First time renter.... How much % of my take home should I spend??

[BMW_7]

Hi, I am a 22yo trying to move out of my parentals for the first time.

In my preferred area I found a apartment (exercise area included) that I really like. It costs $835 a month, with $60 on top for underground parking. Utilities included but Hydro extra.

So I'll be spending about $900 (or more) the place all said and done. I plan to not have internet or cable for now, which I don't need (I can go on the internet at work).



I make $2200 after taxes / month so far +reimbursement ($200-300 because I use my car for work). I also plan on opening my business on the side and working on one weekend to keep myself busy.



I know $900 is not 1/3 of $2200 but then again I have plans to make more than that. I hope to have enough for emergencies (car repairs, etc) and also to have some spending money. Does this look OK?

[MizTEcK]

look alright, but instead of only focusing on rent when moving out, calculate all your expenses (rent, food, entertainment, clothing, supplies etc) and compare that with your income, perferably with around 20% leftover for emergency/savings

[van]

That depends on the type of lifestyle you live.

1K+ can easily be eaten up in other expenses (other then rent). I suggest you do a total expense assessment (incl. any debt payments) against your net income.

It would also help a lot to have a roommate to help pay the rent.

[Mr Nobody]

I was doing that around your age. Similar rental cost ($900 all inclusive) and income. No reimbursement for car though. I was paying $400 for car financing, $150 for insurance, $150 for gas. Cooked my own weekday meals. Went out all day Sat & Sun. No savings, but it was fun. Great times.

[life_isgood]

You're gonna be losing a lot of money to rent. You'll never see that money again.

Why not rent out your parent's basement, and at least give them money, instead of some rando landlord?

Most likely, your parents may even put away a portion of that money for you, if say, one day you want to purchase a house.

[DeimosBeros]

You're gonna be losing a lot of money to rent. You'll never see that money again.

Why not rent out your parent's basement, and at least give them money, instead of some rando landlord?

Most likely, your parents may even put away a portion of that money for you, if say, one day you want to purchase a house.

Unless it's a basement with a separate, private entrance I wouldn't see the point...

[Alvito]

yeah renting is dumb, if you fail at your first attempt at freedom, you will loathe living with your parents even more.

I suggest you live with them til you can afford to put down some money on a house.

[Mr Nobody]

I disagree. I know we're on RFD but we don't need to ALWAYS be saving money. if OP wants to enjoy some youth experience, I say go ahead. I enjoyed my time burning money away from home with no regrets. :)

[abu_sme]

You can't expect a 22 year old to have enough money for a down payment. I'd say go for it. Beside, who wants to be tied down at 22? I have moved every year for the last 3 years, and have no regrets about it at all. I actually do have enough money for a down payment, but it isn't suitable right now to buy anything because I have no plans on settling down soon.

[GangStarr]

I disagree. I know we're on RFD but we don't need to ALWAYS be saving money. if OP wants to enjoy some youth experience, I say go ahead. I enjoyed my time burning money away from home with no regrets. :)

+1

[MizTEcK]

nothing wrong with renting

[ukgirl]

I would say you could maybe find a cheaper place for your first ever apartment. The parking seems really steep for that apartment.

I would also try and find a place with hydro included. I only moved to Canada last fall and that was what I was advised by all the property managers I dealt with - I'm so happy I listened, now I don't worry about how much heating/water/air con I use - my monthly bills never change.

Good on you for moving out. I was very surprised how many twentysomethings still live with their parents in Toronto. (and don't tell me its the cost, I moved from Los Angeles). You won't regret it.

[life_isgood]

I would say you could maybe find a cheaper place for your first ever apartment. The parking seems really steep for that apartment.

I would also try and find a place with hydro included. I only moved to Canada last fall and that was what I was advised by all the property managers I dealt with - I'm so happy I listened, now I don't worry about how much heating/water/air con I use - my monthly bills never change.

Good on you for moving out. I was very surprised how many twentysomethings still live with their parents in Toronto. (and don't tell me its the cost, I moved from Los Angeles). You won't regret it.

What's nice about living with your rents, at least in most cases, is the security. You're not gonna wake up one day and have your landlord tell you that it's time to go, for whatever reason, most likely cuz he/she wants to sell the property.

Now I know that in life nothing is perfect and you have to adapt to situations like this (find another place; which isn't that difficult) but, you're only 22. You're not THAT old that it's not cool to live with your parents.

And I don't care what some of these RFD'ers are saying about rent not being bad. Let me ask you something. How long do you plan on renting out a place?


You will never see that money again.

It's a lot of money.

Your best bet is to stay at home. Independence is over rated.

Stay at home, go out with your friends, respect your elders and enjoy life.

Owning your own place seems like a good idea, but I think you may be taking your rents place for granted. Who's gonna cook your meals, do your laundry, pay ALL the bills. You could be having so much more fun with your life by living at home.

What are you missing at your parents house that you will have when you rent your own place?

Another thing, if you plan on having room-mates, that's another concern. They may not work out for the best.

Do as you will, but my 2 cents says, stay at home, enjoy mom's cooking and cleaning, and save up as much cash as you can, and don't move out till you're ready to invest in a house.

We all know that this world revolves around money, and purchasing your first home is the smartest investment you can make.

'nuff said.

[SyncMaster04]

You shouldn't be spending more than 28% of your gross income (before tax) for housing. From your number it appears that your gross income is somewhere in the 35K area. So, basically you shouldn't spend more than 830 per month for your housing. 900 is probably a bit on the higher side. Again as a first time renter you have to consider spending quite a bit of money furnishing your new place and associated moving cost. Probably you should try to find a bit cheaper place. Again, as others already mentioned, you need to find out what is your other expenses. Everybody's spending pattern is different. There is nothing wrong in renting.

We all know that this world revolves around money, and purchasing your first home is the smartest investment you can make.

'nuff said.

What a load of crap!!! First of all, your living house is never an investment. Secondly, investing in real estate is one of the worse investment you can ever have. Almost any other investment will give you higher return. Not to forget, this is the worst time to invest in RE. The housing buubble just started popping now.

[BMW_7]

You can't expect a 22 year old to have enough money for a down payment. I'd say go for it. Beside, who wants to be tied down at 22? I have moved every year for the last 3 years, and have no regrets about it at all. I actually do have enough money for a down payment, but it isn't suitable right now to buy anything because I have no plans on settling down soon.


Hi abu_sme.. That is the sentiment I have. I am 22 and really want to get away from parents. My relationship is not good with them, and I always feel like they are pulling me back from doing what I really want (contrary to what life is good seems to assume). I have no school loans, my car is paid off, and I lived with rents all the time while going to school. I think it is a right time for me to go, right now..

I have many friends who rented right by the school campus. Some moved out at 20, some even at 19, while working through school. I noticed they seemed to have the most interesting and social life, and not have to dread the commute home like every other student out there.


I understand my rent is on the high side but then again my expenses will probably be unexistant for the first month. I will be living by myself too.

This is what I am thinking:
-gas for car: 300/month
-food: 300/month
-insurance: 200/month
-misc household products: 100/month?

I will try to reuse some of my existing furniture/dishes when I move..

rent+parking: $900/month + hydro? About the hydro I'm a little worried but then when I realize I will only spend 6 hrs a day there, with maybe a TV and a microwave, it shouldn't be too bad right??? lol

[Ben Jr]

What's nice about living with your rents, at least in most cases, is the security. You're not gonna wake up one day and have your landlord tell you that it's time to go, for whatever reason, most likely cuz he/she wants to sell the property.

Now I know that in life nothing is perfect and you have to adapt to situations like this (find another place; which isn't that difficult) but, you're only 22. You're not THAT old that it's not cool to live with your parents.

Highly unlikely scenario, besides when your renting it's fairly easy to find another place



And I don't care what some of these RFD'ers are saying about rent not being bad. Let me ask you something. How long do you plan on renting out a place?


You will never see that money again.

It's a lot of money.

Your best bet is to stay at home. Independence is over rated.


I'd go as far to say as I consider living out on your own is a great building block in the whole development of life...get out of the shield that is living with your folks.


Stay at home, go out with your friends, respect your elders and enjoy life.

Owning your own place seems like a good idea, but I think you may be taking your rents place for granted. Who's gonna cook your meals, do your laundry, pay ALL the bills. You could be having so much more fun with your life by living at home.

Living at home and respecting elders? geeesh, sounds like sage advice from my 105 yr old gramma
Who says you can't take laundry home on the weekends, go home for the weekends? In fact there are still stories from those days when I go back home.

And no, my parents didn't have many crazy rules, weren't strict, and essentially let me do my own thing. I did infact move back for a short time due to my roommate getting married and suffered no lasting psychological effects.(that I'm aware of)

My advice is to get out there and try it out...the parents are a great security blanket if you find you can't manage things on your own. Sure money seems to be the measuring stick of all that is good, but ya gotta live...

[B0000rt]

You will never see that money again.

It's a lot of money.

Your best bet is to stay at home. Independence is over rated.

Stay at home, go out with your friends, respect your elders and enjoy life.

Owning your own place seems like a good idea, but I think you may be taking your rents place for granted. Who's gonna cook your meals, do your laundry, pay ALL the bills. You could be having so much more fun with your life by living at home.

What are you missing at your parents house that you will have when you rent your own place?

Another thing, if you plan on having room-mates, that's another concern. They may not work out for the best.

Do as you will, but my 2 cents says, stay at home, enjoy mom's cooking and cleaning, and save up as much cash as you can, and don't move out till you're ready to invest in a house.

We all know that this world revolves around money, and purchasing your first home is the smartest investment you can make.

'nuff said.
With what money for a down payment? What if you can't stay home and must move out?

Do you suggest I get one of those 0 down mortgages or Interest only?

[thelefteyeguy]

it's seems a decision has already been made...our opinions dont matter

however assuming free rent from parents

($900x12monthsx3years) compounding at 4% interest for 3 year and not including any raises....sufficient for a downpayment for a reasonable size condo downtown

Renting is just financing so someone else.


by then you are only 24/25 with a deed to a property...and something to fall back on. Renting...you have nothing to fall back on.

[B0000rt]

it's seems a decision has already been made...our opinions dont matter

however assuming free rent from parents

($900x12monthsx3years) compounding at 4% interest for 3 year and not including any raises....sufficient for a downpayment for a reasonable size condo downtown

Renting is just financing so someone else.


by then you are only 24/25 with a deed to a property...and something to fall back on. Renting...you have nothing to fall back on.
So all these people that took mortgages in the United States, what do they have to fall back on now? A house that's worth less than the mortgage they have on it? What then? Paying down a mortgage does not guarantee you will have something to fall back on.

Not to mention all the things associated with buying, especially Condos.
Monthly maintenance fees, and property taxes. The latter of which is sky high here in the states. Can you imagine paying 2-3% property tax on your house?

[thelefteyeguy]

So all these people that took mortgages in the United States, what do they have to fall back on now? A house that's worth less than the mortgage they have on it? What then? Paying down a mortgage does not guarantee you will have something to fall back on.

Not to mention all the things associated with buying, especially Condos.
Monthly maintenance fees, and property taxes. The latter of which is sky high here in the states. Can you imagine paying 2-3% property tax on your house?

assuming you have to *live* and therefore need shelter, and you don't need to liquidate your house/condo in a recession, deed to a property is still the best way because you still have an asset for practically the same cash flow as renting.

Sure the US real estate market is in trouble and so will Canada eventually *but* you probably know the market will turn around eventually. Don't buy a condo over your affordability and you'll be ok.


here's the OPs problem right now practically zero saving from current situation with renting...2-3 years down the line the same situation, no savings and will continue to rent and zero assets to his name.

(btw...you do know that the property tax and maintence is built in the rent...you think the landlord will make a loss?)

[B0000rt]

assuming you have to *live* and therefore need shelter, and you don't need to liquidate your house/condo in a recession, deed to a property is still the best way because you still have an asset for practically the same cash flow as renting.

Sure the US real estate market is in trouble and so will Canada eventually *but* you probably know the market will turn around eventually. Don't buy a condo over your affordability and you'll be ok.


here's the OPs problem right now practically zero saving from current situation with renting...2-3 years down the line the same situation, no savings and will continue to rent and zero assets to his name.

(btw...you do know that the property tax and maintence is built in the rent...you think the landlord will make a loss?)
Don't get me wrong, I agree that in the long run, buying is no doubt the better solution, but all situations are unique and what I'm saying is that buying is not always the smarter thing to do.

Who's to say he won't meet the love of his life living away from his parents? Maybe she'll be stinking rich? ;)

[BMW_7]

I agree with what has been said in this thread, and I know it's important to build assets... I will try to save some in my paycheck regardless.

The most important thing was said, that I do NOT want to be tied down to a property, not yet at least. My plan was to go to Europe and live there in 2 years or so, once I get my career established. Even then, I don't know if I want to spend the rest of my life in Toronto...

I think the people that say saving for a house/condo assume a lot of things... such as people being happy with their life, the city, their job, want to have a family (which I don't), etc etc. That is not always the case.

[thelefteyeguy]

I agree with what has been said in this thread, and I know it's important to build assets... I will try to save some in my paycheck regardless.

The most important thing was said, that I do NOT want to be tied down to a property, not yet at least. My plan was to go to Europe and live there in 2 years or so, once I get my career established. Even then, I don't know if I want to spend the rest of my life in Toronto...

I think the people that say saving for a house/condo assume a lot of things... such as people being happy with their life, the city, their job, want to have a family (which I don't), etc etc. That is not always the case.

well your 5 year plan was not presented ;) it's difficult not to assume

if you are planning to live in Europe for 2 years...why not just cope for another 2 years with your parents and save 20K easily? Europe isnt cheap (unless you plan to back pack for 2 years).



btw...there are lots of ppl that stay in this vicious cycle of wanting to change but have no money in their savings. When 2 years are up, you might discover that you have insignificant financing to do anything and continue to rent. Your options are really limited without financing.

[thelefteyeguy]

btw...hopefully you hit the 45K soon, and money/saving will be a lot easier.

Best of luck to you :cheesygri

[Ben Jr]

assuming you have to *live* and therefore need shelter, and you don't need to liquidate your house/condo in a recession, deed to a property is still the best way because you still have an asset for practically the same cash flow as renting.


Not always necessarily the case. Renting generally gives you virtually all housing expenses inclusive...no need to pay all the taxes, insurance, maintenance costs, and the hundreds of other expenses home ownership provides.


Sure the US real estate market is in trouble and so will Canada eventually *but* you probably know the market will turn around eventually. Don't buy a condo over your affordability and you'll be ok.


I'm being relocated this summer to Florida and looking at arguably the hardest hit area in the US in terms of housing. It makes absolutely no sense for me to buy a home this year with value's of homes dropping 15-25% in each the last few years with '08/'09 promising a further decline. On the homes we're looking at, we are looking at depreciation figures easily in the 6 digits.