When renting an apartment, a house, or any space, it’s critical to figure out how much rent you should pay to keep your budget in check. One guideline for evaluating what you should pay is the 30% rule.

1. How much of my income should be spent on rent?

Generally, the 30 percent rule states that you should not spend more than 30 percent of your income on rent. You can easily determine your home-buying budget by applying this rule. However, based on your lifestyle and financial situation, you may wish to adjust your budget:

(20%) Budget

Cheaper rent may require you to compromise some needs, such as proximity to the city center or apartment size, especially in more expensive places like Makati, where rent is not cheap.

However, if you don’t mind making a couple of adjustments, you’ll save a lot of money in the long run.

This is also a good idea if you spend more time outside your home than inside it because a lower rent means you’ll have more money to spend on things like dining out or shopping.

(30%) The sweet spot

This will most likely provide you with the healthiest combination of cost and comfort based on your budget and lifestyle.

If you have a monthly income of P35,000 and are looking for a room, a comfortable amount to spend on rent would be P35,000 x 30% = P10,500 per month. This might easily get you a furnished apartment or a studio condominium unit in the Philippines.

(40% ) Above average

Having your own area gives you so much power! And what if it’s a location that you adore? It’s even worse. If you’re a homebody who likes to remain in, it’s tempting to want to rent a nicer house that comes with a larger price tag.

Only do this if you have a higher-than-average income, as you’ll still have enough spending and saving capacity after paying rent.

2. What kind of value do you get from your rental?

Rent budgeting based on income is useful, but it can also be overly simplistic sometimes. Consider how much you’re getting for your money with your rental. Consider the following example:

Is there anything included in your rental?

Assume you rent a room in a condo with comprehensive amenities. Gym with all essential equipment, and with a huge pool available. Everything that is excellent!

You'll no longer need your P2,500-per-month gym membership since you can utilize your condo's facilities; you may use that money to rent instead, giving you a larger budget for house-hunting.

On the other hand, if you’re not using what you’re paying for, it might be better to go with a simpler but less expensive rental.

For example, if you pay a premium because the living room looks like it belongs in a home décor magazine, but you spend most of your time in your own room, you may discover that you are not getting the most out of your rent.

Is your rental suitable for your way of life?

The location is equally vital when looking for a suitable place to stay. Would you prefer a less expensive location that is an hour’s bus trip away from your office or one that is a 5-minute walk away?

That’s a significant amount of time saved on transportation, which adds up over time. Is it worth paying a little more so you can put that extra time to greater use? Perhaps a part-time job or learning a new skill?

The money saved on travel expenses might be enough to warrant the more expensive rental.

3. Is it better to rent a furnished or unfurnished apartment?

Non-furnished rentals are less expensive than furnished rentals when all other factors are equal. A non-furnished apartment could save you money while also allowing you to design your house any way you want if you sign a long-term lease.

If you sign a two-year lease on a non-furnished room that costs P9,000 less per month, you’ll have 24 x P9,000 = P216,000 to furnish your room; anything less is money saved.

Though furnished rentals are usually the best option if you’re only staying for a short time because you won’t have to relocate much furniture when your lease expires.

Knowing how to budget for your rent could save you time and money.

It is not inexpensive to rent an apartment or condo. Evaluating how much you can spend on it without jeopardizing your money (or quality of life) is critical for your mental well-being.

Now that you know how much you can afford to pay for rent, why not start looking for a place on Rent.ph?

All the best to you in your home search!