How to Budget for Your First Rental Apartment

Aaprtment Budget
Setting up a realistic budget is an important step toward being financially prepared to rent your first apartment. Whether you’re looking for an apartment in Destin, FL, or another city, knowing exactly how much rent you can afford will help you narrow down your search to places that are within your budget. This means that you won’t waste your time looking at apartments you can’t afford.

Additionally, budgeting for your first rental apartment will help you ensure that you can make your monthly rent payments. As we all know, paying your rent on time every month is critical because it can affect your credit score along with your ability to qualify for a mortgage or other apartments in the future.

Now, let’s find out how much you can truly afford to pay for rent before you start searching for the right apartment.

Start by Crunching the Numbers

Financial advisors agree that renters should spend no more than 30% of their gross monthly income on rent. This means that, if you earn $4,000 per month before taxes, your rent shouldn’t exceed $1,200 a month. While 30% of the gross monthly income is the golden rule when you’re trying to figure out how much rent you can afford, the share of your income that should go towards rent actually depends on your income level and where you want to live.

Therefore, the best way to go about budgeting for your first rental apartment is to figure out how much you and your partner, if applicable, earn each month. Make sure that you include all revenue streams. If you don’t have a partner, you may want to consider renting an apartment with one or more roommates, who will cover their shares of rent agreed upon.

Next, it’s important to list estimated housing costs. You can divide these costs into the following categories:

  • Utilities – Although some rentals include utilities, you might have to pay for things like electricity, gas, internet and/or cable. Thus, you must account for all these costs in your budget.
  • Groceries and food – If you’re going to live on your own, get in the habit of planning your meals. Think about how often you plan to shop and eat home-cooked meals versus eating out. Then, factor in all those costs.
  • Transportation – Where you live might affect the cost of commuting. For instance, a rental apartment in a secluded area is often less expensive than an apartment that’s conveniently located near restaurants, shopping centers, parks, schools, hospitals, pharmacies, and different work opportunities. In that case, however, you could spend hundreds of dollars a month on transportation costs to commute to and from work and different social engagements. 
  • Debt payments – When budgeting for your first rental apartment, don’t forget about other financial obligations you may have, such as a car loan and/or student debt and credit cards.
  • Renter’s insurance – While not mandatory with all apartments, getting renter’s insurance is a smart move particularly if you’ll have lots of stuff you care about, such as TVs, laptop, camera, etc., in your apartment. Besides protecting your personal property from theft, fire, and damage resulting from covered perils, renter’s insurance coverage will help you out with other things, such as additional living expenses, personal liability, and emergency medical expenses.

Additional Costs to Consider

There are a few additional costs you should take into account when setting up a budget for your first rental apartment in Destin. To begin with, depending on how many personal items you have, you might need to enlist the services of a moving company. As well, if you intend to rent an unfurnished apartment, you may need to buy furniture. As it’s your first rental, a great idea would be to look for inexpensive furniture.   

The security deposit is another one-time fee you should consider. In a nutshell, the security deposit is a type of guarantee that you’ll take good care of the apartment you rent. Damage to property as well as unpaid rent and unpaid utilities can be deducted from your security deposit. If you’re renting with pets, you may also need to cover a pet deposit.

When creating a budget to rent your first apartment, one more thing you should know is that rental rates vary not only per city but also per season and type of property. In Destin, FL, the lowest rental rates are usually found during the off-season. As well, living in an apartment is less expensive than living in a house. That’s because the rent for an apartment is usually more reasonable, and you’ll also spend less on utilities.

In addition, make sure that you take into account all the perks included. Opting for a unit in a luxury apartment complex that provides a wide range of amenities and services could save you a lot of money in the long run even if the rent is higher than the rent you’d need to pay for an apartment that doesn’t offer many amenities. When it comes to renting your first Destin apartment, remember that the earlier you start budgeting, the sooner you’ll be able to move in! 

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