluate an applicant's qualification to rent their properties, hence the tool assumes your net income is taxed at 25%. Be mindful, actual tax rates vary.
To calculate how much rent you can afford, Rent Calculator provides an easy way for users to estimate how much of their monthly income they are willing to use for rent. It displays an estimate of how much a user will pay if they decide to spend 20%, 30% or 40% of the monthly income on rent. If you use the additional options, we deduct the rent from your income and subtract your debt, expenses, and savings from the remaining money, depending on which fields you filled in. The final number represents the money you have left to spend per month.
Several factors are used to estimate what fraction of your monthly income should go into paying rent, the most important of them being your income level and the location you're looking to reside. There are a few commonly accepted rules you can use if you want to figure out a specific rent to income ratio that works for you. Rent Calculator initially calculates your estimated rent budget as 30% of your monthly income and provides a range of options to choose the estimated percentage of your monthly income you will like to budget on rent. These options are:
20% - THRIFTY
If you wish to spend around 20% of your earnings on rent, we calculate your projected expenditure based on the monthly income you provide. Be advised that while you are likely to save more on rent
with this option, you may have to sacrifice living in luxurious, well situated properties in plush communities. This option helps users who are more savvy and not looking to spend much on accommodation to estimate
how much they will be paying for lower priced listings on the market.
30% - THE SWEET SPOT
Spending around 30% of your income on rent is the golden rule for most people when they're trying to budget for rent payments.
A 30% budget on rent can help you reach a healthy balance between comfort and affordability. For a median household income, 30% should guarantee you a place
you can truly call home. At the same time, you should have enough money left to keep up with any debt you may have and contribute to your savings.
40% - A SPLURGE
This option is generated for users seeking for a luxurious, comfortable place to call their home. For above-average income households, allocating 40% of your monthly income to rent
should get you a luxurious home with comfortable, spacious living spaces. However, be mindful you will be spending an extra 10% of your income on rent for the luxury of living in a plush neighborhood.