What's the maximum amount I should spend on rent?

Question

Is there a general rule or percentage based on gross/net income?

I'm 26 work in as a Software Engineer and do not own a car as my vision does not permit me to drive.

UPDATE: To explain my situation better I live in Huntsville, AL which was just partly destroyed by the recent tornado outbreak in Alabama. Houses for rent in the $1000-$1400 range are going faster than I can apply for them. They are being taken by storm victims who lost their homes. I was told if I want to get a house this summer I need to look at the $1650-$1900 range which is about 35% to 50% of my net monthly income.

Answer 1

The common number is similar to what should be a mortgage payment - about one week's pay should cover the rent. So 25%.

But - if one lives in a city and drops the need for a car, they might choose to pay a bit higher rent as they save quite a bit by walking or taking public transportation to work. There's also a lot to be said for first time renters (i.e. new graduates) to find a suitable multi-bedroomed apartment or house and share the rent.

Answer 2

25% is a good benchmark, but you may need to go higher depending on your needs and desires. For example, since you have vision problems, it may be worthwhile to pay a premium to live near a transit hub, bus or train line.

Answer 3

Rent generally should not be more than 25% of your gross monthly salary. And 3-5% of your gross income should be spent on utilities. Most people spend between 30% and 35% overall on rent and utilities.

If you have a good credit and positive references from previous landlords, you can negotiate a lower price with landlord. Or look for properties with low demand.