Use the following rent calculator to estimate the rental fee you can afford based on your income and debt level.
Finding a Place to Rent
Depending on where you choose to live, it can be extremely easy, or terribly difficult to find a place to rent.
If you live out away from major urban areas, it can often be quite easy to find a place. You may even see "For Rent" signs on houses around the neighborhood. In that case, all you have to do is write down the telephone number on the sign, and arrange a viewing, or just ring the bell, and take a look.
But in or near some major cities, rental apartments and houses can be quite scarce. This is because the large and dense population has been around for some time, and has had time to occupy them all. Finding a vacant place takes a lot of hard work. You have to scan the Internet sites like Craigslist and the newspapers often. You also have to look at the agency sites or pay an agency to search for you. One a place becomes free, you may have to race to view it, and then, if it's practicable (and you have to be quite flexible), you have to put in an application for it right away. You should have prepared references and credit reports previously, so that you can present the agent or owner with everything he or she might ask for. You'll also want to have all the money ready to pay the deposit and first month's rent in case you do get an offer.
Renting a Place You Can Afford
Given that finding a place is such a struggle in some places, how do you decide where to draw the line and say what you can and cannot afford?
There's no use in being foolish. Taking a place that you cannot afford, just because you want to find something, won't solve your problem. You'll just get into trouble with payments, and get thrown out.
The usual formula for determining rental payment is that it should be no more than one-third of your income. You can go a bit higher than that if you are really in love with a place, but plan on spending vacations at home and not dining out. Some people can make this kind of sacrifice; others shouldn't, as they won't do it and will hit the skids.
It's important to really think about what your real income is, and not figure it in terms of your overall salary and investment income. Leave room for emergencies, extras for your children and yourself, etc.
Remember that this figure needs to cover all housing costs, not just rent. Consider things like utilities, insurance, and other house-related expenses as part of it.