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| *Ostroff, Fair and Company>>>Renting & Real Estate |
How much rent can we afford? |
Both of us are on Disability, major health related. We both only draw 650.00 each and I recieve 386.00in child support each month. We both plan on going back to work, but only PT as we have many Drs visits. We are able to make 800.00 extra a month before taxes. Any thoughts would be appreciated. Thanks. I always heard that your rent should never exceed half of your monthly income, and 1/3 is ideal. Don't count any unreliable income in your monthly budget - if you have to go without it one month, you don't want to be flat broke. Good luck! http://www.lostsaga.com/common/remain.as... click on the link and look at the top of left side, click the first button then you can get a lot of information. Don't use the child support on anything other than your kids, obviously. Get an apartment and not a house, It doesn't sound like that big of a set back if you go and make a budget. (example)Just buy one less bag of chips or one less new T-shirt for the summer. I'm going through something similar, just tighten your belts for a little while, you'll be okay! You can move to an affordable housing community, they will take 1/3 of your income. It would be a good idea if you can find one in a decent area. If you visit the place at 2am and its quiet, you should be ok. They also tend to separate family, disability and elder communities, which is good. Here is a link to the hud site: http://www.hud.gov/renting/index.cfm... I have some rental properties and what we have found over the years is if a tenant's gross income is 3 times the monthly rent, they tend to be able to handle it well. If income dips below that level or the rent goes higher, you start to see more people struggling to afford it. This is a broad brush approach, but I would caution against being more agressive, in terms of feeling you can handle a higher rent. If you have expenses outside the ordinary, just subtract them from the gross rent before you divide by three to "normalize" your income. If I understand your numbers above you would gross approximately $2486 per month. Taxes on child support are paid by the person paying them, so you can round up a little, since the $386 will be tax free to you, lets call it $2550 in gross income. so the rent you can afford would be around $850 per month if my math is correct. Again, you should subract from the $2550 any unusual expenses you incur, perhaps medical? and then divide by three for the rule of thumb affordability number. There are many places that charge a certain amount based on your income. Look around, I've known people to rent as cheap as $100 a month. Don't pay more than 30% of your take home pay. To really figure it out right, take your last pay stub, look at your net pay figure, and multiply by 52 (weekly pay), 26 ( every two weeks) or 12 (monthly). Now multiply that answer by .3 and that gives your rent figure. Do not anticipate raises, bonuses or other windfalls. |
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