Understanding what you can afford

What do you earn? What do you spend? How much do you have in savings?


It can be hard to know where to begin the rental process, but one of your first steps is making sure you have a firm handle on your finances.

Be mindful of all your expenses, not just what you expect to be spend on rent each month. The best way to get started is by tracking your finances and creating a budget. To help you begin, use our interactive budgeting tool to compile a list of your monthly expenses.

So, how much should you spend on rent? The general rule of thumb is to spend no more than 30% of your take-home income on housing-related expenses, but everyone’s financial situation is unique.

That's why it's important to understand how your expenses fit into your budget. You'll quickly get a sense of your essential and non-essential spending habits. At the end of the day, think about your individual financial goals and savings plan in order to decide how much you can afford to spend on rent.

The costs of renting

Your monthly housing payment is only one of the housing-related costs you must factor in when deciding where to live. Plan to make sure you have saved for upfront costs and budgeted for those expenses that occur on a recurring basis.

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    Upfront costs

    • Application fee. Landlords may charge this fee to cover the administrative costs associated with verifying your income, employment, financial and rental history, and references. If you apply to multiple properties, these fees can add up quickly.

    • Security deposit. Most landlords will require about one month’s rent upfront, which is usually refundable, as long as you do not damage the property and pay your rent on time and in full.

    • Pet deposit or fee. If you have a pet, you may have to pay a pet deposit. Alternatively, some landlords may charge a monthly fee for you to keep your pet.

    • Move-in fee. This non-refundable fee typically covers turnover costs like changing the locks or updating building directories.

    • Moving costs. Whether you're moving across town or across the country, the cost of transporting everything you own to a new home can add up quickly.

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    Recurring costs

    • Utilities. Utilities include things like electricity, gas, water, cable and Internet. Some (or all) of the utilities may be included in your rent.

    • Renters insurance. Whatever you do, don’t skip renter’s insurance! For a relatively low monthly cost, you can insure all the belongings in your home. If your home’s contents are damaged by circumstances beyond your control, you’ll be glad to have the financial help to replace your furniture, electronics and other high-cost items.

    • Parking fee. Is parking included? Depending on where you live, the cost of a monthly parking spot can significantly increase your monthly housing cost.

    • Amenities fee. Some rental communities charge for amenities such as an on-site gym or pool. You’ll be charged whether you use these amenities or not.

    • Yard maintenance. If you rent a single-family home or townhome, you’ll be responsible for the upkeep of the yard.

    • Rent increases. Your rent will likely increase over time with inflation.

    Be sure to talk with your landlord about all anticipated costs throughout your renting process. The more you’re familiar with fees and costs, the better off you’ll be.

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Understanding your credit

As you get a better grip on your finances, it's important that you also understand how credit plays a role in renting. Learning how to use credit wisely can put you one step closer to renting a home.

Learn more
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Renting with the goal of buying

If you're planning on becoming a homeowner someday, there are steps you can take now to help you achieve your goal in the future.

Learn more
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Preparing to rent