Ultimately, it depends on what you can afford when you account for income and other expenses. Calgary’s rental market can fluctuate, so finding a property that meets your requirements, plus an affordable monthly amount is how you’re going to start your search.
A popular rule of thumb is 30% of your income, AKA 30% of your gross earnings (everything you take home before taxes). So, if you earn $3500 per month, you should be spending around $1,050 per month on rent.
While this might be a solid guideline, it’s definitely not a one-size-fits-all.
Formulating a Rental Budget
Sticking to spending 30% on rent might not be feasible for everyone, especially when it depends on what city and neighbourhood you plan to live in. There are 2 major flaws with the commonly used “30% on rent” rule. First, it doesn’t consider your personal circumstances. For example, you may have student loans, or have real estate goals you hope to obtain within the next few years. You also need to factor in other expenses to cover your basic needs, such as transportation and monthly food costs.
Another flaw about allocating 30% of your income to rent, is that it doesn’t consider inflation, rising rental costs, and income stagnation. Although Calgary is considered one of the more affordable Canadian cities to live in, there is an expectation that cost of living is on the rise.
We also can’t forget about saving. It might be your priority to retire early, or save for a down payment on a house. It’s important to not compromise on your savings in order to pay more on rent. Your future self will thank you when it comes time to retiring, or finally moving into a home you can call your own.
Look For Savings
As you move closer to Calgary’s city centre, the price tag for your potential rental is going to run up. Take a look in the suburbs, and it might help relieve your rental rate. On the flip side, this might impact your transportation costs commuting to and from work everyday. This might not be a worry if you work remotely, but still remember your social engagements.
Keep your eye out for rentals that include utilities, like heat and water. Some rentals also offer incentives, such as first month rent-free, or cable included when signing a 1-year lease. There could also be an on-site gym in the building, saving you upwards of $100-$200 a month on a gym membership. When you’re comparing the costs of rentals, factor in those perks so you can have a better idea of what you can afford and how you can save on some costs.
An option that could help save you time is you could connect with your local Calgary rental & property management company and have them look for a property for you. Let them know your budget, required amenities and included utilities, and they can keep an eye out for your ideal rental property.
At Unison Realty Group Ltd, we take care of you property and conduct thorough screenings to ensure your property has quality tenants. We’ll handle what you don’t want, and you’ll enjoy the benefits.
For any questions or inquiries, please contact us:
Phone: (403) 219-3000
Email: [email protected]