Many people, especially young people, choose to rent a home instead of buying. Predictable expenses, savings in taxes and maintenance, as well as job instability, are factors that tip the balance. But once the decision is clear, the big question comes: How much rent can I afford? Figuring it out is essential to search for a home according to your actual circumstances.
How to know how much rent I can afford
The 30% rule
To answer the question 'how much rent can I afford', experts recommend that it is advisable not to invest more than 30% of net income in housing rental. In this way, the calculation is simple.
When calculating for just one person, subtract debts from the monthly income and apply 30% to the result.
When calculating for a family or several people:
- Add up the monthly income of all household members.
- Add up the costs of credit cards and loans.
- Subtract past debt expenses from monthly income to get net income.
- Calculate 30% of net income, which is the amount that can get dedicated to renting. Let's see an example:
For a couple who earn between € 3,000 and have a debt expense of € 500, the monthly net income would be € 2,500. 30% of that amount is € 750. That would be the maximum rent the couple could afford.
The rule of 40
There is another way to calculate how much can be used for rent, also very simple. It is enough to divide the annual net income by 40. If we apply the rule of 40 to the previous example, the amount will be somewhat higher if we include two extra payments and would reach € 875.
Where to find the ideal home
Once we know the rental expense we could afford, here comes the real challenge: finding a property that suits the budget, needs and preferences.
There are some circumstances to keep in mind. On the one hand, in recent months, the number of rental homes has skyrocketed. In some areas, it has even doubled. On the other hand, this increase in available homes has meant a very significant price adjustment in most of the country, especially in peripheral areas of large cities.
Therefore, those looking for the best opportunities should focus on those suburban neighbourhoods. However, this suburban neighbourhoods usually have good communications networks and all the principal public services. In these areas, it is possible to find better deals and bigger homes paying the same rent than smaller homes in the cities' centres.
The same would happen in more remote and less populated areas. However, in this case, aspects such as the extra cost of commuting or going to the shops, for example, may entail, should be taken into account.
Spainhouses.net makes it very easy for you
If you have already solved the question of 'how much rent can I afford and want to start looking for your ideal home, you can consult the price statistics sectionyou will find in Spainhouses.net. In it, you will find updated prices by provinces, cities, neighbourhoods and other geographical areas so that you have the best starting point.
Once you have decided the geographical area, you only have to enter your criteria in the Spainhouses browser and, in one click, you'll have the best selection of homes to rent. Don't wait any longer to find your ideal home!