Do you know how much space you can afford to rent?

Do you know how much space you can afford to rent?

Searching for a place to rent that not only meets your needs but also your budget is tough, especially in South Africa, where the majority of citizens are mid-to-low income earners living paycheque to paycheque. 

As the years go by, the affordability rates keep dropping, while living costs keep rising. Some may even be paying too much on rent, regardless if they can actually afford to. If you’re searching for a place to rent, you may start wondering how much of your salary you should spend on rent in South Africa. We’re here to help you out.

General rental percentage rule

Many people looking to move out of home or to a flat, ask themselves; “how much should I spend on rent?”.  The general rule is that you shouldn’t exceed 30 percent of your gross salary on rent. Of course, this excludes utilities; you’ll pay for these and other monthly expenses, such as food, with the leftover money. 

So, if you’re in search of a place to rent with a bigger space, you have to consider your affordability first. What you want may not necessarily translate to what you can afford. There are various financial factors to consider before you can decide that you want to rent a two-bedroom flat over a bachelor flat, for instance.

Monthly rent payment

This is an obvious cost that you have to account for in your budget. It’s usually stipulated on the advertisement of the property. This gives you a clear indication of exactly how much rent you have to pay each month. For example, when you search for Johannesburg Housing Company flats to rent, particularly for a two-bedroom flat, you’ll find that the prices range between R6000 plus to R7000 plus. But you’ll find that bachelor units cost less when compared to a two-bedroom flat. So, while you might want the large space that a two-bedroom flat has, you may find that you can only afford a bachelor when you observe your finances. 

Consider tenant related costs

Rent payment is not the only cost you should consider when you’re a tenant. There are other costs too, like repairs and maintenance costs involved. Although they’re not as regular as monthly rent payments are, you cannot overlook them. This is because they sometimes come unexpectedly and you may find yourself in a pickle if you cannot afford a repair mid-month. You may be able to shift your budget around, but it will impact your finances for months to come, especially if your budget is already tight, with little freedom to add new and unexpected expenses.

Analyse your monthly expenses

Draw up a mock budget with rough cost estimates for different flat types. Factor in the above information to learn how they compare against each other. For example, create a budget for a three-bedroom, a separate budget for a two-bedroom and another for a bachelor unit. Doing this will help you analyse what your monthly expenses might look like. You’ll get to see if you can afford to choose a flat with the space you want or if it makes sense to choose a flat with a little less space than you had previously imagined. 

Final thoughts

Whatever your reasons for looking for a bigger living space, they are valid. However, you have to consider how moving into a bigger space is going to impact your finances. If you can afford it, it will be a move you’ll be proud of. But if you cannot afford it, the best option is to put this idea on hold and choose an option that will not wreck you financially. You can always revisit the idea of a bigger space later on when you can truly afford it. 

Fortunately, the units we have at our properties are spacious. So, do yourself a favour and contact us today to discuss options for affordable flats in Johannesburg that you can afford.