If you’re just starting out and looking for your own place, you might be wondering, “Do I make enough money to rent an apartment?” Rents are going up at an alarming rate, so it is a good question. Let’s dive into it and find out what it takes to rent in today’s world.
Do I Make Enough Money to Rent an Apartment
The answer to this question is going to be determined by a number of factors.
This includes your monthly rent, your personal financial situation, and where you live.
So, let’s take a look at how much you need to make to afford rent and what type of apartment you can get.
1. Making Minimum Wage
The sad fact is that most minimum wage earners can’t afford to rent an apartment.
At least not on their own.
Even an apartment on the low end of the price range can be out of reach when you add in all the other expenses that go with renting.
You’ll have a hard time paying the rent on time each month.
The good news is that there are ways to make renting easier if you’re living on minimum wage. You can read about them here.
2. A One-Bedroom Apartment
Studies show that you need to make $17.14 an hour to afford a one-bedroom apartment in the United States.
That would equal $685.60 per week before taxes or $35,651.20 dollars per year.
The rule of thumb is that you shouldn’t pay more than 30 percent of your monthly income on rent.
So, if you’re making $2,970 per month (which is what you would make in the above example) you could pay up to $$891 dollars a month in rent.
Now depending on where you live, that might be on the high side for a one-bedroom apartment.
However, if you live in an area with a high cost of living and high housing costs, like San Francisco, that is going to be on the low side and you won’t find a one-bedroom in this price range.
For example, where I live in Illinois, in a rural area, you can rent a one or two-bedroom apartment for $650 dollars.
However, if you’re in Chicago, you will need much more.
This means location will play a big part in whether or not you can find affordable rent when it comes to how much you need to make to afford a 1 bedroom apartment.
2. A Two-Bedroom Apartment
Now, maybe you want a larger apartment and think you have the apartment budget to cover it.
Let’s look at what income you need for a two-bedroom rental apartment depending on where you live in the United States.
California – $30.92 Per Hour
It’s no surprise that California has the highest monthly rent and that you need to make the highest hourly wage to afford a two-bedroom apartment.
That’s right, you need to make over $30 dollars an hour to afford a two-bedroom apartment.
That means a yearly salary of $64,313 dollars.
This is assuming a 40-hour workweek.
New York – $28.08
New York comes in a close second.
You will need to be making at least $28 dollars per hour.
That comes to an annual salary of $58,240 dollars.
Illinois – $20.87
Illinois rounds out the top three at $20.87 dollars per hour.
Or, $43,409 per year.
Although I can tell you from personal experience, if you aren’t living in Chicago, you can make less and still rent a 2-bedroom apartment.
Florida – $20.68
Florida comes right in behind Illinois at $20.68 per hour income.
So, if you’re wondering what apartment can I afford, take a look at your paycheck and make sure you are making $43,000 dollars a year or more before you sign an apartment lease.
Kansas – $15.59
If you’re living in Kansas and wondering, can I afford an apartment, you certainly can if you are making a bit over $15 dollars per hour.
Heck, this is half of what you need compared to California.
Your salary of $32,500 dollars should have you sitting pretty.
Idaho – $14.65
Idaho is one of the cheapest places to rent an apartment in the United States.
You should be making $14.65 dollars per hour here or $30,472 to comfortably rent a two-bedroom.
Keep in mind all of these amounts are averages.
You can find your dream apartment for less money.
You might have to look a little harder or move to a less expensive city.
How to Calculate How Much of Your Income You Can Spend
The rule of thumb suggests that you shouldn’t spend more than 30 percent of your gross monthly income on rent.
That’s a great rule, but depending on your situation and your priorities, you might want to spend more or less.
40 Percent of Your Income
Keep in mind, if you are spending this much per month on your rent, you might have a hard time finding a landlord that will rent to you.
This is a bit out of their comfort zone as they would like to see this percent at 30 or 35 percent or less.
Even so, if you are in a really expensive city, you just might not be able to find an apartment for less than this.
If you’re at 40 percent of your income for an apartment, you better not have any debt.
Otherwise, you will find it very difficult to make all of your monthly payments.
You will also have to cut other expenses such as travel and you will need to live on a pretty tight budget.
25 Percent of Your Income
This will give you a good balance.
You can still afford a nice place to live, but you will have money left over to enjoy yourself.
You can eat out and go to the movies.
Travel might be possible once a year.
You may also enjoy:
15 Percent of Your Income
If you are only spending 15 percent of your income on your rent, this is telling the world that where you live isn’t as important to you as other activities.
You should have plenty of money to go out with friends on a regular basis.
Travel might be a regular part of your life as well.
You’ll also have plenty of cash left over to add to your savings account and emergency fund.
To determine how much rent you can afford when apartment hunting just take your monthly income, before taxes, times 30 percent or whichever percentage you are comfortable with.
This will give you a good place to start.
You may also enjoy:
To Sum it All Up:
You can find the perfect apartment if you look hard enough and with a little advanced work, you will know upfront if you can afford it or not. The goal is to find an apartment rental you like but that won’t make paying your other monthly expenses too difficult.