Calculating Affordable Rent

A large number of newly constructed apartments and condos in Montreal are equipped with almost every luxury we can wish for. Some have gas fireplaces, in-house mail service, and office equipment along with many other comforts any apartment dweller can hope for.

These amenities need to be taken into account if you’re considering renting such a place. However, are they important enough that you’re willing to take a big hike in the monthly rent, by perhaps $200 or more than you pay now?

While some people may consider an apartment as more than just a place to live, how do you determine how much you can afford in monthly rent without ending up in a financial hole?

How Much Rent Can You Afford?

One suggestion is that your apartment rental should not cost you more than 25 percent of your gross monthly income. For example, if your annual salary is $30 000, which is about $2500 a month, the maximum amount you should spend for rent per month is $625.

Before you move into your new apartment, you should realize that any increase in your rent will affect your monthly budget. Allocating this much money towards your rent means you’ll have less for your other expenses like utilities, entertainment, food and your savings.

In addition to the rent, there are other things you’ll want to consider:

• Is the neighborhood safe?
• Is it close to your job?
• Are there stores, banks, or the post office nearby?
• Do you have close access to public transportation?
• If you own a car, does the building have parking spaces and regulations?

Hidden Moving Expenses

Moving costs can be a real budget buster, especially for the first month at your new place. Renters often get a real shock when they encounter the hidden and/or unexpected expenses such as hiring a moving company and putting down a security deposit.

You may be subjected to a credit check and be required to prove that your gross monthly income is at least three times your monthly rent. This is to ensure that you’re able to pay your rent each month.

Here is a short list of some hidden and unexpected expenses, and pre-moving procedures which many renters either may not be aware of, or that they forget in the hustle and bustle of moving:

• Security deposits, which can be up to a full month’s rent.
• Credit checks.
• Utilities costs.
• Deposits for pets; there may also be restrictions imposed on pet size.

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