If you’re a first-time tenant, it can be difficult to decide how much you can spend on monthly rent or estimate its cost. Taking that into consideration, here’s some ways to make this decision easier.
If you wanna decide how much to spend on rent, you have to first know what is your income. Knowing this makes it easier for you when you start thinking about your monthly rent.
The easiest way to begin is to pick a fixed percentage of your income. This means that a certain amount of your income will be spent on rent.
But if you’re a student who has taken out student loans, take the loans into account before you start spending.
It’s also highly recommended that you look up the average rental value for the properties around the area you want to rent in before starting to budget.
For instance, you want to give up 30% of your income to rent and your earnings are RM3000. Therefore, you can spend RM900 on rent. So now you know that you have RM900 to spend, but an area that you’re considering is more expensive than you thought. Maybe it’s more convenient or accessible, but you’re not sure what you can do.
Here’s some ideas on what you can do.
- Get a roommate
Finding someone to room with you helps immensely. Maybe you can get a few housemates. Bonus: new friends who might become your best friends!
This is because, if you do this, you can split the rent, at the very least, in half. So you can consider a better and more expensive property. Or at least a more spacious one.
For instance, a 2-bedroom property would be cheaper then a 1-bedroom property. at this point would be more worth it as you split the rent.
2. Consider the utility costs.
Don’t forget to take these into consideration as well:
- water bills
- electricity bills
- gas bills
- cable bills
And so on. If you’re lucky, they might be included in the rent so make sure you check!
3. Save on other areas of your life.
For instance, don’t get cable TV or eat at home instead of going out. Also, you should avoid big expenses like traveling, until you make enough money to do this. Now that you have saved money, you can spend more on rent.
4. Look for a property that is convenient and has accessible public transport so that you won’t need a car. And therefore, have no need for fuel. Fuel is usually one of the biggest expenses along with vehicle maintenance or service fees, so public transportation this case would help significantly in cutting down cost and saving money.
Last but not least, always check what expenses you can expect during the month. Then you won’t have surprises. It’s never too late to get a better understanding of your finances and where you stand financially. This will help you make better decisions in the future.
Wanna know more about monthly expenses? Get to know what you have to pay for when renting a house here.