When looking for a new place to live, the many considerations you’ll face range from amenities and location to square footage and move-in fees. But, as excited as you feel to jump right in and start calculating your commute or finding your new local dive, figuring out how much you should spend on rent is a critical first step. Too often, renters find themselves locked into a lease only to realize too late that their budget runs a little tighter than they wanted.
Concessions can lower the average cost of a lease, but they do not necessarily lower every monthly payment. Before treating a “two months free” offer as affordable, confirm the base rent, recurring charges, and payment schedule, including the months when no rent credit applies.
Looking for your dream apartment? Reach out to AptAmigo. You’ll get 1-on-1 help from a local expert who can find you the perfect place within your budget.
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How Much Should You Spend on Rent?
The traditional rule of thumb states that your rent should equal one-third of your total income. Although this ratio generally serves as a useful suggestion, some apartment complexes actually require your monthly take-home pay to be at least 3X the cost of rent. So, if you sign a lease on a $1,400 unit, you might be required to submit pay stubs that show a monthly income of over $4,200.
In some cases, landlords or leasing staff do not require proof of income. If you’re self-employed, earn income through investments, or otherwise don’t receive “provable” paystubs, this can work out better for you. However, the one-third rule still holds as an excellent guideline for calculating how much you should pay. If you bring home (after taxes) $3,600 per month, then spending $1,200 on rent should feel comfortable and should not infringe on your “fun money.”
Figure Out What You Can Afford
The one-third rule offers a starting point, but the rent you can comfortably afford depends on your local cost of living and other financial commitments. Being alive is expensive, and taking the time to add up your other monthly costs will help you avoid unnecessary stress. Beyond groceries and phone service, add up transportation costs such as transit fares, fuel, insurance, and parking. Include debt payments and planned contributions to a savings account, counting any car loan payment only once in your budget. Don’t forget about seemingly insignificant charges like Netflix, BarkBox, and the like. They add up quickly.
Don’t Forget About Miscellaneous Charges
Build an itemized list of apartment expenses beyond base rent. Ask about water, gas, electricity, internet, trash services, parking, billing charges, and other applicable fees. For each item, record whether it is mandatory, optional, fixed, or based on usage.
Use the property’s written fee sheet and clearly labeled utility estimates to build your budget. A flat allowance cannot tell you what a particular apartment will cost.
If you need parking, confirm the price and availability of the space you would actually use. Ask whether it is included in rent, billed separately, or offered under a temporary promotion. Include that expense in your monthly total, and check any separate parking agreement.
Compare total monthly housing expenses with your expected budget, rather than automatically adding 10% to advertised rent. Keep unknown charges marked “Pending,” label estimates, and leave room for variable bills. The FTC recommends getting additional rental fees confirmed in writing.
How Do You Build a Complete Apartment Budget?
| Budget line | Your amount or confirmation |
|---|---|
| Base rent before promotions | $___ per month |
| Mandatory recurring charges | $___ per month; list each charge |
| Selected extras, including parking if needed | $___ per month |
| Utilities and insurance | $___; label estimates and avoid counting included services twice |
| Payment schedule after credits | Record the amount due in each lease month |
| Upfront cash | List one-time fees, advance rent, and any required security deposit; track refundable deposits separately |
Add monthly expenses to find your ordinary housing budget. For a lease-average comparison, add scheduled rent payments and recurring charges over the full term, then divide by the number of months. Track one-time spending and refundable deposits separately so you can also check move-in cash needs.
AptAmigo can help you organize questions about participating properties. Confirm the final amounts with the leasing office and use our rent-concession guide to distinguish the advertised average from your payment schedule.
How to Afford a More Expensive Apartment?
If you do the math and realize that your favorite neighborhood or luxury apartment would push you over your budget, don’t give up just yet. You might find some sneaky deals that bring the total cost of rent back into your price range. Here are some insider tricks that our own team members use to get great deals for their clients, as well as their own apartments.
Sign Your Lease in the Winter
Most people don’t know how drastic seasonal rent fluctuations can be. Generally speaking, no one wants to move in the height of winter. The holidays grow hectic, heavy snow makes moving furniture more difficult, and the school year is well underway. For these reasons, apartment complexes sometimes struggle to fill vacant units in the winter months. If you don’t mind the inconvenience, signing a lease in the winter could mean that you end up paying $300-$700 a month less than your neighbor for the exact same unit. You could save a whopping $8,400 a year just by signing a lease in December.
Find a Roommate: More Bedrooms = Less Per Person
It might seem obvious, but living with roommates is another easy way to bring down a high price tag. One-bedroom units typically receive the highest demand, and the price tag reflects that economic reality. For example, in Chicago’s South Loop neighborhood, one-bedroom units average $2,000, while two-bedroom units average $3,500. Based on these numbers, a single person living in a one-bedroom unit will pay the full price of $2,000, but two single people living in a two-bedroom unit will each pay about $1,750. That’s a big difference.
Find “Concessions”
One final, sneaky way to bring an expensive apartment back down into your price range is to monitor rent specials (also called “concessions”). Whether you get a lease-up at a new building or a seasonal special, apartment buildings offer concessions to entice renters, and they can work to your advantage. Oftentimes, a building will offer one, two, or even three months of free rent. Occasionally, they might include free parking, $0 move-in fees, or a Visa gift card upwards of $1,000. When you factor these concessions into your entire 12-month lease, you can save hundreds each month.
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Illustrative calculation using the previously reported offer: at $1,690 base rent for 12 months, two waived months plus a $1,500 credit would reduce total base-rent spending to $15,400, averaging approximately $1,283.33 per month, if all credits apply to rent. This historical example is not a current offer. The average excludes other charges and does not establish the payment due in each month.
Next Steps: Find Your Dream Apartment
Now that you know more about how much rent you can afford, how much you should spend on rent, and how to get a great deal, it’s time to find your dream apartment. Reach out to AptAmigo today, and we’ll not only help you find a great deal, but also give you VIP-level service that will make your search stress-free. With our local insight, apartment expertise, and access to the best deals on the market, apartment hunting has never been easier. All you have to do is send over your preferences, and we’ll do the rest! The best part? It’s completely free.
* The original version of this article was first published on October 28, 2020.
Rebecca is a freelance writer over a decade of journalism experience. She graduated with a BA in Communications and a minor in journalism. She currently bartends in downtown Chicago and spends her free time exploring the city and making connections.
