Plan Your Rent Budget Properly
Rent is the largest item in your monthly spending. Proper budget planning minimizes the surprises you will face when moving into a new home. On this page you will find, step by step, the rent-to-income ratio, how to take your expenses into account, and how to choose a neighborhood that fits your budget.
1. What Is the Rent-to-Income Ratio?
The rent-to-income ratio is found by dividing your monthly rent by your net monthly income. For example, if you pay €600 in rent with a net income of €2,000, your ratio is 30 percent. This ratio is the simplest way to tell whether a home is right for you.
Financial advisors generally consider 30 percent ideal and 35 percent the upper limit. This range allows you to save and to be prepared for emergencies.
Comfortable: 25%
If rent is a quarter of your income, your balance between savings and spending stays healthy.
Ideal: 30%
A balanced ratio for most households; it leaves enough room for other expenses.
Challenging: 35%+
Above this ratio your budget may get tight; you will need extra income or a savings plan.
2. How Do You Calculate Your Expenses?
Start with your net income, then subtract the expenses you pay regularly each month: bills, loan and card installments, food and groceries, transportation and other fixed expenses. The remaining amount is the budget you can allocate to rent and savings.
In the detailed calculation mode, you can enter each expense item separately and see the net budget you can allocate to rent.
- Use the monthly average of your electricity, water, natural gas, internet and phone bills.
- Add ongoing loan and card installments at their full amount.
- Calculate seasonal differences (such as higher heating costs in winter) based on the annual average.
Aim to set aside at least 10 percent of your monthly income for savings; determine your rent budget from the amount that remains after that share.
3. Choosing a Neighborhood That Fits Your Budget
Once you have set your budget, limit your search to neighborhoods that fit that budget. Central areas are expensive, but they save you transportation costs. Districts along a metro line often offer a good balance between price and accessibility.
Search on the map and compare average rental prices. The same budget may get you a larger apartment in some neighborhoods and a newer one in others.
Compare on the Map
See the average rent of different areas side by side on the map.
Consider Transportation Costs
A distant but cheap home can wipe out the savings you expected through transportation costs.
Discover New Neighborhoods
Developing neighborhoods offer both affordable prices and new-build opportunities.