There’s a lot of information to consider when you’re looking for a new place; what kind of neighbourhood you want to live in, how many bedrooms or bathrooms you need, the amount of time you’re willing to spend commuting, and the list goes on.
But before you consider all that, it’s important to take a look at your financial situation to determine how much rent you can afford. Money doesn’t have to be a taboo topic, and there are plenty of ways to figure out what your price range is.
Have a Budget
If you’re not already keeping track of your daily and monthly expenses, this is your cue to start. Little expenses can add up, and knowing where your money is going can help you understand what you need to do to get yourself into the financial situation you want to be in (if you’re not already there).
Start a spreadsheet and update it every week with all your income and expenses. Once you notice how much you typically spend on certain things, you can set limits for yourself, especially if you’re considering long-term saving goals.
Consider your debt
When making your budget or figuring out how much you can spend on rent, don’t forget to factor in your debt. Even if your monthly payments are small, they can still affect your financial situation.
Rent to Income Ratio
There are many ways to calculate how much rent you can afford in comparison to your income. One rule is your rent should be no more than 30 percent of your income. Another is your income should be 4 times your rent. A more holistic budgeting tip is the 50/30/20 rule: you should spend 50 percent of your income on fixed costs, 30 per cent on day-to-day spending, and 20 per cent on financial goals.
Each of these is a general guideline, but what’s right for you depends on your unique situation. Taking your budget and debt into account, think about what you’re comfortable spending on rent each month. Develop low, middle, and high options to keep in mind while browsing properties.
Factor in Additional Fees
Looking for a new home comes with more expenses than just rent, and being prepared for them will make the whole process smoother. Some of those fees are application fees, security deposits, and tenant insurance.
Depending on your lease, water, electricity, heat and internet may be additional costs to rent (unless you live in a Paragon Living building, where high-speed internet is free). And if you want to make the moving process smoother, you’ll need to hire a moving company as well. Keep all these in mind, so you stay within your desired budget.
Ways to Cut Costs
If your budget isn’t where you’d like it to be, there are many ways to make your money go further. If you have an extra bedroom, you could get a roommate to split rent costs. Taking public transportation is not only better for the environment but better for your wallet too. If you’re living in Winnipeg, Rapid Transit offers fast transportation to major routes.
If you’re spending a lot of money on takeout, try cooking more meals at home. Or if there’s another unnecessary expense that keeps popping up on your bank statement, try going a month without it. You’d be surprised how quickly you forget about something you thought you couldn’t live without.
Lastly, you could also start a secondary source of income. Maybe you paint beautiful landscapes or have a knack for managing social media accounts. There are many ways to monetize your hobbies to create a little extra room in your budget.
Use an Online Rent Calculator
There are great online resources to see how much rent you can afford each month. Check out this free rent calculator from the Canadian Mortgage and Housing Corporation to explore your options.
To view our available properties in your price range, use the customizable search tool on our Properties page.
