Whether you are making a big cross-country move or you’re just looking for a new neighborhood in your current city, there are certain questions you need to ask yourself before you start searching for a rental home. Writing down your answers will help keep your search on track.
Living with other people is ideal if you want to keep rent down, split bills and share chores, but you may have to give up some privacy or learn to be tolerant of other people's quirks. Renting a place of your own (or to share with your partner) will give you more privacy, but you'll be in charge of the full tenancy agreement and the responsibilities that come with that.
How much rent can you afford?
When working out your budget, remember that you'll have to pay for more than just rent. There will also be weekly, monthly and annual expenses to take into consideration; like food, utility bills, insurance, transportation and entertainment.
As a general rule, your rent should be no more than 1/3 of your weekly net income (income after tax). For example, if you bring home $500 a week after taxes, your weekly rent should be around $150-$165.
Use this formula to estimate how much you can safely spend on rent each week:
- Work out your total weekly income by combining the net earnings from your job with any additional income you receive.
- Divide by three to get an approximate idea of how much rent you can afford each week.
- Add up all of your other weekly expenses like bills and food.
- Combine the total amounts from step 2 and step 3. If they exceed your weekly income, lower the rent or expenses.
Where do you want to live?
Once you know how much you can spend on rent, decide what neighbourhood you want to move into.
If you’re a student, you may want to live close to where you study to keep transportation costs low. If you're working full time, look for neighbourhoods that you can commute from easily. Other factors like accessibility to shops, public transportation and entertainment can also help you decide where to live.
Neighbourhoods close to the city centre may feature smaller properties and higher rents. Properties in the suburbs or rural areas are often bigger and cheaper, but you'll pay more in transportation costs and spend more time commuting.